Good day and welcome to the HolidayCheck Group AG Q3 2021 results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Dr. Marc Al-Hames, CEO. Please go ahead, sir.
Thank you. Good morning, everyone. Thanks for joining this call. Let's have a look and dive into the travel market, Q3. Just as a quick recap, you might remember Q1, Q2 was still quite heavily impacted in Germany from travel restrictions and even quite a massive lockdown in Q1. This is old news. Today, we talk about the summer. We've seen a very strong increase in booking demand and travel activity across the market in Q3, and this was despite the spread of the Delta variant. The summer clearly was not that much impacted from Delta. We've seen in the market that the demand for both package tours and hotels grew significantly in Q3, and this is even compared to 2019 levels.
Maybe as a quick outlook beyond Q3 already on the market development, October was also a strong travel month for the complete market. Since the beginning of November, I think we and most companies in the travel segment see the changing mood and the ongoing discussions about a fourth wave in Germany. You might have seen that in some states the traffic lights have switched to yellow or even red regarding infection numbers. There is chatter in politics about another round of lockdowns. It's very unclear what will actually happen. What we clearly see in the travel segment that the mood is changing, basically starting now. If we look at what this means for HolidayCheck, and we've been following the market basically, we had a very weak Q1.
We've seen a recovery in Q2, basically starting in June, and we've had a very strong Q3 with most departures happening between June and October this year. We've all over the summer continued a very strict cost discipline and a very targeted marketing. We've not used vouchers, and this enabled us to both serve the market demand and manage the bottom line at quite a pleasantly profitable level in Q3. Revenue, and this is very important, in 2021 we've changed our revenue recognition, as you might recall. We are only showing departed trips until September 30, 2021 in our figures, which basically means that most of the travel activity and most of the revenue is really concentrated within Q3.
If you do a comparison of Q3 this year to last year, bear in mind, this is travel activity in Q3. This means the Q3 revenue is actually quite high. We still have quite a bit of bookings in our books, approximately EUR 85 million transaction volume, thereof EUR 40 million that could in theory still travel this, EUR 40 million next year, EUR 45 million approximately that could travel this year. Based on our experience, some of this will be canceled out, especially now with the ongoing fourth wave discussion. Generally speaking, Q3 incredibly strong for HolidayCheck. With that, I hand over to Markus, who has the exact numbers around us. Thank you, Mark. Also, good morning from my side.
Regarding the financials, I think Mark already explained it quite nicely that you need to be very careful in comparing the current numbers to previous years, both be it through the revenue recognition and as well in terms of seasonality, because we've actually seen quite a shift in when people book. While in the past we've seen a massive pre-booking season, now we basically have very short lead times between booking and actual travel. You need to keep that in mind. Overall, I think what it still shows is that Q3 for us was a very strong quarter.
With revenue of EUR 37.1 million, we've managed to really hit a range that comes at least within reach of 2019 levels, again, but still is quite a bit below that still. I think we're on a good way to recovery there. Gross margin was EUR 25.6 million, which is also quite a bit up. I think. The big positive figure really is the operating EBITDA of EUR 15.1 million.
Just showing again that with the revenues that we show and that have been traveled, we could actually have them with very limited marketing expenses and with all the cost measures that we've taken over the last 18 months, really taking full effect and showing that we can have this business in a very different profitability, at least for the moment. Always knowing that marketing at that low level is nothing that we think is sustainable in a full swing market again. If we go further, I think the nine-month figures on page two just show that, due to the strong Q3, we managed to actually come into the profitability range. For the year to date, even on the net result side as well.
Revenues of EUR 46 million, gross margin of 33.3% for year to date. As you can see in year to date, marketing with EUR -1.7 million still at a very, very low level. Personnel expenses with EUR 15.9 million pretty much in range what we had over the last couple of quarters. The other expenses with EUR -9.2 million, somewhat up on the quarter we can see that on the next page then. Again, pretty much in line with what we had in cost improvements over the year as well. Overall EBITDA EUR 7.2 million for year to date and operating EBITDA of EUR 6.9 million.
Really breaking it down, the discontinued operations are completely already processed, so we don't see any effect of them this year. The net result of +EUR 1.7, I think we're very happy with that result, just given, as Markus Scheuermann also pointed out in the beginning, that we this year, beginning of this year until end of April, mid-May, we actually had a complete lockdown of the economy. I think that just shows that people want to travel and they actually took the opportunity with a lot of the restrictions lifted in summer to really do what they wanted to do.
Quickly going into the quarterly view, I think on page nine, that's what we see most really is that the revenue figure of EUR 37.1 million really jumps out from this picture. I think it just shows that Q3 last year two effects. Number one is there was still a lot of hesitation because there was no vaccination in the market. Again, the aforementioned revenue recognition was different. Again, please be careful in comparing those numbers. The EUR 37.1 million of revenue or the EUR 25.6 million in gross margin. I have to just quickly point out on the slide that you have, there's one mistake. The gross margin in Q3 is not EUR 25.4 million, but it's EUR 25.6 million.
That's an error on our side. We will correct that in the uploaded version on the homepage. That's, I think, just a minor. It doesn't really change anything materially. What you can really see is again, marketing expenses still at that high level of gross margin and revenue. We were able to keep our marketing expenses pretty much at bay and really manage with a lot of the organic traffic that we have to really get this revenue in and have people travel. Personnel expenses, again, we've already indicated over the last couple of quarters that EUR 5.2-EUR 5.5 is the range of personnel costs that we expect on a pretty much ongoing basis for this year.
Again, we steered that I think fairly clearly within that range. The other expenses were of course up, given that there's a lot of variable expenses in there when it comes to cost per booking, for instance, for all the service providers that we use. Overall, a very strong quarter and that quarter really helps us to lift the entire year to a level that I think is quite pleasantly. Current situation. Again, a lot of uncertainty in the market, but I think we're well prepared. First of all, with the cash position of EUR 72.7 million as of September thirtieth.
Of course, the big jump in cash came through the capital increase that we did beginning of the year, where we had net proceeds of just about EUR 47 million. We used that to pay back some of the short-term loans that we had, which were still outstanding of EUR 10 million, that we paid back in Q1 and Q2. Right now there's still only the COVID plus loan in Switzerland, that is effective with CHF 13.5 million, that is used where the first installment is due Q3 of next year. Overall I think you can really see that we have a very healthy net cash position.
Now even with a fourth wave more or less on the horizon and all the infection figures now, really skyrocketing at the moment. A lot of uncertainty, but I think we're well prepared to withstand that, even then. I think all the comprehensive measures that we've taken, marketing, like I reiterate myself, that's something that we manage very closely, still at a very low level, mid to long run. Very unlikely that we can maintain that level. Personnel costs, that's something that we actively reduced, over the last 18 months. The other expenses is also still at bay. Overall I think, it just shows that, the frugal approach that we took over the last, 12 to 18 months really showed its effect.
Now with some upside in the market, we really were able to harvest that. If we look forward, again, I would love to say that we have a very clear picture on how it will play out. Unfortunately, the infection figures and all that just throws in again, a wrench into what we would love to see as a strictly oiled machine, but it is something that we need to take very seriously. October was still very good, but we're seeing early signs that people are becoming more hesitant in their bookings because of the increasing infection rates. As Mark also pointed out, we have some bookings already in our order book, so to say.
If the infections increase, there is a risk of some of those revenues being canceled again and again, not being revenue for us. Again, we're being more on the cautious side here, and I think it just shows that it was the right decision to adjust the revenue recognition to date of departure, not date of booking. Overall, November and December still really unsure what's gonna happen there. We have to see, but I think with all the positives that we've taken from Q3 and from October, we should be in good shape that the entire year should not completely turn around again. Beyond that, I think we have a fully functioning business. I think we're well prepared to pick up the demand if it is there.
We've shown that in Q3, we plan to continue doing that, going forward as well. In terms of guidance, we've deliberately and of course knowingly been very cautious with the guidance in the beginning of the year with our negative scenario and the positive scenario. With Q3 now kind of like in the books, we can very confidently say that it's very likely that we will end up in the positive scenario. That we will actually have a gross margin that is at least double what we had in 2020. And also that in terms of profitability, I think it is clearly that we will be better than we had in anything in 2020.
Again, with November and December still unclear given the current situation, we're still not in a position to give an exact outlook of what 2021 actually will end up like. Yeah. Overall, I think our long-term objectives remain the same, that we will leverage our platform as the trusted authority in the travel industry to be the place for urlaubers to really get their information and book their trips. Of course, we will use our HolidayCheck Tours tour operator to play a more important role in our business while always being neutral for the Urlauber and really making sure that they get the best decisions that we can give them.
One more thing on the planned delisting. That's probably something that you've already been aware of course. The offer has been published by Burda end of last month. We're currently in the process of preparing the required joint statements by the supervisory board and the executive board. We have to publish that by the end of this week. Of course, we will keep the legal requirements in here. The exact date we really have to see, but it certainly will be within this week. I think within that statement, then you can more or less really read what our view on the offer of EUR 2.70 will be.
Until then, I basically would have to refer you to wait until we publish that statement, and where we have a disjoint view of the Supervisory Board and Executive Board. With that, basically that was Q3. Again, very positive, we were very happy with the results there. Now we're very happy to take your questions.
Thank you, sir. Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad. Please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. Again, please press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. Our first question comes from Felix Ellmann from Warburg Research. Please go ahead.
First of all, congratulations to the numbers. This was really good. For me, looking at the stock for so many years, it was fantastic to see what you reported today. One question. I'm just interested in the midterm, when you're gonna be increasing your marketing spends again, and to what extent, which I'm just personally interested in. Unfortunately, in terms of the stock, I think the story is, yeah, written. First of all, thanks for the words. We are happy with the numbers as well. Marketing is the big unknown and, well, you cover us for a while, so you know it has a significant impact on the profitability of the business.
I think we've very successfully managed it this year, despite the fact that competition has increased the marketing. We don't believe what we see today is sustainable at all. We also hope that we will never go back to the 50-ish percentage points we had pre-COVID. Whether it will be 35, 40 or 45% marketing quote in the future is really, for us, unpredictable. Obviously, we hope and we have actions to keep it as low as possible. But it will be somewhere between 30% and 50%. And where exactly is very hard for us to prognose at this point.
Thank you.
Thank you.
There are currently no further questions in the queue. As a reminder, to ask a question, please signal by pressing star one. We have a question from Werner Friedmann from Assenagon. Please go ahead.
Yes, good morning, gentlemen. Thanks a lot for taking my question. The first one would be on the sales contribution, how much sales your own tour operator contributed in Q3?
In terms of the top line, I think an easy way to reconcile that if you take the cost of goods sold as the first indicator. The cost of goods sold is basically only all the required flight and hotel capacity that our tour operator books for our Urlaubers. You can assume that our tour operator operates on a with a slight positive margin in terms of like revenue minus cost of goods sold. I think cost of goods sold plus I don't know something like 10% gives you a good indication of the revenue that the tour operator actually operates in.
Yeah. Okay, that's understood. If you take the total amount of travel you sold, what share did your own tour operator contribute to that?
As Marcus just said, we don't explicitly mention in public the share, but you can do a very good approximation by dividing the cost of goods sold by the revenue, which I'm not that good in my head. If you divide these two numbers, you end up at around 25%. Is this correct, Marcus? I'm looking at you. No, I have to correct that. Okay, Marcus has to correct. No. What do you need to do? Basically, if you see gross margin, just assume that pretty much is predominantly the commission-based business. On a commission-based business, we have about a 10%-12% commission that we actually get.
Just to make it easy for Q3, assume that we have EUR 250 million in total transaction volume. Of that, you can see that basically with the cost of goods sold of EUR 11 million, that just for sake of argument, say tour operator has total transaction volume of about EUR 50 million. With that, you can more triangulate pretty clearly what the share of the tour operator is. With that, you can see that it didn't play that massive a role. It is a decent size tour operator within our portfolio, but it certainly is not the biggest one. Thank you, Marcus. It's good to have him covering my back.
Okay. Another question I would have, your order backlog that you usually did not present in the last years, so to better understand it and not make a mistake, what sales volume or maybe better, what gross margin would that represent? If just thought if that EUR 85 million, if there would be no cancellations at all, would there be a gross margin of?
I mean, again, same logic, just turn it around, 85 million times our typical commission rate of 10%-12% gives you what kind of gross margin. What type of gross margin you would have to add to what we might be able to do.
Okay. I think some people have misunderstood this.
No. And that again comes down to the change in revenue recognition. We did not need to show, actually, we could not show any of that in the past because in the past, we always showed revenues at time of booking. That's basically.
Yeah.
When somebody booked in January a trip for August, we showed that as revenue in January. That's basically why we didn't have an order book that, like, we had somehow booked within our systems but didn't show as revenue because we've already shown all the revenues that we were expecting.
Yeah.
Now, with COVID more or less changing the logic, we take a very cautious approach, and we only show as revenue trips that really have been traveled, where we are fully entitled to the revenue, and where there's no risk of cancellations. This order book, so to say, is just a cautious view on if there were no cancellations, there might be a chance of getting an additional X, Y, million in gross margin. Given the current situation with really the figures in COVID infections skyrocketing, I would argue there's actually, unfortunately, a quite big chance that those EUR 85 million will not stand as they are right now. I basically would have to discount them quite a bit to basically assume what comes out.
Again, over the last 18 months, my crystal ball has never gotten really any clearer or smarter, and that's right now based on assumptions. I think the EUR 85 million, I would be surprised if they more or less came just as they are booked right now.
Of course. Next question would be in a world without COVID, what would be the sales contribution by quarter you would expect in a normal year?
That depends. If we stick with the revenue recognition that we have today, if the sales comes by traveling, obviously Q3 is and would still be the peak season of our business. But compared to 2021, in a normal non-COVID year, we would expect more volume in Q1, Easter in Q2, and also Q4 with the long-haul destinations being open. We would generally expect in a normal non-COVID year, all quarters to be significantly higher. Clearly Q3 would always be the peak travel volume.
Mm-hmm. Okay. Would this be something like 15% in Q1, 25% in Q2, 40% in Q3, and the remainder in Q4? Is that a good guess?
I mean, now, remember, we're thinking on our feet right now. I think the figures you mentioned sound reasonable, but it certainly would take some more analysis really on the travel behavior to verify that. I think in terms of like order of magnitude, I think that sounds pretty fair. Again, sorry that we don't have this figure at hand because in the pre-COVID times, so the time frame, we've never looked at this revenue distribution because we booked with incoming bookings. We don't have that figure at hand right now here.
That's fine. Last question from my side.
How wrong would I be?
Would be on the outlook and actually I do not know quite exactly which reference values for 2019 and 2020 for the gross margin I would take.
You mean now on the guidance?
Yes, on the guidance. That you say double the 2020 value, but stay below 2019. Which are these two reference values you're relating to?
Now you're catching me really on the wrong foot because I don't have the exact figures right in front of me as well. I think in terms of overall revenue, I think 2020 was EUR 13 million because already the first nine months are EUR 11.2 million, and now we have just one more quarter. Actually, there we had already a very weak quarter last year. I think it was EUR 13 million, but that's certainly figures that we can provide you with.
Mm.
After that call.
Okay, fine. Okay.
But it is-
No worries. Thanks a lot.
Thank you. There are currently no further questions in the queue. As a final reminder, to ask a question, please signal by pressing Star one. We will pause for just a moment. As there are no further questions in the queue, I would like to hand the call back over to our speakers for any additional or closing remarks.
Thank you all for dialing in, and I hope you have a safe Q4 and autumn coming. I can also recommend there are sunny areas in the world right now. For example, Canaries or Turkey are still worth traveling. If you want to book a trip, give me a call after this investor call, and I'll help you find the best trip for you and your family. Thank you all for dialing in.
Thank you. This concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.