digital commerce for travel retail capital markets half
TRANSCRIPT
Capital Markets Half-Day, London Stock Exchange, 12 June 2018Digital Commerce for Travel Retail
ISE: DLE
Today’s AgendaI. Introduction - David Kennedy, CFO
II. The Market Opportunity -Ornagh Hoban, CMO
III. The Digital Commerce Platform - Abram Richman, Chief Architect
IV. Platform Architecture - Blair Koch, CTO
V. Digital Commerce Innovation - Alan Dunne, CIO
VI. Closing Remarks - Aidan Brogan, CEO
FORWARD LOOKING STATEMENTSSome statements in this presentation are forward looking. They represent expectations for Datalex’s business and involve risks and uncertainties. Datalex has based these forward-looking statements on current expectations and projections about future events. Datalex believes that expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve known and unknown risks, uncertainties and other factors, which are in some cases beyond Datalex’s control, actual results or performance may differ materially from those expressed or implied by such forward-looking statements.
Digital Commerce for Travel Retail
Complete the order
Omni channel
Brand loyalty
Unlock revenue
Control the offer
Enabling a Digital Marketplace
>$20bnRevenues transacted by global airlines through our platform
Product Investment & Innovation
$50m+Invested in digital commerce innovation
Installed Customer & Partner Base
50+Global brand customers & partners
Global Scale & Reach
> 650Global travel retail experts5 office locations across 3 continentsHighest growth markets e.g. China
4© Datalex 2018
Global Scale
Dublin, Ireland
Manchester, England
Beijing, ChinaAtlanta, USA
Amsterdam, Netherlands
HeadquartersOffice locationCustomer location
© Datalex 2018 5
Addressable Market
$855bn2
Global digital travel sales by 2021
7.8 bn1
Passenger numbers are forecast to grow from 4.3bn in 2017 to 7.8bn
by 2036
New Markets
OTA / LeisureLoyalty CommerceDigital Payments
$82bnAncillary revenue –
increased by >250% from 2010(3)
40%Of all travel booking are made on digital
channels and devices(2)
DatalexAirlines
1 Source: 20-Year Air Passenger Forecast, IATA, October 2017 | 2 Source: Global Digital Travel Platforms Report 2017, eMarketer, 19 December 2017 | 3 Source: Ideaworks 2017
DatalexNew Markets
© Datalex 2018 6
“ We selected the Datalex digital commerce platform to innovate and improve the experience of engaging
our participants and the value Multiplus generates for our partners. This is part of our goal to be the best
loyalty network " Roberto Medeiros, CEO of Multiplus
© Datalex 2018 7
Market Forces Driving Adoption of ‘Platform Model’ The market is evolving and it is early in the adoption cycle
Opposing Market Forces Diffusion of Innovation – Crossing the Chasm
Late Majority
THE CHASM
Early Adopters
Innovators Early Majority Laggards
2.5 13.5 34 34 16
Legacy Domain Specific Systems
Innovative Products & Services
Channel Centric Retail
Customer Centric Retail
Legacy Supply Chain
Revenue & Margin Expansion
© Datalex 2018 9
The ROI of Digital Commerce x3
Sales growth through digital promotions in
2017
30%Increase in Sales
Philippine Airlines 77th
anniversary sales promotion
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”Our partnership with Datalexhas been a significant contributor to RASM
improvement and margin expansion.”
Most Successful Sales Day in Air China History through Direct and OTA
Partner Channels
Delivers Highest ROICof IAG Group : 26%
Multiple Growth Drivers
Multiple Growth Drivers
1.Large and growing
addressable market
3.Powerful
business model & proven performance
2.Market forces driving major
airline adoption
4.New Vertical
Market Opportunity
5.China
market opportunity
6.Best of Breed
Digital Commerce for Travel Retail
© Datalex 2018 11
Market Landscape
Datalex Occupies a Unique Position in its Market Segment
*
In-house PSS
Proprietary and Provider driven PSS Systems
Component Offerings whichsupport a Digital CommercePlatform
Digita
lCom
merce
Market leading Digital CommercePlatforms built for horizontalmarkets
Digi
talT
rave
lCom
mer
ce
Market leading, end to end DigitalCommerce platform built for Travel Vertical
Comm
erce C
ompo
nents
PSS P
rovide
r
© Datalex 2018 12
“The Datalex Digital Commerce Platform is a strategic asset for Aer Lingus"
Rachel Izzard, CFO, Aer Lingus
© Datalex 2018 13
Digital Commerce Capabilities MarketplaceDigital marketplace
Customer ProfilingPersonalize / Recommend
Offer CreationPrice, Target & Optimize
Trip ManagementCross Sell & Engage
Order ServicingFulfilment & service
PaymentOptions & Cost
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Marketplace Management
Digital CommercePlatform
Developers/Users/AppsDeveloper Portal Support for UXUI Development of Point of Sale Applications
Airline InventoryAll travel related products and services
Partner Travel SuppliersHundreds of supplier inventory
connections and hosted inventory controlHotel, Car, Activities, Insurance, Duty Free
PaymentsSupport for all major Payment Methods,
Fraud Settlement and PCI
Web / Mobile / B2B Channels / Call Centre / Inflight / Airport
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Business Value Drivers
Reduce Costs Simplified Fare Filing & More Efficient Search drives
millions of dollars in cost savings through reduced search volume
Compete and DifferentiateOptimize and Differentiate the Offer and Customer
Service consistently across all channels
Omni Channel RetailProvide a consistent and connected retail and experience across
all channels and touchpoints – expand sales channels
Increase RevenueOptimize and Dynamically Price/Merchandise Offers, Promotions and Discounts - Air & Ancillary Products and Services across B2B channels for Revenue Gain
Tailor & Optimize Unified Offer and Order Management ensures one single source of customer truth with a consistent view of customer profile and order
© Datalex 2018 22
Position within the industry
NDC Capable Level 3
ONE Order
Strategic Partner
As a One Order Strategic Partner, Datalex will engage with industry
peers to advance One Order industry standards.
Datalex was granted ‘NDC Capable’ Level 3 status under the NDC Certification Program. This status recognizes that Datalexsupports deployments using offer and order management messages where schemas are compliant with the latest standard NDC message scheme.
As a Strategic Partner, Datalex works with IATA members on One Order,
IATA’s Simplifying the Business (StB) initiative that
aims to modernize airline order management.
© Datalex 2018 23
Expanded Product Portfolio Product investment is central to our strategy of market leadership and growth
AI Dynamic Pricing Management for Travel & Retail Products
Virtual Currencies for SubscriptionPrepay & Credit Management
Cloud Infrastructure, Performance & Security
Multi-Airline Group Retail Platform
Airline Vacation Packages
Loyalty CommerceRetail & Partner Commerce Platform
© Datalex 2018 24
Michael StromerVP Tech Products, JetBlue Airways
“JetBlue Airways is pleased to extend its successful partnership with Datalex. We will continue to innovate and extend our digital travel retail offer and service
using the Datalex Platform.”
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27
Datalex Digital Commerce Platform Open System Architecture
EmployeeFinanceHR
Corporate
TarmacDCSGate
Ops
FlightCrewRedemptionAnalyticsSchedule
Commercial
DataDataDataDataDataDataDataDataDataDataData
RM
Data
Loyalty
Data
DCSREZINV
DataDataData
OtherRetail
PartnersData Analytics AI Machine Learning
Digital CommerceOffer Creation
Availability RES/DCS
CRM / Loyalty
DATA HUB
Digital CommerceOrder/Trip Service
Omni Channel RESTful API & NDC Level 3
© Datalex 2018
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Datalex Open Platform API Ecosystem
© Datalex 2018
EmployeeFinanceHR
Corporate
TarmacDCSGate
Airline Ops
FlightCrewRedemptionAnalyticsScheduleRMLoyalty
Commercial
DCSRezInvDataDataDataDataDataDataDataDataDataDataDataDataData
DataDataData
B2C UIs
REST-Enabled Applications General Partner Applications NDC-enabled Applications
Desktop UIs
Mobile Apps
Call CenterUIs
Seller Apps
Aggregator Apps
B2B Apps
B2C & B2B Apps / UIs
Kiosk Check-in
B2C UIs
Social Apps
Desktop Apps / UIs
(SOAP) Apps
CC / AgentApps / UIs
REST API NDC API
Datalex API Layer
Digital Commerce Platform
CORE Business Services (SOAP)
External Systems Integration Layer
Datalex Business Components
Offer Management Order Management Payment Management Data Management
External Hosts / Systems
Configuration Configuration Configuration
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Digital Commerce Platform Demands Performance and Scale
© Datalex 2018
Reliable
Horizontally scalable, proven, loosely coupled architecture
with strong interface contracts
Digital Commerce Platform
Scalable
Flexible infrastructure-agnostic deployment model to support required service
levels
Generated using our pricing & shopping software annually>25K offer per minute per customer<3.5 second response time requiredNear zero downtime deployments expectedHigh Availability or Hot/Warm failover
>9 Trillion Offers
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SaaS Opportunity
© Datalex 2018
Software as a Service
(SaaS)Model
Operational ModelReduce Time to ValueReduce Professional Services
ExpansionMerchant of Record /Travel ProductsDigital PaymentsConsultancy – Services
Partner EnableBuild, Service, Run, Sell
Market Growth/Reach Sales Pipeline Capacity
New Markets - Hospitality– Loyalty – OTA
Unconstrained Growth
32
Digital Commerce Platform Target State
© Datalex 2018
Web Server
Site/Region A Site/Region B
Load Balancing
Internet
Services Container Services Container
Heart BeatFederation
BPM BPM
ESB ESB
Data Data
Web Server
UI Components UI Components
Web Server
Services Container Services Container
BPM BPM
ESB ESB
Data Data
Web Server
UI Components UI Components
Zone 1 Zone 2 Zone 1 Zone 2
Cloud Native - High Availability – SaaS Model
• Cloud Native
• Highly Available
• Auto Scale or Scale on Demand – Ability to “Scale out”
• Enables Near Zero Downtime Deployment Capability
• Auto incident identification and self healing capability
• Enables “quick” fall back
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Platform Model
© Datalex 2018
Build Service Run Sell
Agility in Delivery and Service through Partners drives Volume – Value - Scale - Reach
© Datalex 2018
Dee WaddellGlobal Managing Director,
Travel & Transportation Industries, IBM
“IBM have partnered with Datalex to jointly develop and deliver new digital commerce capabilities as
part of the IBM Travel Retail offering.”
34
Open Innovation
Industry Technology PartnersScale of investment
Broad Solution ScopeCross Vertical Exposure
Datalex Labs @Cross Vertical Start-ups
Bleeding Edge TechnologyAgility & Disruption
Datalex R&DInnovative Travel Retail Solutions
Airline CollaborationsAgile Technology Evaluation
Datalex Digital Commerce
© Datalex 2018 36
Track Record of Innovation in Digital Commerce
First Airline focused Order Management System designed to
support the sale of all major Travel
Products.
BetterProducts
Faster Time to Market
SmarterSolutions
Industry Leaders
First to market Airline Shopping system
designed to support Branded Airline
Offers.
One of the first rule based Travel
Commerce systems offering a new level of business control
and flexibility to Airlines.
First to market with a Pilot of the new
Airline Distribution Standard – NDC (New
Distribution Capability)
© Datalex 2018 37
The future is Personal
Personalised Offers
Personalised Pricing
Personalised Retail Experience
Personalised Bundles Personalised Recommendations
© Datalex 2018 38
AI Driven Commerce
Pricing Strategies that maximize total
revenue for the Product
Dynamic Pricing
Behavioural Economics
AI DrivenInsights
Personalised Dynamic Offers
Behavioural Insights that influence
customer purchase decisions
Data Driven Insights that influence
customer purchase decisions
Dynamic Pricing+
Behavioural Insights+
AI Driven Insights
© Datalex 2018 39
Dynamic Pricing – A set of progressive Pricing StrategiesVariable Pricing
Location & Time of Sale
Value Based PricingCompetitive Pricing & Value Proposition
Personalised PricingCustomer Insights & Customer Value Score
Differentiated PricingCustomer Segment & Offer Context
Demand based PricingMarket Demand & Price Elasticity
© Datalex 2018 40
Dynamic pricing – Continuous Pricing
DEMAND
PRICEdynamic pricing(multiple price points)
1
2
34
5
DEMAND
PRICEstatic pricing(single price point)
1
THE REVENUE
THE REVENUE
© Datalex 2018 41
DEMAND
PRICEcontinuous pricing(unlimited price points)
THE REVENUE
Jun LiSVP of Sales & Marketing, Neusoft
“The Datalex and Neusoft partnership represents a market leading proposition for
Chinese travel retailers.”
© Datalex 2018 46
Multiple Growth Drivers
Multiple Growth Drivers
1.Large and growing
addressable market
3.Powerful
business model & proven performance
2.Market forces driving major
airline adoption
4.New Vertical
Market Opportunity
5.China
market opportunity
6.Best of Breed
Digital Commerce for Travel Retail
© Datalex 2018 48
Investment Case
GROWTH VISIBILITY
ü 85% growth in recurring revenue (2012-17)
ü Strong pipelineü Scaling for growthü Growth through partnership
ü Flexible operating modelü Favourable market dynamicsü Leadership & innovationü Track record of performanceü Reinvesting to accelerate growthü Enterprise-critical system
ü 8 years of growth in Adj. EBITDA & Revenue
ü Growth in Digital Platform Business
ü High customer retentionü New market entry: Loyalty
SUSTAINABILITY
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Leadership Team
THE TEAM
Aidan Brogan CEO
David Kennedy CFO
Alan Dunne CIO
Ornagh Hoban CMO
John Shields SVP Customer Success
Orla Kelly DIRECTOR OD
Alison Bell SVP GLOBAL SALES
Blair Koch CTO (President Americas)
Dan O’Brien COO
© Datalex 2018 50