1 / 28

Forward Looking Statements

Forward Looking Statements.

Download Presentation

Forward Looking Statements

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Forward Looking Statements Certain statements in this presentation constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Any statements that refer to expectations or other characterizations of future events, circumstances or results are forward-looking statements. Such forward-looking statements include projections. Such projections were not prepared in accordance with public guidelines of the American Institute of Certified Public Accountants regarding projections and forecasts, nor have such projections been audited, examined or otherwise reviewed by independent auditors of Wyndham Worldwide Corporation (“WYN”). Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Wyndham Worldwide to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Important assumptions and other important factors that could cause actual results to differ materially from those in the forward looking statements are specified in Wyndham Worldwide’s most recent Form 10-K under “Risk Factors” filed with the Securities and Exchange Commission. Except for ongoing obligations of Wyndham Worldwide to disclose material information under the federal securities laws, Wyndham Worldwide does not undertake any obligation to release any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. The information in this presentation should be read in conjunction with the consolidated financial statements and accompanying notes, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Wyndham Worldwide's Form 10-K for the year ending December 31, 2013 filed with the Securities and Exchange Commission on February 14, 2014.

  2. THE WYNDHAM WORLDWIDE STORYPowerful Cash Flow Drives Dependable Growth Business Execution Sustainable annual free cash flow EPS growth* Successful! Target $750M 17-21%CAGR * 2011-2015

  3. Agenda Three solid platforms Strong execution Delivers dependable growth

  4. WYNDHAM WORLDWIDE TODAYLeading Positions in Leisure Industry BusinessSegment Market PositionWorldwide % of 2013 Adjusted EBITDA MajorBrands Include Hotel Group #1 23% Hotel franchisor by hotels Exchange & Rentals #1 Timeshareexchange and rentalcompany 28% Vacation Ownership #1 49% Timesharedeveloper

  5. WYNDHAM WORLDWIDE TODAYMajority of Income from Fee-for-Service Businesses Revenues Advantages: Strong cash flow ~ 40% ~ 60% Low capital intensity ü ü ü ü Other Fee-for-Service Businesses Recurring revenues Stable earnings • Hotel Franchising Fees • Vacation Exchange Fees • Vacation Rentals Fees • Property Management Fees • WAAM Fee-for-Service

  6. WYNDHAM WORLDWIDE TODAYUniquely Positioned in the Industry High(10%) WYN Other lodging companies • High free cash flow • Diversified revenue streams Cash FlowYield Low(0%) Low High Diversified Revenuesproduct lines & demographics

  7. Three Strong Platforms for Growth HotelGroup Exchange & Rentals Vacation Ownership

  8. HOTEL GROUPBuilding On Leading Global Position Adjusted EBITDA $320M-$330M1 $296M $271M Strengths • World’s largest hotel franchisor • over 645,400 rooms and over 7,480 hotels • Leader of the economy & midscale segment Strategic Priorities • Grow system size • add new rooms • retain every targeted property • Strengthen value proposition • upgrade and improve technology • generate more bookings through our own channels • Drive organizational excellence • consolidate central reservation systems • call center efficiency 1) Based on guidance as of February 7, 2014

  9. EXCHANGE AND RENTALS Extending the Lead Adjusted EBITDA • Rentals Strengths • Exchange Strengths • Leading timeshare exchange network • 3.7 million members • Nearly 4,500 vacation ownership resorts in over 100 countries $375M-$390M(2) $356M $340M(1) • Strategic Priorities • Expand into new geographic markets • grow organically and through targeted M&A • Leverage web technology investments • enhance online experience & reduce costs • Drive revenue and customer retention • develop compelling products and services Largest professionally managed vacation rental business Access to over 103,000 rental properties Approx.1.5 million transactions completed during 2013 1) Adjusted EBITDA decrease primarily due to currency ($17M) 2) Based on guidance as of February 7, 2014

  10. VACATION OWNERSHIPA Transformed Business Adjusted EBITDA $640M - $660M(1) $621M $552M Strengths • World’s largest vacation ownership business • 191 resorts and approximately 907,000 owners • Leading innovator • Property management and consumer finance have fee-for-service components Strategic Priorities • Drive greater sales and marketing efficiencies • Deliver better service to owners to enable greater owner satisfaction • Drive further cash flow improvements • develop Just-in-Time and Fee-for-Service inventory models (WAAM) 1) Based on guidance as of February 7, 2014

  11. VACATION OWNERSHIPA Closer Look Recurring upgrade sales • ~ 70% of sales are to existing owners Flexible points based product • Enables remote market sales Recurring income • Property management fees = $75M EBITDA(1) Recurring interest income • Financing receivables (1) For full year 2013

  12. Agenda Three solid platforms Strong execution Delivers dependable growth

  13. Strong Record of Execution – Key Initiatives 1 Vacation Ownership transformed 2 Leverage web to improve margins of Vacation Exchange Deliveredstrong cash flowand 2013 Adjusted EPS growth of 19% 3 Grow Vacation Rentals business 4 Strengthen Hotel Group value proposition 5 Strong balance sheet and financial position

  14. Vacation Ownership Transformed Major Actions(1) Major Benefits • Margin increased from16% to 24% • Average FICO scores(2)increased to 725 • Inventory spend reduced from nearly $700M to approx. $175M target for 2014 Right-sized the business Tightened consumer lending practices Developed WAAM concept • 1) Since Spin 2) Weighted Average FICO of Portfolio (at origination)

  15. VACATION OWNERSHIP – A CLOSER LOOKVacation Ownership Inventory Model Highly Successful Wyndham Asset Affiliation Model (WAAM) Affiliate with developers Traditional VacationOwnership Model ü ü ü Invest in development of resort properties Advantages • Reduces capital intensity • Increases recurring management fees • Improves returns

  16. Leverage Web to Improve Margins of Vacation Exchange Key Actions Web Penetration • Enhanced search • Improved Exchange value transparency • Improved resortphotography and videos • Better websites for • club affiliates ~300 bps of segment margin improvement

  17. Grow Vacation Rentals Business U.S. Market • $23B of annual revenue in the U.S. • Close to 50/50 split between rent-by-owner and professionally managed markets large • 49% of professional managers control 20 or fewer properties highly fragmented • Just 12% of US adults have stayed in a vacation rental over the past 2 years Market is under-penetrated under-penetrated • Source: PhoCus Wright Annual Report 2013

  18. Strengthen Hotel Group Value Proposition Build value proposition • Revamp Websites • Drive direct channel bookings • Improve conversion - increases of 10% to 60% • Enhance Content • Overhaul information and images of 7,000 properties • Improve search engine results • Improve Rate Integrity • Better manage rates and inventory • Enhance property management system synergies

  19. Strong Balance Sheet and Financial Position Annual sustainable free cash flow target $750 million Well stacked capital deck – no near-term maturities Investment grade ratings from three major rating agencies Cost-efficient commercial paper program

  20. Agenda Three solid platforms Strong execution Delivers dependable growth

  21. Segment Long-term Growth Dynamics Hotel Group Exchange & Rentals Vacation Ownership • Continued RevPAR recovery • Technology upgrades • International expansion • Migration to web for Exchange business • U.S. penetration in rentals • Drive sales and marketing • Improve portfolio performance • WAAM inventory sourcing High-single digit growth Mid-single digit growth Mid-single digit growth Organic EBITDA growth of 6-8%

  22. Our Cash Flow will Enhance Strong, Sustainable Growth 17-21%* Share Repurchase and M&A 6-8% EBITDA ofBase Business Company EPS CAGR * 2011-2015

  23. Disciplined Capital Deployment  Drive Shareholder Value Disciplined CapitalDeployment of ~$1B Annually • 2014 Free Cash Flow Target: $750M • Maintain existing leverage: $100M EBITDA = $300M of debt Dividends Share Repurchase Targeted M&A Investment • $156M in 2013 • ~30% of adj. net income Focus on fee-for-service businesses • $590M in 2013

  24. Clear Evidence Our Business Model is Working Adjusted EBITDA Adjusted EPS $4.18-$4.28(2) $1,215M - $1,240M $3.83 $1,152M +10% $3.23 +7% $1,054M +19% $976M $2.49 +9% +30% +10% $860M +13% $2.00 +25% (1) (1) 1) Based on guidance as of February 7, 2014 2) Excludes share repurchases

  25. WYN Valuation Framework Price/Earnings 2013 Enterprise Value / EBITDA Free Cash Flow Yield As of February 7, 2014

  26. IN SUMMARYPowerful Cash Flow Drives Dependable Growth Solid Platforms Execution Growth Strong record of execution Building on three solid platforms Delivering dependable growth • Transformed Vacation Ownership business model • ~$750M annual sustainable free cash flow target • Extending lead of all platforms • Continuing to optimize operations • Using free cash flow for targeted growth • Targeting 17-21% EPS CAGR* * 2011-2015

  27. Investor contact: Margo C. Happer Senior Vice President, Investor Relations Wyndham Worldwide Corporation (973) 753-6472 margo.happer@wyn.com

More Related