Travelex 2011 full year results

28 March 2012

Travelex, the world's leading foreign exchange specialist, today announces further revenue growth during a transformational year in which the group successfully refocused the business on its core retail operations.

Group financial highlights

Further growth in revenue as Travelex continues to expand its network and provide customers with greater access through new channels
Group revenue for ongoing operations up 9% to £586.7m (2010: £537.7m) with growth across all major regions despite the short term revenue impact from natural disasters in Australia, New Zealand and Japan: UK (+13%); US (+8%); Asia Pacific (+7%); EMEA (+5%)
Group EBITDA for ongoing operations of £64.0m (2010: £66.4m) reflecting increased investment in online and other overheads associated with investment to support the Group's continued expansion
Statutory Group profit of £377.6m (2010: loss £59.6m) reflecting the exceptional profit on disposals to Western Union and MasterCard during 2011
Significantly strengthened balance sheet to support further investment following repayment of all outstanding Senior term debt

Operating highlights

Significant investment to increase Travelex's reach - through online, ATMs and partner relationships
Delivered a 34% increase in global online sales. Online sales now account for 30% of UK sales
Continued to roll out ATMs adding 175 new ATMs across the world. ATM transaction volumes have increased by almost 20% in the period
Further expansion of global stores network has included adding 133 new stores during 2011
Prepaid currency card sales up 39% driven by significant growth in the Netherlands, France and US
Continued expansion into new geographies - confirmed entry into Malaysia, completed acquisition of a significant shareholding in FX Africa and announced acquisition of Grupo Confidence, Brazil's largest foreign exchange provider
Completed strategic transactions to focus on consumer operations. Sale of prepaid Card Programme Management operations to MasterCard for a consideration of £290m completed in April 2011; sale of Travelex Global Business Payments ("TGBP") to Western Union for £606m completed in November 2011

Commenting on the results, Peter Jackson, CEO of Travelex, said:

"I am delighted to announce a good financial and operating performance. Despite the challenging trading conditions across the globe, our continuing investment to expand our network and enhance our customer offering resulted in further revenue growth across all regions.

2011 was a transformational year for Travelex as we executed our strategy to focus the business on our retail customers. In line with this strategy, we completed the sale of our Card Program Management operations in April and TGBP in November. The profit on disposal of these businesses was the largest contributor to the Group's £377.6m statutory profit. The proceeds from these transactions allowed us to pay down all Senior term debt resulting in a strong balance sheet to support our continuing growth.

Our ongoing operations reported revenue up 9% to £586.7m and EBITDA marginally lower at £64m reflecting the further investment, particularly developing our online offering, as well as an increase in overheads associated with investment in infrastructure to support our continued expansion. There was also a short term revenue impact from the natural disasters in Japan, Australia and New Zealand and I would like to praise the efforts of our teams in these countries for their tremendous effort in responding to the disasters and getting our affected operations back up and running as quickly as they did.

Sales generated from our online channels grew significantly, up 34% allowing customers to benefit from the convenience of home delivery or store pick-up. An increasing number of our customers want to use their mobiles to order foreign exchange and top up their Prepaid currency cards. Building our mobile capability and extending our Prepaid currency card into new regions will continue to be a priority in the years ahead.

Increasing customer awareness of the benefits of the Travelex Prepaid currency card as a means to manage currency spending abroad led to a 39% growth in sales. The UK, US and Australia represented the largest markets for the Prepaid currency cards but there was also significant growth in the Netherlands and France.

As well as investing in our online capability, we also opened new stores and ATMs at airports and tourist locations across the globe, as well as in supermarkets in the UK. In total, we added 133 new stores and 175 ATMs in the year. Our global network now comprises over 1,100 stores (including over 400 implant stores) and 850 Travelex ATMs in 23 countries.

Turning to the year ahead, global trading conditions remain unquestionably challenging. We have a clear strategy focussed on extending our global footprint and investing further in our customer offering through ATMs, online and mobile. Despite these challenging trading conditions, I am confident that our strategy, together with our leading brand and talented team of people will generate further growth for our group over the long term."