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

Viad Corp's investor presentation outlines its strategy for growth, focusing on its leading positions in exhibition services and iconic attractions, with a target of significant EBITDA growth.

Summary

• Viad Corp presented an investor presentation on May 23, 2024, highlighting its two main business segments: Exhibition Services (GES) and Iconic Attractions & Hospitality (Pursuit).
• The company aims to maximize shareholder value through strategic capital allocation, focusing on high-return growth opportunities.
• Viad reported $137.2 million in liquidity and a 2.7x net leverage ratio as of March 31, 2024, with a target net leverage ratio range of 2.5x-3.5x.
• Pursuit, the attractions and hospitality segment, is targeting to triple its adjusted EBITDA from 2015 to 2024.
• GES, the exhibition services segment, is focused on improving profitability and cash flow through strategic initiatives.
• The company anticipates strong profitable growth in 2024 and beyond, driven by demand for both exhibition services and unique travel experiences.
• GES expects 2025 revenue to be in line with 2024 with margins of 8%+, driven by price increases of 3.5%-6%, NSF growth of ~5%, and net new client wins of ~$25M+.
• Pursuit's lodging booking pace indicates continued growth in 2024, with US lodging room revenue on the books up 22% and Canadian lodging room revenue up 7% as of May 15, 2024 compared to the same time last year.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong growth targets, a focus on high-return investments, and a clear strategy for both business segments. The company's financial position is solid, and the management team is experienced. However, there are some risks associated with economic uncertainty and seasonality.

Positives

• Viad has high-quality businesses with leading and defensible market positions.
• The company has a proven track record of executing its growth strategy and driving strong returns.
• Pursuit's iconic attractions and hospitality business has high margins and strong perennial demand.
• GES has a strong recurring revenue base and a diverse client base.
• The company has a strong balance sheet with significant liquidity.
• Viad is well-positioned to benefit from the recovery in the travel and events industries.
• Pursuit's lodging booking pace indicates continued growth in 2024.
• GES is driving higher revenue per net square foot of event space through disciplined pricing and compelling exhibitor offerings.
• Spiro is growing its client roster and selling additional services to existing clients.

Negatives

• The company's businesses are subject to seasonality, with Pursuit experiencing 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.
• The company is exposed to risks related to general economic uncertainty, travel industry disruptions, and cybersecurity attacks.
• Viad is exposed to labor cost increases and work stoppages related to unionized employees.
• The company has multi-employer pension plan funding obligations.

Risks

• General economic uncertainty in key global markets and a worsening of global economic conditions could negatively impact the company.
• Travel industry disruptions could affect the demand for Pursuit's attractions and hospitality offerings.
• The company's level of indebtedness and financial covenants could limit its operational and financial flexibility.
• Unanticipated delays and cost overruns of capital projects could impact the company's ability to achieve its financial and strategic goals.
• The company is exposed to cybersecurity attacks and threats.
• Fluctuations in currency exchange rates could impact the company's financial results.
• The company is exposed to liabilities relating to prior and discontinued operations.
• Compliance with laws governing the storage, collection, handling, and transfer of personal data could lead to legal claims and fines for data breaches or improper handling of such data.

Future Outlook

Viad anticipates strong profitable growth in 2024 and beyond, driven by demand for both exhibition services and unique travel experiences. GES expects 2025 revenue to be in line with 2024 with margins of 8%+. Pursuit is targeting to triple its adjusted EBITDA from 2015 to 2024.

Management Comments

• Viad's mission is to drive significant and sustainable growth by delivering extraordinary experiences for its teams, clients, and guests.
• The company prioritizes being strong stewards of its capital to maximize shareholder value using a balanced approach.
• Management believes that the presentation of Adjusted EBITDA provides useful information to investors regarding Viad's results of operations for trending, analyzing and benchmarking the performance and value of Viad's business.

Industry Context

The presentation highlights Viad's position in the recovering travel and events industries, with a focus on unique experiences and high-margin businesses. The company is leveraging the trend towards authentic and immersive travel experiences and the increasing demand for in-person events.

Comparison to Industry Standards

• Viad's Pursuit segment competes with other operators of iconic attractions and hospitality experiences, such as Vail Resorts in the ski resort industry and Xanterra Travel Collection in the national park lodging sector. Pursuit's focus on unique, high-margin experiences in iconic locations positions it well against these competitors.
• GES competes with other large exhibition service providers like Freeman and Informa Markets. GES's focus on long-term client contracts and high retention rates is a key differentiator in this competitive market.
• The company's target of tripling Pursuit's EBITDA from 2015 to 2024 is an ambitious goal, but it is supported by the strong demand for its experiences and its strategic growth initiatives.
• GES's target of 8%+ EBITDA margins in 2025 is in line with industry standards for large exhibition service providers.

Management Changes

Stakeholder Impact

• Shareholders are expected to benefit from the company's focus on growth and shareholder value.
• Employees will benefit from the company's commitment to diversity, equity, and inclusion, as well as workplace safety.
• Customers will benefit from the company's focus on delivering extraordinary experiences.
• Suppliers and creditors will benefit from the company's strong financial position.

Next Steps

• Viad will continue to invest in high-return growth opportunities to scale its Pursuit business.
• GES will focus on greater penetration of higher margin services and amplify growth in attractive new geographic markets.
• The company will continue to evaluate options to maximize shareholder value.

Key Dates

Keywords

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