8-K: Viad Corp Investor Presentation Highlights Growth Strategy and Market Leadership

Viad Corp's investor presentation outlines its growth strategy, focusing on high-quality businesses and strong market positions in exhibition services and iconic attractions.

Summary

• Viad Corp presented an investor presentation on September 12, 2024, highlighting its two main business segments: GES (Exhibition Services & Experiential Marketing) and Pursuit (Iconic Attractions & Hospitality).
• The company aims to drive growth by delivering extraordinary experiences for teams, clients, and guests.
• Pursuit focuses on owning and operating experiences in iconic destinations with high margins and strong demand, with a strategy of 'Refresh, Build, Buy' to expand its portfolio.
• GES is a leading global provider of exhibition and experiential marketing services, with a focus on higher-margin services and strategic initiatives to improve profitability.
• Viad's capital allocation strategy prioritizes investments with a minimum 15% internal rate of return (IRR) and aims to maintain a net leverage ratio between 2.5x and 3.5x.
• The company reported $138.8 million in liquidity and a 2.4x net leverage ratio as of June 30, 2024.
• Viad anticipates a reduction of $20 million to $25 million in Adjusted EBITDA due to the Jasper Wildfire Complex, but both Pursuit and GES are tracking towards their full-year guidance ranges.
• Pursuit's revenue has more than tripled from 2015 to 2023, with significant growth in both attractions and hospitality.
• GES is expected to achieve an EBITDA margin of 8% or higher in 2024, with 2025 revenue expected to be in line with 2024.
• GES has a clear line of sight to $900M+ annual recurring revenue with 90%+ retention of clients with >$500K revenue.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong growth strategies, high-quality businesses, and a focus on shareholder value. While there are some challenges, such as the Jasper wildfire impact, the overall tone is optimistic and forward-looking.

Positives

• Viad has high-quality businesses with leading market positions.
• The company has a proven track record of executing its growth strategy and driving strong returns.
• Pursuit's 'Refresh, Build, Buy' strategy has delivered significant revenue growth.
• GES is focused on improving profitability through strategic initiatives.
• Viad has a strong balance sheet with significant liquidity.
• Pursuit has a robust pipeline of investment opportunities to accelerate growth.
• GES has high recurring revenue and strong client retention rates.
• Both Pursuit and GES are experiencing strong demand for their services.
• Pursuit's lodging booking pace indicates continued growth.
• GES is expected to achieve an EBITDA margin of 8% or higher in 2024.

Negatives

• The Jasper Wildfire is expected to have a negative impact on 2024 Adjusted EBITDA, reducing it by $20 million to $25 million.
• Pursuit's Maligne Lake Cruise will remain closed until 2025 due to Parks Canada road safety measures.
• The company's businesses are subject to seasonality, with peak activity during the summer months.
• GES's revenue can vary significantly from quarter to quarter and year to year depending on the frequency and timing of shows.

Risks

• General economic uncertainty and worsening global economic conditions could impact the company's performance.
• Travel industry disruptions could negatively affect Pursuit's business.
• The company's level of indebtedness and financial covenants could limit operational and financial flexibility.
• Unanticipated delays and cost overruns of capital projects could impact financial results.
• The company is dependent on key members of its account teams and could be affected by the loss of key personnel.
• The competitive nature of the industries in which Viad operates could impact its market share.
• Adverse effects of show rotation on periodic results and operating margins could affect GES.
• Transportation disruptions and increases in transportation costs could impact the company's operations.
• Natural disasters, weather conditions, accidents, and other catastrophic events could disrupt business operations.
• Exposure to labor cost increases and work stoppages related to unionized employees could impact profitability.
• Multi-employer pension plan funding obligations could create financial liabilities.
• Cybersecurity attacks and threats could disrupt operations and lead to financial losses.
• Currency exchange rate fluctuations could impact financial results.
• Liabilities relating to prior and discontinued operations could create financial burdens.
• Compliance with laws governing the storage, collection, handling, and transfer of personal data could lead to legal claims and fines.

Future Outlook

Viad expects strong profitable growth in 2024 and beyond, with Pursuit and GES tracking towards their full-year guidance ranges. GES expects 2025 revenue to be in line with 2024 with margins of 8%+. Pursuit believes in the strong recovery of Jasper National Park in 2025.

Management Comments

• Viad's mission is to drive significant and sustainable growth by delivering extraordinary experiences for teams, clients, and guests.
• The company prioritizes being strong stewards of capital to maximize shareholder value.
• Management believes that collecting memories is far more important than collecting things.
• Viad is committed to delivering extraordinary experiences that support a more sustainable world for generations to come.

Industry Context

The presentation highlights Viad's position in the exhibition and experiential marketing sector, which is a $128 billion market. The company is also benefiting from the recovery of the travel industry and increased demand for in-person events. The company is also benefiting from the recovery of the travel industry and increased demand for in-person events.

Comparison to Industry Standards

• Viad's GES business competes with other large exhibition service providers such as Freeman and Nimlok, but differentiates itself with its global scale and full suite of value-added services.
• Pursuit's strategy of acquiring and developing iconic attractions is similar to other experiential travel companies like Vail Resorts or Xanterra Travel Collection, but focuses on unique locations with high barriers to entry.
• The company's target of a 15%+ IRR for growth investments is a common benchmark for companies in the hospitality and leisure industries.
• The 8%+ EBITDA margin target for GES is competitive with industry standards for exhibition service providers.
• The 90%+ client retention rate for GES is a strong indicator of customer satisfaction and loyalty, which is a key metric in the service industry.

Stakeholder Impact

• Shareholders are expected to benefit from the company's growth strategy and focus on shareholder value.
• Employees are expected to benefit from the company's commitment to diversity, equity, and inclusion, as well as workplace safety.
• Customers are expected to benefit from the company's focus on delivering extraordinary experiences.
• Suppliers are expected to benefit from the company's continued growth and expansion.
• Creditors are expected to benefit from the company's strong balance sheet and focus on maintaining a healthy leverage ratio.

Next Steps

• Pursuit will continue to pursue its 'Refresh, Build, Buy' strategy to expand its portfolio of iconic attractions.
• GES will continue to focus on higher-margin services and strategic initiatives to improve profitability.
• The company will continue to evaluate options to maximize shareholder value.
• Viad will continue to invest in high-return growth opportunities.

Key Dates

Keywords

Exhibition Services, Experiential Marketing, Iconic Attractions, Hospitality, Growth Strategy, Adjusted EBITDA, Capital Allocation, Pursuit, GES, Travel, Events, Investments