Good morning, everyone, and welcome to the Trainline Results Presentation. My name is Seb, and I will be the operator for your call today. If you would like to ask a question on today's call, you may do so by pressing star one on your telephone keypad, or press star two if you would like to withdraw your question. I will now hand over to Jody Ford, CEO of Trainline, to begin the call. Please go ahead.
Good morning, everyone. Thank you for joining us today for our half-year results presentation. I'm Jody Ford, CEO of Trainline, and I'm joined by Pete Wood, our CFO. Let's first go through the disclaimer. On to the agenda for today. I'll give an introduction, briefly discussing the progress we've made in the first half of the year. Pete will talk you through our financial performance. I'll then update you on how we're progressing against our strategic priorities. After that, we'll hand back to the operator for questions. The group delivered a strong financial performance in the first half, with Net Ticket Sales up 23% and revenue up 19%. Together with the benefits of operating leverage, this drove a 26% increase in Adjusted EBITDA, while our Operating Free Cash Flow increased by 166%.
Our performance reflected the strong progress we're making against our strategic priorities. In the U.K., we continue to digitize the commuter experience, growing our share of the commuter segment to 22%, while in international, we further positioned ourselves as the aggregator in liberalized European rail markets, with combined net ticket sales across Spain and Italy up 50%, partly offset by slower web sales in the half. I'm delighted to add that we are now Europe's number 1 most downloaded rail travel app. As a reminder, Trainline is a tech company with a clear purpose: to empower people to make greener travel choices. We seek to do that by building the world's leading rail platform, which makes it much easier for people to travel by train. In addition, we champion the environmental benefits of rail, highlighting how it generates significantly lower emissions than driving or flying.
Our approach is to inspire pride in those that take positive action. We launched I Came By Train initiative last year, gaining strong early momentum with industry and government stakeholders. We've now followed up with a new consumer campaign that celebrates all the heroes who travel by train, and we've also launched Your Sustainability Story, giving personalized information to customers on their emission savings. As I look ahead, I continue to see considerable tailwinds for our growth. We operate in a EUR 60 billion rail market with significant planned investment in capacity growth. This investment is particularly focused around high-speed rail, including EU targets to triple high-speed passenger volume by 2050. People are increasingly using online and digital channels to book rail tickets, with e-ticket penetration in the U.K. more than doubling since pre-COVID to 46%, yet there remains significant runway in our markets for further migration.
Given our leadership in this space, we are not only well placed to benefit from this trend, we are actively driving it. And liberalization of European rail markets is creating more fragmentation in supply and greater competition among carriers. In aggregate, new entrant carriers now compete on 12,000 km of high-speed rail routes within Western Europe. The increasing competition this brings creates a greater need for a marketplace like Trainline. As a reminder, Trainline invests to provide all the carrier options and fares in one simple, easy to use mobile app. Underpinning these tailwinds is the increasing momentum around the need for a level playing field within rail retailing. This notably includes the recent regulatory developments in Germany and Spain. Altogether, these structural tailwinds represent significant and long-term growth opportunities for Trainline. With that, I'll hand over to Pete to talk through our financial reports.
Thanks, Jody, and good morning. Before I step into the financial performance for the group, I will briefly unpack the performance of our business units. Starting first with UK consumer, net ticket sales grew 19% to GBP 1.7 billion, despite the impact of 11 strike days in the first half. Growth was led by commuters and people booking on the day of travel, who increasingly benefit from Trainline's innovative set of products and features. Long distance and leisure travel also remained strong, having recovered more quickly post-COVID. Underlying demand strengthened as industry passenger numbers continued to recover, alongside a 6% fare increase and further growth in people using e-tickets. Looking forward, the recovery path for the industry appears to be normalizing, and there are currently no signs of the rail strikes letting up.
December will see the expansion of TfL's contactless payment zone around London and the Southeast as part of the next phase of Project Oval. As we've previously said, we expect Project Oval to put around GBP 150 million of our net ticket sales at risk. However, given the underlying strength of the UK consumer business, I feel confident we will continue to demonstrate strong growth in the second half. Our international business grew 24% to GBP 558 million as we further positioned ourselves as the aggregator in Europe's liberalizing rail markets. The strongest performance came from the markets with the greatest level of carrier competition, Spain and Italy, with combined growth of 50% year-on-year. French growth slowed following our decision to pause brand marketing, which we announced in May, ahead of further liberalization in this market.
Growth in web sales also slowed as the half unfolded, most notably in foreign travel. This reflected a normalizing of demand following a strong recovery last year and more competition arising from rail carriers in keyword auctions. We also saw some impact from changes to the presentation of search engine results. Jody will provide more on this later. In contrast, our growth in mobile app sales remained strong in H1, with the share of our transactions coming through the app increasing to more than 60%. This reflected our long-term investment in our brand and app experience to grow habitual app use for more regular journeys. I said in May that I expected EBITDA to approach breakeven on a pre-internal transaction fee basis this year, and in the first half, we tracked in line with that guidance.
This partly reflects our disciplined approach as we prove our way into new markets, closely managing lifetime value and cost of acquisition for new customer cohorts. Trainline Solutions grew 38% to GBP 378 million. As a reminder, this business unit provides B2B retailing capabilities to rail carriers and other travel platforms. Trainline Carrier Solutions delivered a strong performance in the half, while business travel in the U.K. continued to recover from a low base. Bringing that all together, the group achieved strong growth in net ticket sales, up 23% year-on-year to GBP 2.6 billion. Revenue increased 19% to GBP 197 million. This was slower than net ticket sales, given the mix effect of faster growth in international and Trainline solutions.
In addition, the take rate of our UK consumer business saw some dilution from faster growth in commuter and short-distance travel, as these segments provide less scope for monetization. Jody will discuss later how we are nurturing ancillary revenue streams, which should help mitigate the dilution. Gross profit was up 17% to GBP 151 million. This was slower than net ticket sales, reflecting in part industrial action in the U.K., with Trainline incurring higher customer service costs as a result. Profitability growth outpaced net ticket sales and revenue, reflecting the benefits of operating leverage. Marketing costs increased 15% to GBP 37 million as we acquired more customers and continued to invest in our brand. Other admin costs increased 11% to GBP 57 million, as we incurred higher AWS costs within Platform One from processing more transactions.
It also reflected the additional costs of having increased the size of the team to scale the business, the hiring for which we completed last year. Net of these costs, adjusted EBITDA was GBP 57 million, up 26% year-on-year. The business continued to deliver strong cash generation with operating free cash flow of GBP 77 million. This reflected increased EBITDA and working capital inflows, with our working capital profile normalizing following a period of COVID-related volatility. It was partly offset by higher CapEx investment in product and tech development. As a result, our cash generation, our leverage further reduced to 0.7x EBITDA. Given this progress, in September, we formally laid out our capital allocation framework, in line with which we announced a GBP 50 million share buyback program. All in, we have made a strong start to the year.
As I look ahead, we remain well positioned for further growth, and as you will shortly hear from Jody, our team is delivering against a clear strategy. As a result, we are tightening our guidance for this fiscal year towards the upper end of the range. We expect for the group net ticket sales growth of 17%-22%, revenue growth of 15%-20%, and adjusted EBITDA as a percent of net ticket sales of between 2.15% and 2.25%. Thank you, and I'll now hand back to Jody.
Thanks, Pete. Let's now talk about the progress we're making against our strategy, starting with our UK consumer business. Our first key priority in the U.K. is to provide customers with an excellent user experience, offering them unrivaled value and removing friction when searching for trains and booking tickets. We have a strong and consistent delivery of new products and features. I'd like to touch on a couple of recent highlights that are helping unlock value for customers and re-remove friction. We launched a new weekly price calendar, displaying to customers the days that are cheapest to travel. We also launched Strike Safe, which tells customers whether the journey they are searching for could be affected by rail strikes, and also enabling them to book with confidence. We are priming our mobile app to better serve commuters, including developing a full suite of ticket types within the app.
This includes Digital Seasons tickets, which we have rolled out to almost a third of the U.K. network. We have driven strong take-up so far, with our share reaching around 20% of all season tickets sold on routes where Digital Seasons are enabled. And we are seeing positive retention benefits, with Digital Seasons customers exhibiting twice the retention levels of our overall customer base in the U.K. This is contributing towards our continued growth in the commuter segment, with our share now 22%, up from 20% a year ago. Our second priority is to build customer demand. Our flagship brand campaign, Great Journeys Start with Trainline, has focused on telling customers how they can save 35% on average when booking a journey through Trainline, which is clearly relevant given the higher cost of living.
The campaigns also point to the environmental benefits of rail travel, reflecting our core purpose to encourage greener travel choices. In the second half, the campaign will highlight more the convenience of digital ticketing, including Digital Seasons. On to priority number three, increasing customer lifetime value. We're making good progress, encouraging more customers to use our 4.9-star mobile app, which now makes up almost 90% of our transactions in the U.K. This is driving our transaction frequency, given app customers in the U.K. transact 50% more than web customers....Having significantly scaled Net Ticket Sales over the past few years, we'll now look to enhance monetization to drive faster revenue growth. This includes ancillary products, leveraging the partnerships we have in place across hotels, car parking, and taxis.
In addition, we plan to launch new flex cover product, allowing customers to cancel plans for any reason and get a refund. We're enhancing native ad placements within our sales channels to optimize advertising revenues. Now, let's turn to our international consumer and first remind ourselves of our approach to growing the business. In May, we outlined how we are prioritizing the rail markets where we have the strongest proposition. On the left-hand side are the domestic markets, which enjoy widespread carrier competition, Spain and Italy. We are rapidly expanding in these markets as we seek to become the aggregator of choice, and we expect our strong growth to continue into the second half. In the middle of the slide is foreign travel. This represents global inbound and intra-EU cross-border travel and generates double-digit take rates.
Taken together, Spain, Italy, and foreign travel represent a EUR 10 billion addressable market, similar in size to that of the U.K. On the right-hand side are the markets which represent future opportunities for Trainline, France and Germany. These are large rail markets, each similar in size to the U.K. Together, they make up around 40% of our net ticket sales in international. And we also outlined in May, we are reducing the priority of these markets as they are less mature from the perspective of carrier competition. So for this year, I'd expect single-digit percentage growth rates for France and Germany combined. But when carrier competition does arrive, we plan to position ourselves as the aggregator in these two markets, giving Trainline a long runway of sustainable growth.
In France, Paris-Lyon is the only domestic high-speed route that currently enjoys carrier competition, following Trenitalia's entry in December 2021. On this route, our aggregation proposition is working well, growing at a similar pace to our growth across Spain and Italy. But one route doesn't offer enough opportunity to differentiate Trainline as the market aggregator, and therefore we have paused brand spend. However, there are encouraging developments of market liberalization. Spanish carrier, Renfe, it has this year launched cross-border services between France and Spain, and from 2024, they plan to launch a service between Paris and Lyon, which will mean four carrier brands competing on that route. And then in 2025, new entry carrier, Evolyn, plans to launch a London-Paris service to compete with Eurostar, while Le Train is planning new high-speed service in Western France.
In May, we discussed how we are tailoring our approach to each domestic market based on their respective level of maturity. As a recap, for Phase 1 countries like France, we will continue to focus on providing a great user experience for all key journeys and prices. For Phase 2 countries like Spain, we are making aggregation a key differentiator for Trainline. This includes ramping up marketing spend to grow brand awareness and acquire new customers. Finally, for Phase 3 countries like Italy, as we establish ourselves as the number one aggregator, we can deepen customer relationships, including by encouraging greater app adoption. And as more carrier competition arrive in Italy, such as SNCF OUIGO in 2026, we'll have an opportunity to shift our approach back to Phase 2, ramping up aggregation to stimulate faster growth.
Let's now talk about the progress we're making against our growth strategy in international. We'll start with how we are enhancing the customer experience. In our core markets, we continue to add all new carriers and routes as soon as they come live. We've integrated Renfe's cross-border routes into France and are already taking a mid-teens % share. While in Spain, we are now integrating Cercanías regional trains. This will allow us to increase transaction frequency and retention in this fast-growing market. At the same time, we are localizing our mobile app for each respective European market. In Spain, we have embedded iryo Exchange, allowing customers to swap their tickets for a different train. In Italy, we've added Satispay, an increasingly popular new payment method in that market. It's hard to imagine any other aggregator apps doing this depth of integration and product localization.
The Spanish rail market is liberalizing incredibly quickly. The top five high-speed routes in Spain have now opened to carrier competition, with new entrants already taking significant share. This is bringing a broad range of benefits on these routes, with service quality improving, fares roughly halving, and rail ridership significantly increasing. Looking at the first two routes to liberalize, passenger volume grew 36% year-on-year on Madrid to Barcelona and 86% on Madrid to Valencia. This is providing ideal conditions to position our mobile app as the market aggregator of choice, with our share on both routes having grown to 11% relative to a sub-1% share across Spain only a couple of years ago. Moving on to our second priority, building demand.
In Spain and Italy, while providing all the carriers and journeys in our one mobile app, we are running nationwide brand campaigns. They primarily focus on train stations, where we can target 100% of the train traveling public. Since launching these campaigns, our brand awareness has almost doubled, reaching 34% in Italy and 15% in Spain. Turning now to how we are building demand in foreign travel. Last year, we saw a strong recovery in demand for foreign travel, particularly from the U.S. This year, we have sought to build on that. Using targeted advertising, like housing native digital content on travel sites and pushing out-of-home advertising at prominent international airports, running PR campaigns and promotional offers for supply partners like Eurostar, working with influencers, and developing marketing into to leverage popular sporting events like the Rugby World Cup in France.
All of this helped to generate further good growth in foreign travel sales. As Pete referenced earlier, web sales growth slowed during the first half, following a strong rebound in demand last year, particularly for foreign travel. We saw the recovery in underlying demand normalize during the half. We also saw more competition from carriers on keyword auctions following a relatively benign period last year. And finally, Google are now including trains within their travel module, which in turn is pushing organic search down the page while increasing the prominence and so the cost of paid search. In response, we're investing to integrate Trainline into the travel module. We are live on key routes in Spain and Italy, and have a path to integrate on more than 1,000 over the coming months.
In addition, we will continue to strengthen our product market fit, including the future launch of Eurail and Interrail travel passes. The slower growth in web sales has had a more pronounced impact on foreign travel, where a high proportion of our sales come through web rather than app. As a result, I would expect lower double-digit percentage growth rate for foreign travel sales this year. The slower growth in web sales has had less of an impact on domestic sales. This reflects our success in switching domestic customers onto our mobile app so they can access a superior user experience. As I mentioned earlier, over 60% of transactions now come through the app in international. Italy is the best example, where the app now makes up over 70% of all transactions.
As customers engage more habitually with Trainline, particularly through our mobile app, it increases our relevance for more of their travel needs. Like in the UK, app customers in Europe transact far more frequently than web customers. In fact, in Italy, they transact 3 times as often. This includes a greater propensity to use Trainline to book shorter distance regional journeys, even though no carrier competition exists on those routes. Over the last year, regional ticket sales in Italy grew 42%, and they were 5x what they were pre-COVID. While growing app usage and transaction frequency, we are beginning to add more ancillary products as a means to improve the customer experience and enhance monetization. In the first half, we introduced hotels into the booking flow in partnership with Booking.com.
While our primary focus remains to grow net ticket sales, there are early signs this could be a helpful revenue stream. Turning to our fourth priority, growing Trainline Solutions. In the first half, we further strengthened Platform One, and we leveraged that strength to better serve our travel partners. This included launching new innovations, including a new train loading feature for Greater Anglia's mobile app. This allows them to display the busiest train carriages to their customers. In addition, we enhanced the loyalty scheme options available within Italo's online and retailing channels. As we've extended five White Label contracts in the first half, giving the carriers continued access to our industry-leading core platform functionality and customer experience features. Within Platform One, we harnessed advanced machine learning to deliver data-driven features and greater personalization. Notable examples included SplitSave and Price Prediction.
They also include Recommended for You, which makes personalized suggestions for new trips customers might like based on their purchase and search history. We see Generative AI as additive to what we're already doing in this space. Within Trainline, we recently set up AI labs. Here we are developing our own proprietary AI models that will help us to solve more complex problems. By combining these models with our unique, unique data sets, we are widening the opportunity to create smarter and more personalized experience across the whole user journey. It's still very early days, but our first experiment is already live. It's a new guidebook feature that generates recommendations of what customers might like to do at their intended destination within the booking flow, sparking inspiration for their journey, and this is just the start. Before we open the floor to questions, let me recap on some key takeaways.
We delivered strong performance in the first half, despite the impact of strikes, with top line growth, higher profitability, and increased cash flow generation. As a result, we have tightened towards the upper end of our guidance range for the rest of the year. In the U.K., we are digitizing the ticketing experience, particularly for commuters, while our share is now 22%. While in Europe, we are driving particularly strong growth in Italy and Spain, the most liberalized markets in terms of carrier competition. This includes achieving 11% share on the top Spanish high-speed routes, and we are continuing to grow. We are well placed to manage greater competition in web sales and international consumer, and we continue to encourage more customers to download and use our mobile app.
This is giving them a better user experience, increasing the amount they transact through Trainline, and cementing our position as the number 1 rail app. Finally, as I look forward, I continue to be very excited by the opportunity ahead, our long-term growth tailwinds, and the progress we are making in delivering to our customers in the U.K. and across Europe. Thank you very much for listening. We'll now come back to the operator for questions.
Thank you. Once again, if you would like to ask a question, please press star one on your telephone keypad now or press star two if you would like to withdraw your question. Our first question comes from Marcus Diebel from JP Morgan. Please go ahead.
Hi, everyone. Two questions from my side. The first one is on for Pete. Clearly, you're progressing very well and cash generation, very strong equity potential now. Very soon, you're reaching potential cash levels. So how do you think about the dividend distribution, about running the business, at what kind of leverage or cash level? Because that question will come to you at some close point in the future. That's the first question. Second question is just again on marketing spend in the international business. Given particularly Spain and also Italy, the success that you have there, is it now not the time to push even harder on marketing because the successes or the return on that marketing is clearly there. How do you manage that? Thank you.
Thanks for the question. Pete, do you want to pick up the first one?
Yeah, certainly. Yeah, so thanks, Marcus. Look, we've made really good progress from a leverage perspective. So coming down from 2.3x Adjusted EBITDA to more like 0.7 now. And this reflects the net debt reducing and also the increase in EBITDA. And the way that we think about this is that we aim to keep an efficient capital structure in place. And of course, this then relates to the capital allocation policy that we've put in place, and primarily that is there to target where we can invest behind our strategy and in organic growth opportunities. And we will continue to manage debt within that as well.
And then as we look ahead, the board will continue to consider the options available, which could be a range of options, but essentially, to keep an efficient capital structure in place. I'm not imagining that we will get to a point where we will want to run this to a net cash position or to carry excess capital for a sustained period of time.
If I pick up and start on question two, and then, Pete, maybe add to it. I think, look, broadly speaking, we are in terms of the investment in marketing, just to give a kind of strategic flavor of what that looks like, we, as you know, continue to invest from a kind of an optimized way on the performance marketing, kind of leaning into the CLVs there, looking kind of a few years out, because we can see the opportunity that's opening up, particularly in Spain right now, and we can see in Italy with the advent of OUIGO launch in 2026, how that provides real option value there. So we remain very focused on that.
And then we have layered in, as you know, over the last sort of 12 months in Spain, the last 18+ months in Italy, brand spend, which is a combination of kind of out-of-home and digital. And our expectation is that we'll continue at kind of roughly the same level that we've had over the last year or so in those markets, 'cause we see good returns, and we're getting better at that and optimizing 'cause we've been learning into those markets. So I think high level, expect to see more of the same in those markets, and look, if opportunities come up to lean in harder, we'll of course take them, but they'll be based on the performance. We manage it very closely.
Perfect. Maybe just in addition to Pete's answer as well. So how do you think in this context then, around potential M&A? I mean, it doesn't seem that there's anything large obvious. But shall we assume, when we look at the cash flow generation, that there might be some of the cash spent on M&A, or is that something, you know, in the past, you commented it's rather small. Is that still the case?
So of course, we continue to look at the market and assess opportunities to further expedite progress against our strategic priorities through inorganic means and through M&A. I think there are not many obvious targets, but there are some, and we'll continue to consider how they might fit with our strategy.
Okay, thank you.
Our next question is from Miriam Josiah from Morgan Stanley. Please go ahead.
Hello, can you hear me?
We can now, yes.
Hi. Hi, everyone. Good morning. Yeah, two questions from me. Firstly, just on revenue growth. I think you mentioned sort of a number of initiatives to enhance revenue growth in the U.K. So just wondering how we should think about the cadence of revenue growth ramping up. Obviously, revenue growth is growing below net ticket sales, and I guess within the guidance as well, you've slightly lowered revenue relative to net ticket sales. So I guess, how should we just think about the cadence of that changing? You know, would we expect revenue growth to be growing faster than net ticket sales within the next year or potentially longer? And then perhaps if you could just talk about what specific initiatives you would expect to be the most meaningful. Thanks.
I'll let Pete pick up and start on the first part.
Yeah. So, you see net ticket sales in the U.K. Sorry, you see revenue growth in the U.K. a bit behind net ticket sales. And really, this is about the mix of the business. We have greater opportunity to monetize customers that are buying in advance and taking longer distance journeys, and at the moment, that is continuing to grow nicely, but we're seeing faster growth in the commutes segment and on the day travel, where the opportunity is less. And so there's a natural dilution of revenue as that unfolds. And as Jody outlined, there are some ancillary revenues that we are beginning to nurture.
Our focus really remains on driving net ticket sales, and that is the fundamental driver of revenue at the moment. But there are some opportunities that we're seeing to support further take rate upside, which can offset some of the natural dilution that sits there. And the way that we approach this is to test and learn. So we have some ancillary services that are in the product already, and this gives us some good signals, and that allows us to then refine and hone where we show them, to which customers and which moments, and then we can build on these revenue opportunities as we go forward.
If I step back and think about how all that fits together, I think the natural headwinds that we have with the dilution effects will persist. I think these opportunities can offset that, but I don't expect in the next couple of years to reach a position where revenue is growing more quickly than net ticket sales.
... and then one other point of note, I'm sure you're aware that we have the change to the commission structure that comes through in 18 months or so, and that, of course, will provide a bump in the revenue. There's a 50 basis point reduction in the commission in the U.K., and that will be offset somewhat by a cost reduction that we have. So the net impact will be more like 25 basis points. So that's how we expect to see net ticket sales and revenue unfolding on the go forward. And if I just add, in terms of your kind of initiatives, most meaningful, I think Pete's outlined a number as it relates to kind of revenue focused.
If I kind of think in the UK from an NTS perspective, like I briefly mentioned Digital Seasons, we think there's still. We've said before previously, it's a kind of slow burn initiative. It takes time for the industry to adopt, but we are encouraged by what we have seen there. And then more broadly, we talk about this idea of walk-up, i.e., customers who are walking into the station and buying kind of then and there. We think there's still real opportunity for us to win share in that particular market. So that's an area that we'll be pushing in the UK.
Perfect. Thank you. Then my second question, just on the margins. So obviously, the first half margins are sort of tracking slightly below the guidance. So if you could just talk a bit more about sort of what gives you confidence in that second half recovery. I guess sort of linked to the previous question on marketing spend.
Yeah. So we have some seasonality in our business, particularly where it relates to foreign travel. And we've invested behind that, as Jody outlined, in a variety of ways to nurture that growth. And this is both a good opportunity for net ticket sales growth, and it's at a higher monetization and which has its benefits as well. And of course, that's more seasonally driven by the summer months in Europe and therefore in H1. So as this plays out into H2, I'm not expecting to see such a significant marketing investment in that area.
That's what really gives me really good confidence that as we've increased guidance towards the top end, that we are going to hit the full year metrics that we've laid out today.
Perfect. Thank you.
Our next question comes from James Lockyer from Peel Hunt. Please go ahead.
Morning, guys. Thank you for taking my questions. Three from me, please. Firstly, just on slide 30, where you talk about the market shares across the across the different routes. I wonder if you could talk about some of the nuances there. Your share, your share, for example, in Barcelona and Valencia is the same, yet Barcelona has been liberalized for more months than Valencia. Should we, you know, obviously see once Valencia gets 27 months, is there a reason why it sort of got there quicker? It'd be good to understand some of the nuances and correlations between your share and, and you know, the numbers of liberalization and the months of the numbers of trains liberalized on that route.
The second question, I wonder if you could talk a bit more around the acquisition you made in the period. I understand that it's a geolocation software business. Be good to understand where that fits into your pipeline. And then final question around, it's good to see you're starting to support local payment methods, and our fintech team is always talking about how that helps reduce friction for customer acquisition. I was wondering if you could talk a bit more about your payment strategy there, how you're going to be supporting more local payments like you've done in Italy, and how that should improve conversion by reducing failures. Thanks.
James, thanks for the questions. I'll pick the first one up and then hand over to Pete on the second two. So yeah, with regard to slide 30 and our kind of relative share in the various routes in high-speed routes in Spain, this is really as you say, it's a function of the maturity of the route, and some of these, the smaller routes have obviously only been liberalized for a small number of months. I think to answer specifically your question as it relates to Barcelona versus Valencia from Madrid, I think that chart on the left-hand side that shows the percentage share of new entrants is helpful here.
Our share is significantly higher, for example, on iryo and OUIGO, than it would be on Renfe, because Renfe, if you like, is the incumbent, and people have been using that app and been doing that for a period of time. As they look elsewhere and decide they might want to try one of these alternative services, because of the very compelling price points at which they're at, they are more likely to use Trainline and come to us there, and therefore, Valencia has seen an overindex. It's kind of more aggressive and actually a very large share. I mean, you can see almost two-thirds of the share of that route is now on new challenger brands on that route. So I really think it's an index or a function of that.
It's kind of mix effect almost, playing through there. But what I would say is, we have seen this, and it's great because we actually have pretty good market, data in Spain in the same way we do in the U.K. We're able to track this in a way we aren't in some of the other markets. We're seeing that number, that 11%, move up pretty nicely and solidly, and we hope and aspire to bring that number higher in the coming months. And with that, I'll pass over to Pete to talk through Signalbox....
Great. Thanks, Jody. So yes, our Signalbox acquisition was a relatively small acquisition that we've made, but this really was on the back of identifying some real best-in-class rail geolocation software and capabilities that have been developed. At the heart of that, being able to identify what train someone is on is at times more challenging than you might imagine. I don't know, a particularly busy area like Clapham Junction, where there are a number of trains moving in parallel or in opposite directions, it can really get quite complex. And as we looked at this opportunity and developed a relationship with Toby, who's the founder, we recognized that the opportunity to buy here rather than to build out the capability ourselves was the smart decision.
So we've been delighted to invite Toby, the founder, into our family and as an employee. There are a number of exciting opportunities that lie ahead of us with regards to this technology and, you know, principally developing some of our pay-as-you-go R&D that we're doing at the moment. At its heart, requires us to be able to identify where someone is at any point in time. So that's kind of the principal use case that we're working around now. But there are all sorts of other opportunities that might lie ahead, where it comes to knowing what train someone's on. They might relate to fraud or to Delay Repay.
So there's all sorts of opportunity that lies ahead, and we're really pleased with this acquisition.
Yeah, just to kind of build a little bit, a further instance, because it seems like a good moment to talk about it. We actually... Supporting the customer on the journey is kind of core to what we do. It allows us to do things like being able to pass information to the transport police to know exactly the location of the customer, for example. And then, I pick up on the final question on local payment options. So yes, Satispay is a particular kind of Italian payment option, a strong one. We will continue to look at other payment options.
I think in most of the other markets, we feel like we've got really all of the principal ones covered, so it's not like there's a line of five or six more that we are needing to integrate. But of course, as we enter new markets or look at new markets, we'll look at if there's payment players that have a sort of significant share, we'll of course continue to integrate them.
Thank you so much.
Our next question comes from Katie Cousins, from Shore Capital. Please go ahead.
Thanks. Morning, guys. Just looking for your thoughts around France's plans to launch a EUR 49 rail pass, similar to the Deutschland-Ticket, and what the threats could be in that, a relatively lower priority region, but what was the threat of that expanding elsewhere and into other European countries? Thank you.
Sure. So yeah, like, I mean, just to kind of do the backstory here from the German, as you say, Deutschland-Ticket. So this is the EUR 49 ticket that launched following the EUR 9 ticket that was pretty successful in Germany through the summer. They then launched EUR 49. I think the reality of that ticket is that it's really, it's been used pretty widely. It's got large adoption, and it's very much in line with the kind of environmental lobby within Germany, and tends to be used by commuters who are effectively getting a fairly significant discount on their commute into the sort of various large German cities.
And then that's been picked up and kind of at the senior levels in the French political kind of rail establishment, talked about now something similar, whether it would be a EUR 49 ticket or another price point, but some kind of subscription like regional, and I think that's quite critical, regional and potentially intercity, but not high speed, ticket, which. But I think the aspiration is to launch that by the summer. Now, we took the decision in Germany not to launch the EUR 49 ticket because Germany is, was a market we have continued to sort of deprioritize, awaiting a kind of sensible commission level in that market.
It would be very different in France, really, because we, as you know, have a good base of French customers, and we actually think this would be a real opportunity for us. It clearly does create some risk around the regional tickets that we sell there already, but we think equally there's real opportunity there because we think we'd be able to retail this well, we'd be able to integrate it within our app, and there's actually opportunity to win new customers and currently create a kind of customer acquisition strategy for ultimately high speed, which, as you know, is really where we make the lion's share of our profits and revenue in all the markets that we operate in. We are connected, in touch with the French authorities.
I think as it stands at the moment, it's not a clearly defined proposition. There's quite a lot of work for the French authorities to do, but we are in conversations around that. And as that kind of comes to pass, and we understand, we will engage and obviously over time, let the others know what we're doing there. But we would aspire to launch something should it come to pass in France.
Brilliant. Thank you.
Our next question is from Gareth Davies, from Numis. Please go ahead.
Yeah. Hi, morning, guys. A couple from me. The first one, can you talk a little bit around competition in Europe? I think at the time of IPO, Omio was the only real kind of notable player beyond the incumbents. I'm just wondering, have you seen any change in terms of the competitive landscape as you're having success in markets like Italy and Spain, either at a local level or across Europe? And then the second one, in terms of... I mean, it's feeling ever more likely we're going to get a Labour government... Can you just talk through from your perspective, is there anything you can kind of proactively do to help smooth the transition to a new government, if that is how it plays out?
Just your thoughts there and how you're working with the Labour Party. Thank you.
Sure. Starting with the first one, competition in Europe. I would say, in any of those European markets, our principal competition still remains, the carrier, the incumbent carrier, which, you know, as you know, would be SNCF in France or Trenitalia in Italy and so forth. In terms of the apps that they have developed, and kind of helping customers make the call to make the change and try something new and ultimately show the value and the UX that Trainline offers.
And, you know, aggregation, and putting together, you know, whether it's two, three, or four different services, is a very compelling use case, for doing that, and that's the reason we're seeing, the strong growth and success in Italy, and indeed in, in, in Spain. When we look elsewhere, there really is no other player that we look at with any degree of concern in terms of, kind of, a share that is anywhere close to the share we've had. We've been able to be on the front foot, invest heavily in marketing, as you know, in, also in the kind of product and UX and, and then be able to integrate all of the different players. So we are, you know, really pleased with our competitive position, in Europe.
As it relates to a Labour government, obviously, you know, don't want to speculate too much about where that might go, and I think, well, how I should think about this, we are of course engaged with the sort of senior members of all parties as it relates to rail. I think at the moment it's been more a period of, let's call it, headlines rather than policy, but I do think Labour now is taking the time to engage around rail, and we're obviously engaged with them around that and to develop their policy. And I expect over the coming months, we will see more from them.
I think you know as it relates to what we are hearing and seeing, I think the things that are encouraging is a real focus on customer and a desire to make sure whatever kind of comes out in rail works for customer, which is something we would obviously be very aligned with. And I think the other thing which we've found very helpful is actually a kind of openness around the open access players such as Lumo and Hull Trains and Grand Central. And I think that's encouraging. As you know, there's been an approval for a Grand Union to go out from London to Bristol and ultimately Cardiff, and we think this is a really encouraging trend more broadly.
And now with the Evolyn, the proposed or planned London to Paris route, we see more competition coming through. And from what we hear, early days, the Labour government seems to be supportive of that, and we think that's a really good thing, and obviously that means that the customers need help to find the best prices, and we will be there for them. And then look more broadly, how do we think about this? Whatever government is in, we think over the last sort of three years, we've established a series of principles and sort of tested them around this idea of principles of kind of a level playing field, and ensuring kind of fair competition, as it relates to retail.
We feel really good about those, and they—that's kind of how we operate. I think both parties, whenever we hear them talk, they're really focused on the actual rail carriers themselves, rather than retail. If I'm honest, most times we speak to these the senior politicians, they are Trainline users, or certainly their family are, and they understand the benefits, and they get it.
Thank you very much. Just one other one. You talked about the extension of five white-label contracts. Are there any kind of new tenders of note that are out there or anything you can raise in terms of new business?
So I'd say we're entering a kind of new phase, I think, where we do expect to see more kind of tendering, re-tendering of contracts on white label, just broadly. Some of the ones that we have and some of the ones that we don't have. And I think this just reflects a kind of freeing up, a kind of unlock post-COVID, the new establishment of the new franchises and the talks beginning to kind of look beyond the next six months to maybe the next three years or seven years, depending on their contract. So whilst there's no specifics I'll share today, I do think that we're going to see more tenders out there in the coming kind of, let's say, 12 months.
Fantastic. Thank you.
Our next question is from Andrew Ross of Barclays. Please go ahead.
Great. Morning, everyone. I've got two more left. There's already been a lot of good ones. First one is about Trainline Solutions. We wonder if you can give us a bit more color in terms of the different bits that are comprised within that. So a sense of where the business piece is getting to, what's going on in the white label piece, and then I guess the probably quite impressive growth in international. But if you could give us any more color in terms of the mix, that would be quite helpful. And then the second one is to follow up on James' question on slide 30, on your share in some of those newer routes in Spain, which is a very helpful slide, so thank you.
It sounded from what Pete was saying, that the 11% you're at in the most mature lines continues to increase. But can you give us a sense of the fact now starting to flatten out, or is it still kind of linear? And what can you give us to help us think about what kind of share you could ultimately get to? Like, how are you thinking about that when we try to size how big the opportunity could be for you over time?
... Sure. Why don't I start with that, that Spanish one, and then we'll pick up on the Trainline Solutions? So look, I'd say that growth is linear. Like, we don't see any kind of flattening out anytime soon. In terms of-- I think you-- the way probably I think about kind of modeling this and then thinking it through is, of those challenger brands, with many of them, and if I can take a European view of this rather than just Spain, we would be 20%, 25%, potentially 30%, and sometimes 30% north of the tickets that they are selling, like, would be sold through Trainline. And so I think that gives you a sense of the opportunity and our aspiration.
And what we've seen on those routes that have been around longer across Europe is that as we, kind of as customers try us out on the new challenger brands, they then begin to use us on the incumbent, but that process kind of takes time to work through. So over time, it kind of chips up on, on both sides. And so when we talk about aspirations, the way I talk to the teams, I, I want to be in a position where we're, we're north of 20% share, and, and when we get there, we'll, we'll no doubt raise our, our, our, our eyes and look to, to be doing something, higher than that.
But that's the kind of goal we have for ourselves at the moment, and obviously, as the other three routes that you see here continue to go. And more importantly, there's still... This is kind of reflects Q2 data. As we see more come through, you will see that Alicante, Seville, and Malaga continue to grow as well. And then it relates to the Trainline Solutions. I'll let Pete pick up on just kind of the high-level themes that we're seeing there.
Yeah, thanks, Andrew. So look, we've had a really good result in H1 with net ticket sales up 38%, and this was somewhat kind of inflated from a lower base. So but nonetheless, it's good performance, and Jody's outlined kind of what's happening in the white label part of the market. So we've had extension on some of those contracts, and that gives us some good visibility ahead. But and we do expect there to be some tenders emerging, which will kind of play out for the, for the years beyond that. And then the part that we haven't spoken so much about is the business travel, and that we've seen business travel recover to around the kind of 45% level of pre-COVID sales.
This is kind of relatively normalized at this point. We're not, I'm not expecting it to take further step-ups by leaps and bounds. That said, we do see the tailwinds for this part of the business, particularly as, you know, carbon reporting becomes more prevalent and companies are going to need to think about how people are moving around, how their employees are moving around. And so that shift from, you know, flights and onto rail is likely to persist over the next decade or so.
With that in mind, we're seeing opportunities to leverage our global API and to sign up and start to see revenues flow from travel management companies who are looking to put rail into the portfolio and take advantage of some of these tailwinds that exist. We're having some good conversations about how we expand into Europe. We already have a strong set of relationships in the U.K., and those conversations are progressing well.
The tech takes a bit of time to implement, so the way I think about this is that it is a good slow burn opportunity for us that we will continue to see the benefits of over the next three years or so.
Perfect. Thank you.
Our next question is from Ciarán Donnelly from Berenberg. Please go ahead.
Thanks, guys, and thanks for taking the questions. A few left from me. One, could you just give us a sense of, I guess, the enhanced monetization in the UK consumer business? If we think in old money of kind of 5% and 3% getting to 8% take rate, could we see take rate in kind of the 9% range, in the future as they kind of mature? Secondly, just on the U.K., can you talk about Pay as you Go and any developments on that side? And then just on international consumer, one, I guess, can you just clarify that you don't see any reason why, over the longer term, take rate in the international consumer business can't reflect the UK consumer business?
And then finally, just on international consumer, on the liberalized routes, do you tend to see volume goes up as they liberalize? Thanks.
Sure. I'll kick off the two and four, and then pass over to Pete on the monetization one. So, firstly, UK Pay as you Go developments. Look, this is a space we've talked about before, and I think we've flagged and talked about the overall expansion in the U.K., which is taking the London sort of tap-and-go zone and expanding it out to Cambridge, Bedford, and sort of round and down to Brighton. The first phase of that will go live in the next couple of months, which we've said is Pete reminded GBP 150 million in sort of sales at risk there. I think the...
As we've kind of noted before, what this doesn't do, I mean, it works for commuters coming into London, but it's not good if you're traveling with a family. It doesn't really support rail cards, and it gives you a pretty weak sense of control of that spend. If you take somewhere like Cambridge, we're up to, like, about sort of GBP 50 return, where you're tapping in and tapping out. Actually, on many of these further routes, increasingly, there's more chance that something like SplitSave or indeed advanced purchase would be better and cheaper if you were buying on Trainline. Then I think that in terms of development, I think this pay-as-you-go idea, more of an app-based system, is something we said we were kind of researching and moving into development.
Actually, just in the last sort of week or so, we've now moved to a, I don't want to overemphasize this, but a very small trial around pay-as-you-go, allowing us to actually, using some of the location technology Pete talked about earlier, allowing us to sort of track you as you open it on your app, and tell you, well, how much would that cost? And then as you get off, to kind of click or automatically know what the cost was of that journey. And that's, we think, a potential technology for the future. I think the government has previously talked about rolling out pay-as-you-go more broadly in the country. We think this is one of the technologies that could offer an answer, and we've been investing to kind of work through on that.
I do think this is more like a 3-5-year thing than anything that's going to jump out next year. And I'd say when we look across to Europe, we do see some trials going on there as well. SNCF has one in Nouvelle-Aquitaine, and there are some sort of trials going on in Germany. So we think it's a potential kind of, I would say, specifically regional type solution that we want to investigate and continue to invest in going forward. And then if I pick up on question 4 there as it relates to liberalized routes, absolutely, we see volumes increase, and I think there's various sort of test cases, many of them kind of live right now, but it's not crazy to be thinking about volumes in the sort of 30%-40% increases.
Ultimately, they cannibalize road and air, and it kind of depends a bit on the route, but I think Madrid to Barcelona is a good example where there's a lot of people who are using road because they perceived it as better value. And that's now moving to and coach actually moving to rail. Equally, there's been business customers who've wanted to use air, but now, given the speed of high-speed and the competition and frequency of service, they've chosen to move to rail. And I would expect, like, for example, if you see competition on London, Paris, I'd expect there to be more frequency of service and lower prices, and therefore you'll see more cannibalization of that route.
We'd be really encouraged to see more routes open up to competition in the U.K., with the right political support. Then, Pete, shall I pass to you on monetization?
Yeah, sure. So, your first question about monetization in the U.K., and you referenced the kind of the 3 and the 5, if you like. So, the 5, as I said, will drop to 4.5 in 18 months' time, and there'll be some cost forgiveness, so the full impact won't drop through to EBITDA. Then really, what remains is around what we do with the 3, and we have some natural headwinds with the 3, where we are seeing a stronger growth on the day where the monetization is harder. And then we have the tailwinds, where we have opportunity to nurture new revenue streams.
And then net of all of that, you were asking the question, you know, can we get to 9% take rate or so? And the way I think about this is we're still focused on growing net ticket sales, principally, and there's still good opportunity here, both in the headroom that we see with e-tickets, and as Jody outlined earlier, more pervasively with the commutes and with season tickets. So that's the kind of fundamental driver of revenue. And so we will nurture these opportunities from a take rate perspective. But in short, I don't expect us to reach a level of 9% in the next one to two years.
And then you also asked a question about how international take rate might unfold and how that relates to the UK, and you've got a similar answer here. So again, we're mostly focused on driving growth and net ticket sales. And of course, to some extent, certain monetization streams could get in the way of the marketing investments that we make, and that we're very conscious of not wanting to dilute those efforts at the wrong moment. And so we're mindfully introducing new revenue streams in that place, and some of them are working well. And we talked about Booking.com and the relationship we have there, and that has been additive to the revenue mix without having a material impact on the net ticket sales growth.
So these are great examples, and as we discover more of those, you can expect us to chase them. But principally, we're focused on Net Ticket Sales. And over the longer run, we do expect Take Rate to increase over time, but we will do that mindfully, and balancing it with growth.
Thanks, Pete. I think that's probably the time. We've run up to time there. Thank you very much for the questions and for joining today. As Pete and I have said, we've delivered a strong financial performance in the first half of the year, and we've tightened our guidance range for the remainder of the year. We're making significant progress against our strategic priorities, both in the U.K. and international, and we remain fully positive and energized about the growth opportunities ahead. Thank you.