digital commerce for travel retail capital markets half

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.

Ornagh Hoban, CMO

The Market Opportunity

© Datalex 2018 3

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

The Platform Business Model in a Digital Marketplace

© Datalex 2018 8

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

© Datalex 2018 10

”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


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


© 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

The Digital Commerce PlatformAbram Richman, Chief Architect

© Datalex 2018 14

Airline Retail

One Product

1990s

© Datalex 2018 15

The First Digital Retail Revolution – LCCs

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The First Airline Product Revolution - Ancillaries

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Digital Commerce Capabilities MarketplaceDigital marketplace

Customer ProfilingPersonalize / Recommend

Offer CreationPrice, Target & Optimize

Trip ManagementCross Sell & Engage

Order ServicingFulfilment & service

PaymentOptions & Cost

© Datalex 2018 18

Digital Product Management

© Datalex 2018 19

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

© Datalex 2018 20

Datalex Customer Profile

19% ROIC >20% ROIC <9% ROIC

Industry Average

© Datalex 2018 21

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.”

© Datalex 2018 25

Platform ArchitectureBlair Koch, CTO

© Datalex 2018 26

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

28

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

29

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

30

Moving from On-Premise / Hosted to SaaS Model

© Datalex 2018

31

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

33

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

Digital Commerce Innovation Alan Dunne, Chief Innovation Officer

© Datalex 2018 35

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



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


© 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

© Datalex 2018 49

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

Capital Markets Half-Day, London Stock Exchange, 12 June 2018Digital Commerce for Travel Retail

ISE: DLE

digital commerce for travel retail capital markets half

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