RCS - Travelex Issuerco 2 - Q1 2024 Financial Results

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15/05/2024 08:45

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RNS Number : 4353O  Travelex Issuerco 2 Plc  15 May 2024

15 MAY 2024

Travelex Issuerco 2 Plc

("Travelex", the "Group", or "Travelex International Group")

Q1 2024 Financial Results

Revenue growth led by ongoing expansion in growth markets

Travelex International Group - the global travel money services business -
today announces its quarterly results for the three months ended 31 March
2024, reporting revenue growth driven by continued improvement in the core
business and ongoing expansion in the growth regions of Asia and the Middle
East and Turkey (ME&T).

Group Financial Highlights

The Group reported net revenues of £120.7 million (Q1 2023: £117.4 million),
representing growth of 3% year on year. EBITDA declined by 27% to £3.1
million during the quarter (Q1 2023: £4.2 million), predominately due to
macroeconomic conditions and the expected impact of changes to the regulatory
environment in Brazil impacting margins.

Excluding Brazil, the Group's revenues increased by 8% (£7.8m) and EBITDA by
178% (£1.2m) year on year.

The Asia business has reported impressive growth year on year, with revenues
up 57% to £18.4 million (Q1 2023: £11.8 million) and EBITDA up 119% to £5.9
million (Q1 2023: £2.7 million). This is in part due to the continued
recovery of travel in the region, driving growth in the Retail businesses in
Japan, China and the Hong Kong market, but also the strong performance of the
Group's Wholesale business in the Asia region.

The Retail businesses in the ME&T region continues to go from strength to
strength. As a region, it was the second highest contributor to Group revenues
during the quarter, delivering net revenues of £23.4 million, up 12% year on
year (Q1 2023: £20.9 million). EBITDA in the ME&T region was up 27% year
on year to £5.4 million (Q1 2023: £4.3 million).

The Group's global Wholesale business reported a revenue increase of 22% and
EBITDA growth of 10% (Q1 2024: £5.9 million; Q1 2023: £5.4 million). This
was driven predominantly by Asia, following the investment into the cash
processing centre in Hong Kong, and also due to the continued growth in
ME&T.

Net revenues from the UK business were down 6% (Q1 2024: £32.1 million; Q1
2023: £34.3 million), partly as a result of the reduction of regional
airports during 2023 and some lower retail volumes in the first quarter of
2024.

Net revenues were up 4% in Australia and New Zealand (ANZ), to £14.1 million
(Q1 2023: 13.6 million), however EBITDA declined to £1.2 million (Q1 2023:
£2.5 million) as a result of normalisation of rental contracts following
rental benefits in the prior year.

                    Q1 2023   Q1 2024   YOY%
 Net revenue        £117.4m   £120.7m   3%
 Underlying EBITDA  £4.2m     £3.1m     (27%)

 

Operational Highlights

Travelex acquired Number One Brokerage in Brazil in March 2024, a specialist
foreign exchange brokerage and consultancy, expanding and further diversifying
the Group's activities and services for clients in the country.

The Group won a new five-year contract with Singapore's Changi Airport during
the period, which will be effective from July 2024 and see Travelex double its
bureaux, terminal and staff footprint in the major Asian travel hub. New
stores were also opened in Shanghai Pudong Airport and Narita, Tokyo. This
follows a number of other airport successes including a five-year contract
with Munich Airport's non-Schengen Terminal, commencing in October 2025, and
the expansion of Travelex's footprint in Abu Dhabi with the launch of seven
stores and eight ATMs at Zayed International Airport.

Travelex opened 12 new stores in the first quarter of the year, including a
new bureau at Westfield London, Europe's largest shopping centre, further
expanding the off-airport distribution network.

The Group had several successes in digital product developments over Q1 2024:

·      Australian partnerships expansion:

o  Relaunching online foreign exchange cash services for Commonwealth Bank of
Australia (CBA), the country's largest bank serving more than 11 million
retail customers;

o  Extending FX cash click and collect with travel agency Hello World for an
additional five years;

·      Online click and collect service launched in Hong Kong;

·      Launch of Apple Wallet™ compatibility for the Travelex Money
Card (TMC) in the UK, following the introduction of Google Wallet™ last
year;

·      Mobile App launch in New Zealand.

Richard Wazacz, CEO of Travelex, commented:

"While the first quarter of the year is naturally a period of lower revenues
for the Group due to seasonality of travel trends, our performance highlights
the continued growth and opportunity through our diversified business model.

 

"In more mature markets, we have continued to invest in our digital
proposition, in line with our plans to further scale the Travelex Money Card
and App, while maintaining our unrivalled retail and wholesale presence. We
continue to focus on delivering further improvements in operating performance
in key airport locations.

 

"We saw impressive growth in Asia, the Middle East and Turkey, where travel
continues to recover but also where our recent investment and successes are
bearing fruit. The potential for further growth in these markets is evident,
including our recent win with Changi Airport, expansion in Abu Dhabi, and our
Hong Kong cash processing investment already delivering strong results.

 

"Despite specific market challenges in Brazil, the business continues to be
well placed as a leading FX provider in the market. Our recent investment in
the acquisition of Number One further solidifies this position.

 

"Structural tailwinds, such as the continued growth of international passenger
traffic within key travel corridors, underpins the growth opportunity for the
Group. I am confident that this, combined with Travelex's unique brand
positioning, means we are well positioned to continue to deliver profitable
growth."

 

ENDS

For further information, please contact:

 Travelex
 For investor related queries:

 Victoria.Benis-Lonsdale@travelex.com
 (mailto:Victoria.Benis-Lonsdale@travelex.com)

 For media enquiries:

 Press@travelex.com (mailto:Press@travelex.com)

 Powerscourt

 Justin Griffiths, Ben Foster, Gilly Lock

 020 7250 1446 / Travelex@powerscourt-group.com
 (mailto:Travelex@powerscourt-group.com)

 

Notes to Editors

Travelex is a leading global travel money services business that operates
across the entire travel money value chain, providing travel currency and
physical banknotes to customers via a retail, outsourcing and wholesale model
and is the only global player with an omnichannel cash and card offering.

Headquartered in London and employing c.6,000 people worldwide, Travelex has a
unique retail global footprint spanning over 600 stores and 800 ATMs in over
20 countries across six continents.

Travelex is a highly diversified business operating across four key segments:

·      Retail: A unique omnichannel offer comprising cash and prepaid
Travelex Money Card including both airport and off-airport stores together
with online, where customers can top-up via a mobile app, click and collect
and order home delivery. Travelex is present in 80 airports, including 9 of
the top 20, and in other key locations such as department stores and railway
stations, including Selfridges, Westfield in the UK and Australia and London
Paddington.

 

·      Outsourcing: Provision of cash, cards and value-added services
(e.g. banknote delivery, bureau management, ATM services and home delivery) to
long-term partners on multi-year contracts, including banks, supermarkets and
travel agents, expanding the Group's accessible customer base.

 

·      Wholesale: Travelex has the capability to provide end-to-end
wholesale cash services in 80 countries. The Group provides onshore B2B
foreign exchange (FX) services and bulk sourcing and delivering of large-scale
hard currency banknotes to sophisticated global institutions. Its wholesale
business is underpinned by deep logistical expertise and an international
vault and cash processing centre network, including some of the world's
largest.

 

·      Brazil: A fully-licensed FX specialist bank and broker providing
cash, cards and international payments, including mass payments, import and
export, and hedging of FX current accounts for High Net Worth Individuals,
corporates and travellers.

 

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