WEB Travel Group (WEB) Investor Update summary

Background and process

• A change in accounting standard from AASB 137 to AASB 9 for supplier payments was required after auditor review and enhanced SAP system insights, leading to a trading halt and voluntary suspension to reassess financials.

• The adjustment process involved restating accounts retrospectively, impacting prior periods and requiring detailed review of payables and retained earnings.

Financial impacts

• The new accounting approach results in a $2.5 million increase in revenue and EBITDA for H1 FY25, and a $1.5 million reduction in EBITDA for FY24.

• Retained earnings as of March 31, 2023, decrease by approximately $32 million, with a corresponding increase in trade and other payables as of September 30, 2024.

• All restatements are non-cash in nature and do not affect cash flow or the underlying business economics.

• The impact on margins is negligible, with changes amounting to about 10 basis points for the half and 3 basis points for the year.

Accounting methodology and industry context

• The error rate between accrued and invoiced supplier payments is common in the industry, driven by dynamic pricing and invoice timing.

• Under AASB 9, recognition of liabilities is based on whether amounts are paid, canceled, or expired, typically using a rolling six-month review.

• The adjustment grossed up payables and rolled back through retained earnings, with the cumulative impact covering several years but focused on the period from March 2023 to September 2024.