Clear leader in UK Online Rail1

ADVERTISEMENT: This is an advertisement and not a prospectus. Potential investors should read the prospectus relating to the Trainline plc share offer, and you should make your investment
decision based only on the information in the prospectus, which will be available from www.thetrainline.com
Clear leader in UK Online Rail1
Well-placed to continue to capitalise
on a growing market
Rail complexity can be confusing to consumers...
and Trainline solves this complexity
Thurso
1
Helmsdale
Kyle of Lochalsh
Inverness
Aviemore
Fort William
Stirling
• Ticket alert
Dundee
• Best fare finder
Kirkcaldy
Edinburgh
Principal routes and stations
Other main routes and stations
Berwick-uponTweed
Ayr
Stranraer
• User-friendly fares presentation
Aberdeen
Perth
Glasgow
Multi – TOC
journeys
Planning a journey
Elgin
Mallaig
Oban
2
1
Wick
Operated by 22 Train
Operating Companies (TOCs)
Airport interchange
Carlisle
Prestwick
Airport
Newcastle
Durham
Sunderland
Oxenholme
Lake District
Middlesbrough
Barrow
Darlington
Lancaster
Blackpool
Skipton
Scarborough
Preston
Harrogate
Southport
Bradford
York
Manchester
Liverpool
Hull
Manchester
Leeds
Wakefield
Bangor
Chester Airport
Doncaster
Grimsby
Holyhead
Stoke
Cleethorpes
Llandudno Crewe
On-trent
Junction
Lincoln
Sheffield
Retford
Stafford
Newark
Nottingham
Derby
Shrewsbury
Grantham
Aberystwyth
Wolverhampton
Nuneaton Leicester Peterborough Ely Norwich
Birmingham
Great Yarmouth
Birmingham
Bedford Cambridge
Llandrindod
International
Luton
Ipswich
Coventry
Stansted
Airport
Worcester
Fishguard
Banbury Rugby
Airport
Hereford
Cheltenham
Stevenage
Harwich
Pembroke
Milton Keynes
Bristol
Colchester
Dock
Oxford High Watford
Stratford
Parkway Gloucester Didcot
Wycombe
Carmarthen
Newport
Southend
Heathrow
Swansea Cardiff
Swindon Reading
Airport
Bath
Chatham Margate
Basingstoke
Ramsgate
Woking
Barnstaple WestonBristol
super-Mare Temple Westbury Southampton
Canterbury
Gatwick
Ashford
Taunton meads Salisbury Airport
Dover
Airport
Newquay Exeter
Yeovil
Portsmouth
Windermere
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4
A network of 2,535
stations vs. 60 airports
Multitude of route options
for a single journey
Truro
Penzance
Falmouth
Plymouth
Torquay
Paignton
Brighton
Hastings
Poole BourneRyde
mouth
Eastbourne
Weymouth Southampton Shanklin
Central
2
Booking
3
4
Fulfilment
Live travel
information
Seat reservation
Through
services to
Paris and
Brussels
For example: What’s the cheapest fare from London to Birmingham?
16 different
ticket types
train
3 different
companies
Multiple
5
fare options
49 different
fares
£12 vs £164
Cheapest standard class return
Most expensive standard class return
£12
£164
We help rail passengers save money, time and hassle
AND we deliver incremental passengers to TOCs
Investment highlights
Clear leader with an increasing share of a
1 growing market
2 Compelling proposition to consumers,
B2B customers and TOCs
3 Strong core capabilities and scale advantages:
brand, marketing, tech and customer service
4 Track record of strong growth in Consumer
and B2B, profitability and cash conversion
5 Proven and experienced team with a clear
vision for growth
2014
4.7m active customers
£9bn UK rail market
£978m net ticket sales
£21m adjusted EBITDA
103% cash conversion
References in this leaflet to the ‘UK’ or ‘United Kingdom’ do not include Northern Ireland (save for the app ranking data).
2
3
3,4
5
(Consumer and B2B only)
(Consumer and B2B only)
(Group)
1
Our business and what we do
#1 ticket provider in UK online rail market
Train Operating Company
Solutions business
Consumer business
B2B business
• Category leader in online rail travel
• #2 in business rail travel with 41% share
– #1 player with c.38% share of total
consumer online sales, up from
c.34% in 2012
– c. 90 direct corporate accounts
– 90% share of the independents
– Relationships with 7 of the top
10 UK Travel TMCs
• Leader in mobile
– Most downloaded and #1 ranked
travel app in UK
– c. 9,600 SME accounts
• Strong momentum
• 43% share of TOC branded websites
• Wholesale offering to UK TOCs,
including Virgin, Stagecoach and Arriva
• Declining share of contribution relative
to the growth in the Consumer and B2B
businesses (Trainline branded)
– Recent wins and key renewals in 2014
• Licensed to sell rail tickets on
behalf of all TOCs 6
46%
64%
23%
15%
31%
21%
net Group ticket sales
gross profit
net Group ticket sales
gross profit
net Group ticket sales
gross profit
8% conversion 20.8m
7
vs 2% average
for e-commerce
websites8
monthly visits
to website and
mobile apps
7.4m
c.50k
app downloads
to date
app downloads
per week
Providing B2B tools to
help businesses manage
rail travel:
Leveraging our consumer expertise
Travel management
companies (TMCs)
Small and medium-sized enterprises (SMEs)
• Self-booking tool
• Travel policy tools
• Management information
• Pay on account
Corporates
• Account management
• Ticket printers
• Negotiated fares
• Bespoke management information
Travel management companies (TMCs)
• Dedicated rail websites for TMCs’ clients
• Application programme interface
• Agent booking tool
4.5 star ranking
4.5 star ranking
• Integrated with TMCs’ billing systems
#1
ranked travel app in UK 9
2
Key financial highlights in 2014 (yr end February)
Driving adjusted EBITDA growth 4,10
for Trainline branded
Strong momentum in Trainline
branded net ticket sales
(£m)
978
877
790
TTL Consumer
TTL B2B
12.6%
Growth
vs Q3
FY2014
Group5 free cash before
tax and financing
(£m)
(£m)
35.6
22.6%
21
Growth vs
Q3 FY2014
28.0
28.3
FY12
FY13
683
14
582
478
397
9
279
196
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
D 11
YT 15
Q3 F Y
FY12
FY13
FY14
Q3 YTD FY1511
FY14
Strong marketing experience
Strong technology capability
Strong customer service
1 Effective TV campaigns
1 Single, scalable and stable platform
1 Reducing customer hassle
‘Sheep’: September 2008
‘Choo Choo Choo’: April 2011
‘Be Sensible’: August 2012
‘Brilliant for train stuff’: April 2014
– Robust: 99.8% uptime in FY14
– Considerable scale with average 20.8m
visits per month to website and mobile apps
2 Significant development resources
– 105 FTEs in the development team
– Rail industry systems expertise and
leading edge technology
– Organised around customers
3 Customer-driven innovation
– 74% prompted brand awareness
2 Coupled with strong digital marketing
– Online /mobile display and re-targeting
– CRM trigger campaigns
– Social
– SEM/SEO
– Affiliate/partnerships
– Qualitative and quantitative customer testing:
utilising scale and big data
– Leading industry innovation e.g. mobile
experience and e-ticketing
– Proactively managing customer experience
– Making self service easy
– Making payment easy (accept rate c.95%,
low fraud rate)
2 Easy to contact
– Customers can use the channel that suits
them – telephone, chat, e-mail, Twitter,
forum and post
– Channels joined up to provide a smoother
customer experience
3 Delivering effective customer service
– Speed of call answering (88% in 20 seconds)
– Speed of refund process (98% within
24 hours) vs 7-10 days promise for next best
in the industry
Strength in core capabilities results in high customer advocacy and high loyalty with > 80% of sales from repeat customers in 2014 12
Looking forward, we have four clear growth priorities
Strong underlying UK rail growth
UK rail market gross ticket sales £bn
1
Increase awareness
2
Mobile ‘On the Go’ experience
3
E-ticket fulfilment
4
Europe: foreign and cross
border market
10.8
10.2
9.6
9.0
F
FY14
FY15F
FY16F
FY17F
SOURCE: CALLCREDIT REPORT
With increasing online penetration
Gross ticket sales through online channels £bn
3.2
2.7
2.9
FY15F
FY16F
Bar
code
Visual
validation
2.4
FY14
SOURCE: CALLCREDIT REPORT
FY17F
Existing distribution agreements
Distribution agreements in discussion
3
The team behind Trainline
Douglas McCallum
Chairman
Clare Gilmartin
CEO
Jon Mitchell
CFO
• Douglas was appointed chairman of
Trainline in 2013
• Douglas has founded, led, invested in and
contributed as an executive and non-executive
to businesses at the leading-edge
intersections of computer hardware (Intel,
Apple), retail (eBay UK & Europe, Ocado),
media (Capital Radio online, Cablevision TV)
and online banking (PayPal)
• Clare joined Trainline as CEO in 2014
• Most recently she was Vice President of eBay
UK & Greater Europe for 3 years
• Clare worked with eBay for 10 years in total,
holding a variety of senior positions during
her tenure
• Previously Clare spent 3 years within Unilever
before joining the Boston Consulting Group
• Clare is also a non-executive director of
Chime plc
• Jon joined Trainline as Finance Director
in 2004
• Over 18 years’ experience post qualification
as a Chartered Accountant
• Previously held a number of senior financial
positions in both the UK and the US with
the Virgin Group
• Prior to this, Jon worked for WestLB Bank
and homedirectory.com
Key risks
• The Group’s current and future business prospects substantially depend
on its ability to retain its Association of Train Operating Companies
Third-Party Investor Licence (the “ATOC licence”). An inability to do so
could preclude the Group from carrying out its primary operations or
otherwise could have a material adverse effect on the Group’s results
of operations, financial condition and business prospects.
• Each of the Group’s businesses relies on the Group’s IT platforms in
order to generate revenues and if the Group is unable to maintain and /or
upgrade its IT platforms in a timely and effective manner, or if the
Group’s disaster recovery infrastructure is not sufficiently robust to
support natural or man-made systems disruptions, its current and future
business prospects could be materially adversely affected.
• ATOC and RSP could under certain circumstances make a material
variation to the terms of the ATOC licence during its term which could
have a material adverse effect on the Group’s results of operations,
financial condition and business prospects or, in the event of a failure by
the Group to comply with such variation, could result in the suspension
or revocation of the Group’s ATOC licence and thereby preclude the
Group from carrying out its primary operations.
• The Group operates in a competitive environment and is subject to risks
relating to competition that may materially adversely affect its future
performance and business prospects.
• The Group relies on third parties for a number of services which are key
to the Group’s operations, services and systems and the failure of such
third parties to deliver the services could have a material adverse effect
on the Group’s business, results of operations and financial condition.
• If the Group is unable to charge some or all of the booking and other fees
that it charges to the customers of its Consumer business, or if such
fees are subject to reduction or mandated caps, the Group may not be able
to generate profit at current levels or at all, which could have a material
adverse effect on its business, financial condition and results of operations.
• The Group may not be able to maintain or enhance its reputation, brand
image and customer loyalty, which could have a material adverse effect
on the Group’s business, financial condition and results of operations.
Notes
1. References in this leaflet to the ‘UK’ or ‘United Kingdom’ do not include Northern Ireland (save
for the app ranking data) and references to market position are based on value of tickets sold.
2. FY14 – For 12 months ended 8 November 2014. Active customers defined as customers
who transacted at least once in the last twelve months.
3. FY14 – Represents Trainline branded which includes the Consumer and B2B businesses
and excludes the International and TOC solutions businesses.
4. FY14 – EBITDA before exceptional items, excluding contribution from TOC Solutions
and International.
5. FY14 – Trainline Group includes the Consumer and B2B businesses, TOC Solutions
and International businesses.
6. Excluding season tickets and certain temporary fares and limited restricted products.
7. Average website visits and conversion rates for the 12 months ended 8 November 2014
(excluding visits from mobile devices to the mobile website and mobile apps).
8. Average for UK eCommerce websites in 2013 based on Best of the Best Benchmark
(Europe) Report by Adobe Digital Index from May 2014.
9. As at 5 January 2015.
10. Adjusted EBITDA for the Trainline Group was £35.4 million, £34.5 million and £34.4 million
for FY12, FY13 and FY14, respectively and was £28.1 million for the 36 weeks to
8 November 2014. Operating profit for the Trainline Group was £26.1 million,
£22.8 million and £23.9 million for FY12, FY13 and FY14, respectively and was
£18.3 million for the 36 weeks to 8 November 2014.
11. 36 weeks to 8 November 2014.
12. Consumer business.
Prices of shares may go down as well as up and in the worst case you could lose all of your investment. Past performance is not a guide to future performance.
This advertisement is issued by and is the sole responsibility of Trainline Investments Holdings Limited and has been approved solely for the purposes of section 21 of the Financial Services and
Markets Act 2000 by Morgan Stanley & Co. International plc (“Morgan Stanley”), whose registered office is 25 Cabot Square, Canary Wharf, London E14 4QA, and which is authorised by the
Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Morgan Stanley is acting exclusively for Trainline Investments Holdings
Limited (and Trainline plc which is intended to be the holding company of Trainline Investments Holdings Limited) and for no-one else in relation to or in connection with the offer of the shares
in Trainline plc and will not be responsible to anyone other than Trainline plc for providing protections afforded to clients of Morgan Stanley and are not providing, and will not provide, advice in
relation to the offer or any matter referred to in this advertisement. This advertisement does not constitute an offer or recommendation concerning the shares referred to in this advertisement.
This advertisement is dated 8 January 2015 and is not for distribution or publication in any jurisdiction outside the UK, the Channel Islands or the Isle of Man.
Any prospective investor is recommended to consult an independent financial adviser.
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