Web Travel Group Limited (WEB) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Webjet Limited FY '24 Results and Investor Briefing. [Operator Instructions] There will be a presentation followed by a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Mr. John Guscic, Managing Director. Please go ahead.

Thank you, Ashley. Stop me now. I'm having such a good time. I'm having a ball. Good morning. Welcome to the Webjet Limited FY '24 results. Joining me today is our CFO, Tony Ristevski. Let's get stuck into it. So, as we see on Slide 3, key metrics are all at record levels, materially ahead of FY '23, and obviously, ahead of pre-pandemic numbers. Bookings are up to -- up 21% to 8.7 million. TTV is up 29% on last year to $5.6 billion. Revenue up 29% to $471.5 million and most importantly, EBITDA up 40% to $188.1 million. Let's go through the key divisions and look at the highlights. The most important thing that these results encapsulate are the revised strategies of the business over the last 3 years and we're seeing a significant outperformance against the market for all of our business units and let's go through them individually. WebBeds, the B2B wholesaling business is up 39% on FY '23, 27% on a functional currency basis with a result of $162.4 million, Obviously, all key metrics are up significantly ahead of FY '23, and we achieved $4 billion in TTV. We are on the road to getting to $10 billion by FY '30, and we'll talk a little bit about that in the results themselves. The Webjet OTA business, up 25%. EBITDA margins at record levels. We already have the best-in-class EBITDA margins in the world and we have increased those EBITDA margins during the course of FY '24. Strong growth on all key metrics. And as we have signaled over the last 2 reporting periods, our focus has been on growing our share in the international market, which we have done. GoSee was circa flat, up 6% on -- and delivered $1.7 million. And our total cash is up $116 million as of March '23. Obviously, a very strong cash position. We generated significant cash from operations, and Tony will cover that off when he gets to his stage. Let's get into WebBeds. So, bookings up 26% to $7 million. TTV, bang on, $4 billion, up 42%. Revenue, up 39% to $327.9 million with EBITDA, up 39% as well to $162.4 million. So, the key drivers of the result that we just looked at; the accelerated growth and recovery in the APAC region and the continued strong growth in North America were the key driver of the bookings. TTV, up on last year was combination of both the volumes increasing, average booking value increasing and some favorable FX tailwinds. Revenue was in line with TTV and EBITDA was in line with our business. We'll talk a little bit about the run rate when we get to the outlook slide, but it would be suffice to say we are accelerating as we go into FY '25, and we'll talk about that in the outlook slide. Moving on to Slide 7. As we've covered, bookings are up 26%, average booking value was up 13%. That is a combination of rate and exchange rate. Rate being price that we sell our hotel rooms. TTV, up 42%, revenue, up 39%, expenses, up 38%. EBITDA, up 39%. Revenue margin, very strong at 8.2%. And EBITDA margin, in line with our expectation of being around 50% going forward. The key call out compared to the first half results, that business transformation is continuing to -- and the investments that we've made that show a strong growth in expenses in the first half have ameliorated to some extent in the second half. The second half expenses do have ROOMDEX included in those numbers. The things that we're particularly proud of in the WebBeds business is with regard to the transformation of the business that we want to be substantially more effective across our employee base, which we now are. We are 73% more efficient than on an FTE basis compared to pre-COVID. We expect that to continue to improve in FY '25. TTV margins, modestly down in relation to the expected change in business mix. Over time, we expect that to settle in the mid-7s as we highlighted during the Investor Day update in March. Overall, EBITDA, up 39%. We will continue to focus on absolute EBITDA growth and we'll talk a little bit about the composition of how that is expected to be derived shortly, but EBITDA margins remain in line with our expectations of being circa 50%. So, let's go to Slide 8. It's, again, very similar to the slide you would have seen at the Investor Day. You're seeing a strong growth in APAC, in particular, China, India and South Korea have been the 3 fastest-growing and most substantive markets that have contributed to the APAC results. America, we continue through new client wins and other market share gains coming through to drive that result. Europe has been very strong with new client wins in our largest TTV market. And the Middle East, as we have signaled for a couple of years now, remains materially lower in light of our trading policies. And we talked a little bit about significant opportunity for point of sale, and we'll -- we're already starting to see the benefits of that in our FY '25 run rate. So, I'll cover that off the outlook slide. As we've suggested, we've got a globally diversified portfolio in our business. And we expect over time that, that will circa be 3 equal TTV share regions across the top 3 with a smaller Middle East business. Moving on to Slide 9. There have been lots of other public companies, particularly in America that have reported their results over the course of the last few months. And they're seeing a sort of slowing of the travel market. It's still growing at a healthy rate, but it's not growing at the same rate that it was in the first half of calendar '24. So, as we look at our 30% growth rate at a TTV level and its composition and we put that into our actions that we've undertaken to drive those outcomes, we see the market growing at circa 7% over the course of financial year '24. So, that's part of our 30%. As we have spoken at some length during the Investor Day, the new customer supply markets where we get additional supply into our inventory mix, we get additional customers and we penetrate new markets. That contributed circa 13% of our growth in FY '24. And on the conversion side, where we're selling more to our existing players on the back of activities that we undertake in ensuring relevance and getting the right inventory at the right price at the right time to our people, then we're starting to see an increase in that conversion number and that's now up to 10% for FY '24. These 3 pillars of growth will be the key drivers for our continued outperformance. They will also be the key drivers for our aspiration, not aspiration, our realistic goal of getting to $10 billion by FY '30. So, we're on our way. And as you can see, we delivered $4 billion. Our target that we disclosed at the result today was $5 billion for FY '25. We are currently ahead of the run rate to achieve that FY '25 number and our longer-term goal is to get to $10 billion by FY '30. Let's move to the Webjet business and again, strong growth over FY '23. Bookings are up 5% to 1.3 million. TTV, up 6% at $1.4 billion. Revenue is up 12% at $121.2 million and EBITDA, up 25% to $54.2 million. The most significant element of our growth in bookings has been in the international airfare arena. Average booking values are up notwithstanding the softening of prices in the last 6 months of our financial year. And we'll talk a little bit about that for the implications for FY '25 again when we get to the outlook slide. The business has pivoted substantially throughout the last 2 to 3 years to focus on maximizing the margin available to us in light of the lower international commissions that we used to receive. The net result of that is that we have increased our revenue ahead of TTV, which is a fabulous outcome and it's the key driver of our outperformance at an EBITDA level. So, delighted with the performance of the Webjet business and it continues to be the market leader in Australia. If we move on to Slide 13. Obviously, we're seeing strong improvement across all our metrics. Bookings, up 5%. Average booking value, circa flat. TTV, up 6%. Revenues, up 12%. Expenses, only up 4%. EBITDA, up 25%. Revenue to TTV margin, up a whopping 50 basis points. EBITDA margins, up on last year by 440 basis points to 44.7% for the full year. We have the highest airline denominated OTA EBITDA margins in the world. It's -- the team has done an incredible job on ensuring that we deliver an increased EBITDA at a higher EBITDA margin, which is a strength of the brand and our ability to continue to pivot to markets, which there are opportunities for us to increase our revenue and increase our bookings. So, strong improvement across all metrics and has been the key driver of what's been a stellar result to the Webjet OTA business. Moving on to Slide 14. Per our comparison basis, we see that we've increased our market share across the board, in particular, in international bookings. We are now 33% higher than pre-pandemic on international bookings, which is a great result. We've spoken again previously about the acquisition of Trip Ninja. It was an important component in helping us drive improved multi-city results and being able to book a multi-city itinerary. The Trip Ninja element delivered circa $4 million of the EBITDA result that we're talking about. So, it was a key driver in our outperformance by circa 25% against last year. We're the leading OTA travel agency as represented by the awards that we've won but most importantly, by the market share gains that we've made. It's important to note after a very difficult pandemic period where customer service issues were front and center of our mind in ensuring that we did the right things by our customers that in light of a more normal environment that our service improvements have increased both Net Promoter Scores and Customer Engagement Scores driving significantly higher customer satisfaction, which we're very proud of. Moving on to GoSee, it's a mixed business. The cars business continues to do well. The demand for Motorhomes still is impacted. There's been ample coverage about the issues in the Motorhomes business of lack of supply and lack of inbound tourism beyond friends and family coming to New Zealand therefore, restricting our opportunity, which is one of the reasons that we haven't seen the GoSee business rebound substantially as our other 2 businesses. Overall, the business delivered a solid result with an EBITDA of $1.7 million. Tony, tell us about this fabulous set of numbers in a little bit more detail.

Thank you, John. I'll turn your attention to Slide 18 first. The financial summary. I'll start off with the statutory result because I'll talk about it in the context of the second half. And there's quite a few items there that are driven from an accounting non-cash perspective. I'll start off with the first one being the non-operating gains and expenses. We've had a gain there of circa $10 million as it relates to the mark-to-market to the financial instrument where we have exposure to ourselves through the derivative there of circa 4.9 million shares. The share price has appreciated $2 per share since the last time we measured that at the half year, resulting in a gain of $10 million, which is non-cash and it's inside the statutory result and not included in the underlying result. Moving down the page to acquired amortization, taking off on what John mentioned around the GoSee business and what we've seen in the broader market space, particularly around some of our listed peers of operating in the Motorhome space, this calendar year, we have seen a subdued recovery around the Motorhome space, and it's been delayed as a consequence of supply challenges along with inbound visitation. So, what we've done at the full year is impaired the goodwill as it relates to GoSee on the back of that and being quite prudent as we think about the outlook going forward. Moving down the page to convertible note interest. What you would expect to see there is a notional interest expense like last year of $12.2 million or thereabout. Instead, we've got a gain of $12.3 million. There is a technical background there. When we first entered into the Note 3 years ago, we have to bifurcate the instrument between debt and equity. Effectively, it was a 15%, 85% split. And over time, what we end up doing is circa a notional interest expense through the P&L around $12 million on the presumption that the bond will last 3 years as opposed to the 5-year term. Given that the 3-year put option was not exercised prior to year-end, we're required under the accounting standards to remeasure the instrument as if it was always bifurcated over 5 years. And that meant we had a true-up in this financial year in the order of around $25 million. So, what do we mean going forward in years 4 and 5, we would have approximately $12 million of notional interest expense next year and the following year as we get to the 5-year term. Then that concludes the statutory results and the key items, but the focus really is on underlying operations because that is a better proxy of the generation of cash for the business and how we choose to look at it. John has gone through the underlying earnings components. When I look below that item into D&A, we closed the year off almost $30 million there and we start to see that increase over time, particularly with the improved increased CapEx spend in B2B. And we see that from an outlook perspective, going to $35 million next year and then growing by CPI thereafter. Moving down the page to net interest and finance costs, the $10.2 million this year. We see that reducing by half going forward, which is driven by 2 key elements. Those elements being, we entered into some interest rate swaps a few years ago that were quite favorable for us in the first part of the term. But in the later part of that 3-year swap was unfavorable, resulting in more of a cash out. That ended in April with the 3-year put. So going forward, that won't be an onus on us. And secondly, as we generate more cash in the business that will generate more income, thereby reducing the overall interest expense and see that being circa 50% of where it is today in the near term. Then lastly, looking at the tax line at the half year of late, that would be around the high-teens to mid-teens. As you can see there for the last 2 years, it was just circa 13.5%. We see that going forward it being 16% for the near term. An increase there of circa 2.5% is driven off primarily 2 factors. One being the introduction of corporate tax in the UAE, which is where WebBeds is headquartered. And that tax applies from FY '25 onwards, which go from 0% to 9%. And equally proportionately, the earnings we see coming out of the WebBeds group as proportion to the broader Webjet group, are the key drivers there. So, there we will have a material impact going forward as it relates to the growth in the underlying earnings per share, which did grow 82% from last year's $0.183 to this year's $0.333. So, a bit there to cover, but I'll move on to the next page, which is cash position on Slide 19. This waterfall chart now has changed over time in its composition in a more favorable way. When I reflect back on FY '22 presenting this chart, you would see back then, we had a positive cash contribution from working capital of $103 million and had a loss from operations of $55 million, as the business has recovered and exponentially growing to TTV. Last year, we saw working capital contribution reduced to $56 million and the earnings contribution contributed $82 million. This year, you can see there's been nominal contribution out of working capital. But the more positive is that it's been -- contribution of cash has come from the earnings of $131 million. And we'll start to see that grow going forward as the earnings grow across the broader group. Equally, we took the opportunity being prudent to upsize our revolver just in case we couldn't control equity markets and we couldn't foreshadow what the bondholders will do with their [ free ] put. So, we upsized it from $50 million to $100 million and that's been resized back down to $50 million subsequent to year-end. All-in-all, our cash position is a healthy $630 million, consistent with where we were in the first half. Moving forward to the next slide, looking at corporate costs and non-operating items. I'll start off there first with the technology investments in the second half. That loss of $1 million is in line with what we guided 6 months ago as it relates to Trip Ninja. With Trip Ninja continuing to improve and the losses diminish where we expect that business to break even in the last quarter of the new financial year, which is quite positive for the team. Looking at corporate costs, we were guiding 6 months ago to about $26 million, that was over. We've spent $27 million, a bit more spend there as it relates to third-party advisory costs to complete the year at $27 million. We do see that growing by CPI going forward. I've already covered off early as it relates to the mark-to-market instruments. I won't go through that one-off item. Turning attention to the balance sheet on Slide 21. I'll call out areas. Our receivables continue to be managed in line with our credit policy, that's improved materially from the pre-COVID days where debtor days are now in our sort of circa in the late-20s versus the mid- to high-30s. We've had the mark-to-market as it relates to the financial instruments as it relates to exposure to Webjet stock appreciating in value. In trade payables and -- payables should I say, we're obviously starting to see now as supply mix changes and then we see the pre-COVID TTV numbers for the group for WebBeds specifically, that the supply mix will start to see a contraction around creditor days and we started to see that in the FY '24 period and we'll continue to see that in the FY '25 period. And I'll talk about it a bit more as it relates to that an impact around cash on the next slide. In the borrowing section, at the half year, the convertible note, as it was with the 12-month period of the put risk was convertible -- sorry, first applied as current, should I say. At year-end, considering the put was not exercised, it moves back to non-current. So, positive there is at a net debt cash level, we're sitting on positive cash of $406 million, up on last year's $233 million. At the current ratio, we're greater than 1.6, up from where we were last at 1.4. But more pleasingly is the return on invested capital, where that's grown from the half year at 22% to now 24%. And that's a function really of the inorganic investments we've done pre-COVID particularly in the WebBeds business and then the organic growth that is subsequently delivered and we'll start to see that ratio continue to grow as per the numbers John has outlined for the WebBeds business going forward. Going to the next slide, cash flow. Continuing from the thread on the earlier slide as it relates to our thinking around cash and the impact around creditors going forward, what we saw in the FY '24 period was 2 things. One was a bit of a benefit as it relates to the Easter long weekend. We had some payments go out didn't get processed in time as a result of the public holidays. They ended up getting processed after Easter. So, we had a bit of an AP for a kick. If we were to adjust the FY '24 numbers, cash conversion would have been closer to 99% as opposed to 107%. But what we'll see there is, obviously, in FY '25, cash conversion dropping down to about 80%, and we'll start to see that normalize around 100% from FY '26 going forward. There is no dividend declared for the full year and obviously, in light of the announcement today around the separation, that's been paused along with the bond and I'll let John talk to that later in the slide deck. But the other key points as it relates to thinking around cash and cash in the next sort of year or 2. And lastly, on CapEx. As John talked about the strategy around the WebBeds business, particularly point-of-sale back in March, we did accelerate from the half year, the investments in that development that resulted in a bit more CapEx spend this year than otherwise was contemplated 6 months ago. We do see CapEx normalize going forward at a rate of CPI across the group. And I'll leave it at that and hand it back to John.

Thanks, Tony. Webjet is burning through the sky, yes, to 100 degrees. That's why they call us Mr. Fahrenheit. We're traveling at the speed of light. We want to make a supersonic investor out of you. We're on track to deliver significant growth in FY '25. We break it down to our 2 business units. WebBeds has accelerated out of FY '24, and our bookings in TTV are both up circa 35%. Put that into context, as you've just seen, FY '24, our bookings were up 26% and our TTV was up 30% on a constant currency basis. Now, our TTV, on a much bigger base is up 35% and the natural implication is that EBITDA is significantly ahead of the same period last year. The key drivers for the increase in booking in TTV in FY '25 for the first 7 weeks, continuation of the growth in APAC Americas, strong growth in Europe and a significant rebound in our Middle East business for 2 reasons. One is deeper conversion for existing customers and early days in the release on the soft launch of our point-of-sale system, but we're seeing a natural improvement in the conversion of our existing customers and there clearly will be more to come on the point-of-sale as that gets rolled out and additional functionality improves over the course of the next 3 to 4 months. Looking forward into the European Northern Hemisphere summer or the Northern Hemisphere summer, strong bookings a couple of months out, which augurs well for the first half. So, delighted in our performance at WebBeds to start the year off. On the Webjet side, not surprisingly, bookings are flat and TTV is down 5% in a market where average booking values have declined somewhere north of 10% over the course of the year. TTV being down only 5% shows that we have outperformed in the first 7 weeks on international, so, we are up on international compared to last year. We're down modestly on domestic compared to last year. The shift to international has contributed to our business at an EBITDA level performing ahead of last year notwithstanding that bookings are flat. The other way to think about it is, April, we were down a little bit, in May, we've been up a little bit, which gets us to flat result. So again, a very solid result from Webjet and a very strong result from WebBeds. As is customary at this juncture, I want to thank all of the employees within our organization for their substantial efforts in delivering these world-class results and we're very -- we're obviously delighted in being able to present them, but we're very proud of the contribution that each of them have made and all the stakeholders within our respective businesses from the Board through to our partners, on supply, our customers and the support of our investors over the last 24 months -- last 12 months has been appreciated. So, that is normally where I would wrap up the presentation and ask for Q&A, but we do have 1 additional slide, which is significant in the sense that we are exploring the separation of WebBeds and the Webjet B2C businesses. Webjet B2C would include our OTA business; GoSee and Trip Ninja via a demerger. So, if we -- if it's completed, the demerger will create 2 stand-alone ASX-listed companies. Obviously, both will have leadership positions in their respective industries, their own distinct operating profile strategy and growth opportunities. The decision to explore the separation reflects the attractive but divergent growth opportunities available to the respective businesses and the independent capital structures will allow both divisions to make optimal investment decisions on their own. If this is to be completed, it would happen at some point during FY '25. And clearly, any decision to demerge is subject to regulatory approvals, shareholder approvals, final Board approvals and various third-party approvals. So with that Ashley, we finished the formal component of the presentation and happy to take questions.

Thank you. [Operator Instructions] Your first question comes from Lisa Deng with Goldman Sachs.

A question on the WebBeds business from a -- the first 7 weeks, it looks very strong. Can you give us a little bit of color in terms of the key regions that's driving that outperformance? And we also noted a sentence on the presentation saying that the revenue growth is going to outstrip EBITDA. Is that still just talking about that 50% margin? Or is there an opportunity to go above that?

Well, I'll start. Thanks for the question. I'll start with the second element. EBITDA margins are expected to be 50%. Nothing has changed since we made that statement at the Investor Day. And we expect, as we sort of said previously that the revenue to TTV margin will decline during the course of this year. That's clearly a result of mix. And as we're selling and moving into new geographies and looking at other opportunities, we're certainly not going to die on the altar of high margins, we've got broad and well-stated and well-documented ambition to get to $10 billion by FY '30. And to do that, we need to pursue greater opportunities than what we're currently looking at. So, there is some mix that will drive that number closer to [ 7.5% ] revenue to TTV. And as for the regions, it's predominantly -- all business units, obviously are up when you're up as significantly as 35%. The key element is the delta between sort of the underlying 26% booking growth and the circa 35%. So, the 9% improvement is a continuation of the story that we told at the Investor Day that conversions are improving across the board. And so I'm not going to call out regions of where that's happening, but conversions are improving across the board. And the Middle East has gone from going backwards in FY '24 to growing in FY '24, and that's predicated on a couple of things I spoke about, but the most important is the point-of-sale system being soft launched in that market over the course of the last 2 months. So that's contributed to the growth for FY '25 for the first 7 weeks.

. And a follow-up on the OTA business. Clearly, we're still gaining share. But if I compare the FY '24 share versus the first half '24, it seems like within that last 6 months, they've kind of gone backwards a little bit in terms of share. Can we talk a little bit why that is?

Yes. We've -- in a choppy market, which is the Australian retail market where well documented cost of living pressures, the sky high airfares of FY '23 have dissipated during the course of the year. Our focus in a flattish market wasn't to go after share. It was to maximize our EBITDA result and that's what we did. So, we focused on pursuit of profit ahead of pursuit of growth and that's the key driver.

Your next question comes from John O'Shea with Ord Minnett.

John, Tony, can you hear me okay?

Perfectly well, John.

Thank you. Excellent result. Well done, guys. Look, a couple for me. Firstly, sort of following on, on the OTA side. I hear your comments here about focusing on profitable growth. Obviously, '24, EBITDA was up 25%. Obviously, the start to the year on the booking side has been pretty modest. Can you give us a sort of broad expectation around how we should think about that as we look into this year? I mean, obviously, should we be expecting that level of growth again or lower than that? Or just a general sort of sense on how we should think about the EBITDA side? The growth that's been driving that.

For the EBITDA side, we expect to grow EBITDA for the OTA business. It will be a continuation of the strategy for FY '24. There will be -- as we have demonstrated and we have demonstrated again in the first 7 weeks of the year, we can focus on closing sales that have higher margin and that's been the primary goal. So, we will continue to do that. Bookings growth, we would expect to be modest. I think average booking value will continue to decline into the year. I think it's inevitable that, that will happen. We're already seeing that if we have the same mix as we had in the first 7 weeks of financial year '24, our TTV number will be down circa 15%. So, you're seeing us focus into higher TTV opportunities per booking as we continue to look at international as the growth driver and our revenue to TTV margins are higher in international. So that will be our focus. I think modest booking growth. TTV will be down as a consequence of airfares being significantly down on last year, and EBITDA will be up on last year -- than last year. That's our expectation.

Look, secondly for me, just sort of carrying on from the comments you've made about the B2B business in terms of that EBITDA margin as a percentage of TTV moving lower. So this year, the number was 4.1% on my rough numbers. So as you've articulated before, sort of, should we be thinking that number move sort of, down into that sort of 3.5% range or somewhere around there or somewhere in between that? Or am I thinking about it the right way? Or how should we think about that?

This is the EBITDA margin?

EBITDA to TTV in the B2B business.

Yes, John, we've moved away from that measure. It's probably a legacy of the past, the way you've described it, 3.5%, we're 5% versus percentage of TTV. To us, the real focus is around absolute EBITDA growth to John's point and the margins there will be sort of circa 50% of revenue is the way to think about it.

What I'm saying to you is, this year, you've done 4.1% say. But as you move away from that, that number moves down, as you said before, John.

Yes, absolutely. Absolutely. We're sort of -- well, we haven't, we've been explicit in stating that we expect revenue to TTV margins to be in the mid-7s. So and a 50% EBITDA margin roughly, you're looking at high-3s, not low -- not 4.1%.

No. That's right. That makes sense. I just want to clear that one up. Now, just finally, just Tony, I was a bit unsure what you're saying about the effective tax rate. Can you just articulate that and I'll let someone else over go, but just very quickly what you were trying to say there. I just missed that bit.

Just at a very -- at an underlying level going forward as you think about outlook for the coming years, 16% is an appropriate rate to use in that underlying column when you look at the financials, Slide 18.

Our next question comes from Samuel Seow with Citi.

Just a quick question on average booking values. I saw they were up 13% there B2B. I'm just wondering if you could split the international versus domestic bookings like we did in OTA? And maybe how we should think about the magnitude of the tailwind if length of stay continues to increase the international kind of travel recovery in FY '25?

Yes. That's always a -- we're a little bit counterintuitive on the average booking values. So, let's cover off this year's average booking value. There's only a nominal increase in average booking value. The tailwind is the exchange rate that's been the key driver of that 13%. And if you come to -- and that becomes really clear in the first 7 weeks of this financial year because average booking value or TTV is the same growth rate as bookings, which would suggest average booking value is flat. Now in reality, what we're seeing is marginal increases of average booking value, I'm talking low single-digit, 2%, 3% across the board. But we're seeing a shift in mix, which is contributing to a different output. Now, if we were just growing our European business at 10%, our Asian Pacific business at 10%, Americas at 10%, the Middle East, at 10%, then you'd see probably in this financial year, FY '24, you'd see a 5%, 7% sort of number, improving the average booking value. But because our mix is and our growth rates across regions are very, very different, you're seeing that almost replicate the underlying booking activity. So, length of stay is changing for some geographies. But as we're going and continuing to focus on newer markets, different conversion hypothesis behind our businesses, it's not immediately apparent to be able to call out those numbers because in aggregate, we're seeing what we're seeing, which is average booking values are flat, TTV growing at the same level of bookings, as you'd expect, with average booking values are flat. But if you strip out a like-for-like comparison, for example, we will see that in Europe, our length of stay has increased. But because we're growing faster in America and we're growing a lot more domestic bookings in America and we're growing at a lower revenue to TTV margin in America, for example, then you're not going to see that flow through our numbers. So in aggregate, the numbers are the numbers, which are pretty easy to understand. Bookings are growing at the same rate of TTV, but the component parts have been roughly, as I've just described, varied across the growth. Tony, do you want to add to that?

Sam, just to qualify it at a constant currency level, our length of stay is nominal change year-on-year. The ADR rates have only gone up less than CPI. So, the real growth in TTV is really room nights, which is a function of bookings effective. So, it's only correlated there. So, we've had no tailwinds on ADR, as you might have seen in the broader marketplace and stays are pretty much constant. So that's the way to think about the break-up around ABV.

Maybe just another way to ask that bit like, you've obviously had the massive shift to U.S. and domestic, which would drive on booking values. But with hotel prices consolidating at kind of materially higher levels, do you think you can get ABV back to anywhere near FY '19 levels despite the mix change? Or do you think they'll settle on a normalized level, somewhere below those FY '19 levels?

Look, FY '19, just I'll explain why we network. I'll start by saying it's not something that we're actually targeting and it's not something that we think about on a daily basis. FY '19 was influenced by the following. We had a significantly higher SKU of Middle East business and our Middle East business, for just the peculiarities of our penetration in that market was highly skewed to 5-star properties, so -- and extremely long length of stay. We -- when we get to the summer periods in FY '19, we had many bookings that were stays of 2, 3 weeks at a 5-star resort somewhere in the world. So, it was heavily skewed to the Middle East. The Middle East has gone from circa north of 25% of our -- more than 20% of our TTV to circa 10%. So, it's never going to go back to that level. And the rest of our business has grown so substantially faster over the course of the last 3 years that even when the Middle East does recover as it is in the current set of results, it's not going to drive an outcome that is different to what we're currently seeing. And over time, we think what will happen is the higher growth of ABV will be offset by some of the new markets that we'll enter into, where the average booking value is substantially lower. And that will -- you'll see that continue over the next 2 to 3 years as we move into Latin America, as we move into Eastern Europe, as we penetrate markets that so far, we have only a nominal presence in.

And then lastly, maybe just a quick comment on the Olympics. Therefore, in your first half '25. I mean on the continent, it's your largest exposure and generates the highest margin in your business. Just any thoughts on the materiality there to your...

It won't -- look, early bookings and our booking window obviously extends out for the next 18 months. Our booking window for July, June-July, June -- at this time of the year, June, we've normally got circa 60% to 65% of booking is already on the books. July, we've got circa 45% to 50%. We're not seeing any change in demand patterns as a consequence of not only the Olympics, but the European Championships for football are also on at the same time. So, we're not seeing any change in demand patterns over that June-July period in Europe.