Sostravel.com

Highlights:

• Arrowhead is updating coverage on SosTravel.com with a fair value bracket of EUR 2.0 to EUR 2.5 (share price on November 15, 2022: EUR 0.89) based on blended valuation using Discounted Cash Flow (DCF) method (60% weightage) and Comparable Company Analysis method (40% weightage)
• SosTravel.com S.p.A., headquartered in Italy, is a digital travel company that operates in the global travel and tourism industry. The company was founded in 2017 as a spin-off from TraWell Co. (previously Safe Bag). It has a presence in 23 airports, where it markets its services
• The company aims to seize the significant opportunities offered by mobile technology in a highly fragmented air passenger services market, with no major player offering an integrated solution to meet the key needs of air passengers
• The company’s target is to build a one-stop digital platform that provides travel services for passengers using various modes of transportation, i.e., air, rail, road and sea
• To build a super app, the company recently merged with Digital Destination Company S.r.l. (“DDC”), which is an Italian start-up company with a strong expertise in digital marketing for traveling and has an established booking platform
• The company plans to capture new users and cross-sell its proprietary value-added services, powered by its strategic merger with DDC, which will attract potential customers with low-margin services, and bookings and offer high-margin services through the app, focusing on the Leisure Travel segment, thereby giving a new direction to the company’s business and services in the future
• The company plans to expand the commercial partner to expand its service portfolio, which is in line with the company’s strategy of setting off a network effect where more services would attract more clients, which, in turn, would attract more commercial partners and make the company’s marketplace more vibrant
• The company recently announced the appointment of Mr. Carmine Colella as Chief Executive Officer. He has over 20 years of experience in the Travel and Tourism industry
• The company had a revenue base of EUR 1.3 mn in FY 2021, up 44.4% on a year-on-year (YoY) basis. However, the merger with DDC will further add EUR 10.8 mn to its top-line for 2021. As on June 30, 2022, c. 1.22 mn users worldwide used SOS as a digital travel companion
• In 2018, the company was listed on the Euronext Growth Milan Stock Exchange through an initial public offering (IPO), raising EUR 5.2 mn in the process.

This is an executive summary on Italy-based travel-app company Sostravel.com from Investor Relations Director Edoardo Zarghetta, who will run you through Sostravel’s Slide deck.

Highlights:

• Revenues from sales amounted to 263 thousand Euro, in line with respect to the figure of 30 June 2021 which was equal to 268 thousand Euro
• EBITDA was equal to -304 thousand Euro, a decrease compared to the figure of 30 June 2021 equal to -25 thousand Euro; this was mainly due to the lower amount of grants obtained in 2022 compared to the first half of 2021
• EBIT was equal to – 549 thousand Euro, an improvement compared to the figure as of 30 June 2021 equal to – 693 thousand Euro; this was due to the lower amortization/depreciation which accrued in the current half-year
• NEGATIVE Net INCOME of -566 thousand Euro (which for precautionary purposes does not include prepaid taxes)
• Net financial debt (NFP) was positive (Cash) and equal to 638 thousand Euro, a decrease compared to the same figure as of 31 December 2021 which was equal to 1,320 thousand Euro

• Arrowhead is updating its coverage on SosTravel.com S.p.A. (“SosTravel” or the “Company”) with a fair value bracket of EUR 1.76 – EUR 2.16 (Share Price on July 5, 2022: EUR 0.94) based on Discounted Cash Flow Valuation and Company Comparable Valuation
• SosTravel operates two digital platforms, SosTravel and FLIO, that act as marketplaces for travel bookings and peripheral travel services
• The Company recently added travel services such as bookings for transport, accommodation, and attractions to the SosTravel platform. These services include lost luggage concierge, flight tracking, travel insurance, flight compensation, and access to airport & airline information
• Since 2019, the Company has completed two significant acquisitions – FLIO and DDC. DDC provides travel booking services and the Company has merged DDC’s services into its platform. DDC is a landmark acquisition for SosTravel and the Company expects it to contribute 80% of its annual revenues going forward
• FLIO operates as an independent platform from SosTravel. The acquisition of FLIO has enabled the Company to expand its geographical presence and increase its user base
• The Company is working on several new features for its SosTravel platform, including developing a Travel Plan feature in its platform which will enable users to plan their itinerary within the platform, and add accommodations, attractions, and transport as and when needed
• SosTravel is likely to benefit from long-term tailwinds for the Travel & Tourism industry, including a growing middle-class in emerging markets, higher disposable income among young- and middle-aged people, growing preference for travel instead of excessive accumulation of hard assets, and the abundance of affordable travel and lodging options

• 1M+Verified Users
• 935K Trips Completed
• 220K Monthly Users (Pre COVID)
• 223 Countries Visited
• 2.5M+ App Downloads
• $17M Cumulative Revenues

• Arrowhead is initiating its coverage on SosTravel.com S.p.A. (“SosTravel” or “the Company”) with a fair value bracket of EUR 1.28 – EUR 1.56 (Share Price on Dec 03, 2021: EUR 1.06) based on Discounted Cash Flow Valuation and Company Comparable Valuation
• SosTravel.com S.p.A. (“SosTravel” or “the Company”) operates two digital platforms – SosTravel and FLIO (acquired in July 2019) – that act as marketplaces for peripheral travel services specifically focused on air travelers. The Company’s ultimate aim is to build a one-stop digital platform that provides travel services for passengers using various modes of transportation i.e. air, rail, bus, and sea
• SosTravel’s key services are Lost Luggage Concierge, Travel Insurance, Telemedicine, Flight Tracking, Airport & Airline Information, Flight Compensation, and Aviation Services
• SosTravel’s primary service is the Lost Luggage Concierge, which it offers in partnership with TraWell Co. Lost Luggage concierge helps customers track their luggage and get compensation in case of delays. The Company’s agreement with TraWell Co also allows it to leverage TraWell Co’s infrastructure present at airports as a sales funnel to direct prospects to the SosTravel website
• SosTravel signed an exclusive 5-year contract with Health Point Plus Inc. in 2020 to offer Telemedicine services (“Dr. Travel”) through the SosTravel platform.
• The Company plans to start major expansion initiatives imminently with a special focus on the US ecommerce space since US is the world’s largest aviation market. The Company has prepared a detailed roadmap for this expansion
• SosTravel, like most other travel businesses, was significantly impacted by the Covid-related travel restrictions. Recovery can be seen for SosTravel and other companies in the travel industry with the travel restrictions easing gradually since mid-2021 due to an improving Covid situation. We expect SosTravel to achieve strong revenue growth in the coming quarters if the Covid situation remains under control and there are no further travel restrictions due to the emergence of new variants of Covid

• Total Revenues were equal to 728 thousand Euro, an improvement of 40.9% compared to the figure of 30 June 2020 which was equal to 517 thousand Euro due to the attainment of approximately 357 thousand Euro in grants
• EBITDA was equal to -25 thousand Euro, a strong improvement compared to the figure of 30 June 2020 of -522 thousand Euro due to the strong decrease in management costs (including personnel at -39.6%) and the attainment of the aforementioned grants
• EBIT was equal to – 693 thousand Euro, an improvement compared to the figure as of 30 June 2020 equal to – 1,086 thousand Euro despite allocations for risks equal to approximately 202 thousand Euro
• Net INCOME of -714 thousand Euro (which does not include prepaid taxes)
• Positive NFP (cash) was equal to 1,715 thousand Euro, an improvement compared to the same figure as of 31 December 2020 and equal to 456 thousand Euro

• sostravel is created as a spin-off of Safe Bag to seize the significant opportunities offered by the mobile technology in the Global travel market
• In 1 October 2018, sostravel app is released in soft launch
• Offer all solutions to travelers’ needs
• sostravel.com is listed on the Piazza Affari on the AIM Italia segment
• Launch and promotion on the mobile stores (including Google Play and App Store)
• sostravel app is proposed as an “aggregator” of services to facilitate the traveler’s journey, before, during and after his trip