ANA Holdings Inc. Financial Results FY2013 First Quarter. Shinichiro Ito. Kiyoshi Tonomoto. July 30, President and CEO

Transcription

1 ANA Holdings Inc. Financial Results FY2013 First Quarter Shinichiro Ito President and CEO Kiyoshi Tonomoto Senior Executive Vice President and CFO July 30, 2013 ANA2013 1

2 Contents Ⅰ. FY2013 Financial Results First Quarter and update of Corporate Strategy New Disclosure Segments Financial Results FY2013 First Quarter - Highlights LCC Business Strategy Strategic Investment P.4 P.5 P.6 P.7 Ⅲ. Amendments to Disclosure Segments Earnings Forecast by Segment Air Transportation Business Operating Revenues and Expenses Change in Operating Income P.28 P.29 P.30 Ⅱ. FY2013 Financial Results First Quarter Details Ⅳ. Supplemental Reference Fuel and Exchange Rate P.33 Highlights FY2013 First Quarter P.10 Impact of Foreign Exchange Rates P.34 in FY2013 First Quarter Consolidated Financial Summary International Passengers Results P.35 Income Statements P.11 Consolidated Financial Position P.12 by Destination Consolidated Statements of Cash Flow P.13 International Cargo Results P.36 Results by Segment P.14 by Destination Air Transportation Business Aircraft in Service P.37 Operating Revenues and Expenses P.15 Changes in Operating Income P.16 Passenger Operations P Cargo Operations P Other Segments excluding Air Transportation Business P.25 ANA2013 2

3 Ⅰ. FY2013 Financial Results First Quarter and update of Corporate Strategy ANA2013 3

4 New Disclosure Segments As a holdings company, we will pursue optimal allocation of management resources and build a business portfolio Air Transportation New Disclosure Segments from FY2013 ANA Holdings(Aircraft and significant assets) Airlines (former air transportation business) 4 consolidated subsidiaries/2 equity method subsidiaries JAPAN (Provisional ) Full Service Carrier Future Direction Promotion of of multi-brand strategy Division of of brand in in air transportation segment (Provisional ) Low Cost Carrier Airline Related Airport Handling/ Maintenance/ Cargo Logistics/ IT (former air transportation business and others) 30 consolidated subsidiaries/3 equity method subsidiaries Travel Services Trade and Retail ANA2013 Travel Agent (former travel services) 5 consolidated subsidiaries 1 equity method subsidiary Trading/ Product Sales (former others) 10 consolidated subsidiaries Others 8 consolidated subsidiaries/ 12 equity method subsidiaries 4

5 Financial Results FY2013 First Quarter - Highlights Although we recorded an operating loss for 1Q, the environment improved i from 2Q onward,, moving on to a high demand season Operating Revenues % Air Transportation % Operating Income Air Transportation Recurring Income Net Income FY2013 First Quarter Results ( billion) 1Q/FY Diff. vs. 1Q/FY Change EBITDA Key Points of Q1 Financial Results and Future Forecast Increase in fuel expenses due to JPY depreciation + JPY15.7bn vs.1q/fy12, incl. +9.0bn of currency impact Suspension of B787 operation - JPY 8.0bn of revenue decline Resumption of operation and delivery Slowdown of demand recovery for China routes Number of passengers -23% in 1Q result vs. FY12 Improve to -10% in 2Q forecast Decline in AirAsia Japan earnings Dissolution of joint venture business and ANA takes an initiative to recover for earnings performance FY Op. Income ( billion) 2Q Q 3Q Q 5.8 Full Year 97.0 FY Op. Income 1Q Q Q 3Q ( billion) Full Year ANA2013 5

6 LCC Business Strategy Under the initiative of ANA, rebuild a LCC business model that fits f the Japanese market Apr - Jun, 2013 Jul - Oct, 2013 Nov (Resumption of operation from Dec) AirAsia Japan New LCC Brand 25/Jun; Execute agreement to dissolve the JV with AirAsia 28/Jun; Complete stock transfer to convert to 100% subsidiary 1Q/FY13 2Q/FY13 onward Scheduled Route Base airport; Narita, Chubu International short-haul and domestic routes Domestic L/F:55.5% Narita=Sapporo/ Fukuoka/ Okinawa Chubu=Sapporo/ Fukuoka International L/F:52.1% Narita=Incheon/Busan Chubu=Incheon Aircraft No.5 aircraft introduced in Jun. ANA2013 Operation Plan 3/Jul; Narita=Taipei (New route) Suspension of Chubu routes in Sep and partial suspension of Narita routes in Oct. Aircraft 4 aircraft in operation for Sep. 3 aircraft for Oct (return to AirAsia gradually) "AirAsia Japan" brand Terminate use as of end of Oct. New LCC Brand Rebuild LCC model at Narita base Marketing Fleet Plan Broad-based Commence operation development by by two A320 of of latent demand 5 aircraft at at the end of of FY13 in in the Tokyo Metropolitan area Gradual increase onward 6

7 Strategic Investment Expand business domain based on air traffic demand in Asia, which h continues to make remarkable growth Expansion of airline business in Asia Airline related services that support the airline business Emergence into highly demanded growth markets Passenger and cargo traffic created by the ANA network Development of aviation industry in emerging markets Significant expansion of aircraft in operation in Asian n market Increase in demand of pilot training and development service Increase in demand of aircraft maintenance service FSC Brand (ANA) LCC Brand (New LCC in Narita) (Peach) Investment in Asian Airlines MRO* business (in Okinawa) Pilot training business * Maintenance, Repair & Overhaul Acquisition of pilot training provider (Stock acquisition agreement concluded on 30 July 2013, acquisition total value US$139.5 mn,, approx. JPY13.7 bn) Pan Am Holdings, Inc. and its subsidiaries, including Pan Am International Flight Academy, Inc. Training Base: Miami, Cincinnati, Denver, Las Vegas, Memphis, Minneapolis Training Partner Airlines: United Airlines/Delta Air Lines/American Airlines/Atlas Air/FedEx Post-acquisition business expansion Take advantage of strong brand recognition and training business management experience to break into the Asian market Establish Asian base / Integrate with ANA group training business ANA2013 7

8 Intentionally Blank ANA2013 8

9 Ⅱ. FY2013 Financial Results First Quarter Details ANA2013 9

10 Highlights FY2013 First Quarter Highlights of Financial Results FY13 1Q and FY12 1Q-4Q Consolidated operating income for first year posted a loss of 5.6 billion yen (16.6 billion yen year-on-year decrease). 6.6 billion yen net loss for the quarter (7.3 billion yen year-on-year decrease); EBITDA of 28.3 billion yen (12.6 billion yen year-on-year decrease) FY2012 FY2013 ANA ( Billion) 営業利益純利益 EBITDA 1Q 2Q 3Q 4Q 1Q 10

11 Consolidated Financial Summary Income Statements 1Q/FY12 1Q/FY13 Difference Operating Revenues Operating Expenses Operating Income Op. Margin (%) Non-Op. Gains/Losses Recurring Income Extraordinary Gains/Losses Net Income Net Income Before Minority Interests Other Comprehensive Income Comprehensive Income ( Billion) ANA

12 Consolidated Financial Position Consolidated Financial Summary Mar 31, 2013 Jun 30, 2013 Difference Assets 2,137.2 Shareholders' Equity Ratio of Shareholders' Equity (%) 35.9 Interest Bearing Debts Debt/Equity Ratio (times) * 1.2 2, Net Interest Bearing Debts ** ( Billion) * D/E ratio when including off-balanced lease obligation of billion ( billion as of the end of March, 2013) is 1.3 times (1.3 times as of the end of March, 2013) ** Net Interest Bearing Debts: Interest Bearing Debts-(Liquid Assets(Cash on Hand and in Banks+Marketable Securities)) ANA

13 Consolidated Financial Summary Consolidated Statements of Cash Flow 1Q/FY12 1Q/FY13 Difference Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities Net Increase or Decrease Cash and Cash Equivalent at the beginning Cash and Cash Equivalent at the end ** Depreciation and Amortization Capital Expenditures Substantial Free Cash Flow (excluding periodic/negotiable deposits of more than 3 months) EBITDA * EBITDA Margin(%) * EBITDA:Op. Income+Depreciation ( Billion) ANA2013 ** Includes effect on cash and cash equivalents with change of scope of consolidation 13

14 Consolidated Financial Summary Results by Segment 1Q/FY12 1Q/FY13 Difference Air Transportation Airline Related Travel Services Revenues Trade and Retail Total for Reporting Segments Others Adjustment Total Air Transportation Airline Related Travel Services Operating Income Trade and Retail Total for Reporting Segments Others Adjustment Total ANA2013 ( Billion) 14

15 Air Transportation Business Operating Revenues and Expenses ( Billion) 1Q/FY12 1Q/FY13 Difference Domestic Passengers Operating Revenues Operating Expenses Op. Income International Passengers Cargo and Mail Others Total Fuel and Fuel Tax Landing and Navigation Fees Aircraft Leasing Fees Depreciation and Amortization Aircraft Maintenance Personnel Sales Commission and Promotion Contracts Others Total Operating Income EBITDA* EBITDA Margin (%) ANA2013 * EBITDA: Op. Income + Depreciation, Includes inactive fixed asset depreciation expenses 15

16 Changes in Operating Income ( Billion) 9.0 Domestic Passenger -1.8 International Passenger +6.2 Air Transportation Business Cargo & Mail +2.8 Other Revenue +5.7 Revenues Decrease in Profit Revenue from contracted Maintenance and Handling Mileage/Card LCC Business, etc Expenses Other Expense Sales-Linked Depreciation except Aircraft Maintenance, etc Operation-Linked Commission, Advertisement In-flight service Ground Handling, etc. Landing/Navigation Fees Depreciation Personnel Contracts, etc. Fuel & Fuel Tax FY12 1Q Op. Income -6.5 FY13 1Q Op. Income ANA

17 Air Transportation Business Domestic Passenger Operations 1Q/FY12 1Q/FY13 % Y/Y Available Seat Km (million) 14,256 14, Revenue Passenger Km (million) 8,296 8, Passengers (thousands) 9,502 9, Load Factor (%) Passenger Revenues ( Billion) Unit Revenue ( /ASK) Yield ( /RPK) Unit Price ( /Passenger) 15,706 15, *Difference The above data does not include AirAsia Japan. The company has carried 144 thousand passengers over 275 million available seat-km and 152 million revenue passenger-km with a passenger load factor of 55.5% for the first quarter ANA

18 Trends in Domestic Passenger Operations FY2013 1Q Revenue Change Factors Although revenue increased due to passenger factors resulting from the ASK increase, unit price factors including increased shareholder fare discounts and passenger class mix changes resulted in an overall decrease in revenue for 1Q Main Passenger Factors Haneda Slot Increase +3.0 ASK Increase +1.0 Competitors ASK Increase -2.5 Shareholder Fare Discounts +1.5 B787 Operation Suspension -2.5 Demand Stimulation Measures, etc Air Transportation Business (Does not include AirAsia Japan) ( Billion) 20.0 Quarterly Trends in Domestic Passengers by Segment, Unit Price The number of total passengers increased by 2% year on year due to increases in package/travel passengers Passenger YoY (%) Unit Price(Index: FY10 1Q=100) 50.0 Unit Price (right axis) 150 Total (left axis) 40.0 Individual (left axis) 140 Promotional Fares (left axis) 30.0 Package/Travel (left axis) Main Unit Price Factors Shareholder Fare Discounts -3.0 Passenger Class Mix Changes due to increase in Package/Travel Passengers Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY12 1Q FY13 1Q FY10 FY11 FY12 FY13 Quarterly Key Topics : From May 26 Operational clearance for Boeing 787 non-scheduled flights (May 23 release) Awarded World s Best Airport Services and Best Aircraft Cabin Cleanliness by SKYTRAX (June 19 release) ANA

19 Air Transportation Business International Passenger Operations 1Q/FY12 1Q/FY13 % Y/Y Available Seat Km (million) 9,059 9, Revenue Passenger Km (million) 6,818 6, Passengers (thousands) 1,592 1, Load Factor (%) Passenger Revenues ( Billion) Unit Revenue ( /ASK) Yield ( /RPK) Unit Price ( /Passenger) 52,275 62, *Difference The above data does not include AirAsia Japan. The company has carried 39 thousand passengers over 85 million available seat-km and 44 million revenue passenger-km with a passenger load factor of 52.1% for the first quarter ANA

20 Trends in International Passenger Operations FY2013 1Q Revenue Change Factors Quarterly Key Topics : From June 1 Air Transportation Business Although the number of passengers on China and some Asia routes decreased, an increase in the number of passengers on Europe and North America routes as well as unit price improvement resulting from passenger class and route mix changes resulted in an overall increase in revenue ( Billion) 83.2 FY12 1Q Main Unit Price Factors Yield Management +2.0 Passenger class / route mix changes +7.0 Foreign Exchange +6.0 FSC Main Passenger Factors ASK Increase +2.5 FSC +1.5 Stagnant Demand -8.5 Sales Promotion, etc FY13 1Q (Does not include AirAsia Japan) Revision of international routes luggage policies (April 25 release) Quarterly ASK/RPK/ Yield Trends Although impacted by stagnant demand recovery on China routes and operation suspension of the Incheon routes, demand on North America routes was solid. Total RPK increased by 2.1% year on year Index:FY10 1Q=100 From June 10 The investment management company (Strategic Partner Investment Pte. Ltd.) in Singapore starts business (June 10 release) ANA ASK RPK Yield 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q FY10 FY11 FY12 FY13

21 Air Transportation Business Trends in International Passenger Operations (Does not include AirAsia Japan) Passenger Demand Trends on China Routes Passengers in total once again experienced a year-on-year decline due to stagnant leisure travel demand out of Japan Passenger YoY (%) Total Business Leisure OCT NOV DEC JAN FEB MAR APR MAY JUN Trends in ASK/RPK of International Routes by Destination While North America routes continue to maintain double-digit RPK, RPK on Europe and Asia routes remain consistent with last year North America (Index: FY12 1Q=100) ANA China Asia ASK 1Q 2Q 3Q 4Q 1Q ASK FY12 RPK 1Q 2Q 3Q 4Q 1Q FY12 RPK (Index: FY12 1Q=100) FY13 FY13 Europe (Index: FY12 1Q=100) ASK RPK 1Q 2Q 3Q 4Q 1Q ASK FY12 (Index: FY12 1Q=100) RPK 1Q 2Q 3Q 4Q 1Q FY12 FY13 FY13

22 Air Transportation Business Domestic Cargo Operations 1Q/FY12 1Q/FY13 % Y/Y Available Ton Km (million) Revenue Ton Km (million) Domestic Cargo Revenue Ton (thousand tons) Load Factor (%) Cargo Revenues ( Billion) Unit Revenue ( /ATK) Unit Price ( /kg) Available Ton Km (million) Revenue Ton Km (million) Domestic Freighter Included Above Revenue Ton (thousand tons) Load Factor (%) Cargo Revenues ( Billion) Unit Revenue ( /ATK) Unit Price ( /kg) ANA2013 *Difference 22

23 Air Transportation Business International Cargo Operations 1Q/FY12 1Q/FY13 % Y/Y Available Ton Km (million) 945 1, Revenue Ton Km (million) International Cargo Revenue Ton (thousand tons) Load Factor (%) Cargo Revenues ( Billion) Unit Revenue ( /ATK) Unit Price ( /kg) Available Ton Km (million) Revenue Ton Km (million) International Freighter Included Above Revenue Ton (thousand tons) Load Factor (%) Cargo Revenues ( Billion) Unit Revenue ( /ATK) Unit Price ( /kg) ANA2013 *Difference 23

24 Trends in International Cargo Operations Air Transportation Business FY2013 1Q Revenue Change Factors The nut price for foreign currency revenue improved due to yen depreciation and the ATK increase led to increased volume, which resulted in an increase in revenue Main Weight Factors ATK Increase +2.0 Marketing Measures, etc FY12 1Q Main Unit Price Factors FSC -0.5 Foreign Exchange +3.0 Price decrease effects -2.0 Cargo Only. Does not include postal mail ( Billion) 24.5 FY13 1Q FY2013 1Q Traffic Results by Destination RTK was expanded in all regions and, in particular, despite a contraction of ATK, we maintained RTK of over 10% on China routes YoY (%) 30.0 ATK RTK Total North America Europe China Asia Quarterly Key Topics : From April: Fuel Surcharge Revised (March 19 release) e.g.) for Europe, North America and Middle East: from 134 to 141 From May: Fuel Surcharge Revised (April 18 release) e.g.) for Europe, North America and Middle East: from 141 to 127 From June: Fuel Surcharge Revised (May 13 release) e.g.) for Europe, North America and Middle East: from 127 to 120 ANA

25 Other Segments excluding Air Transportation Business Results by Segment Airline Related Travel Services 1Q/FY12 1Q/FY13 Difference 1Q/FY12 1Q/FY13 Difference Revenues Op. Income Depreciation and Amortization EBITDA* EBITDA Margin (%) Trade and Retail Others 1Q/FY12 1Q/FY13 Difference 1Q/FY12 1Q/FY13 Difference Revenues Op. Income Depreciation and Amortization EBITDA* EBITDA Margin (%) * EBITDA: Op. Income + Depreciation ( Billion) ANA

26 Intentionally Blank ANA

27 Ⅲ.Amendments to Disclosure Segments ANA

28 Earnings Forecast by Segment Amendments to Disclosure Segments (Revision based on amendments to disclosure segments. No revision of earnings forecast) FY12 FY13 (E) Difference Air Transportation 1, , Airline Related Travel Services Revenues Trade and Retail Total for Reporting Segments , , Others Adjustment Total 1, , Air Transportation Airline Related Travel Services Operating Income Trade and Retail Total for Reporting Segments Others Adjustment Total ANA2013 ( Billion) 28

29 Amendments to Disclosure Segments Air Transportation Business (Operating Revenues and Expenses) (Revision based on amendments to disclosure segments. No revision of earnings forecast) FY12 FY13 (E) Difference Domestic Passengers International Passengers Operating Revenues Cargo and Mail Others * Total 1, , Fuel and Fuel Tax Operating Expenses Non Fuel Cost Total 1, , Op. Income Operating Income *Operating Revenues of AirAsia Japan are included in Others ( Billion) ANA

30 Amendments to Disclosure Segments Air Transportation Business (Change in Operating Income) ( Billion) (Revision based on amendments to disclosure segments. No revision of earnings forecast) Cargo & Mail Other Revenue Non-Fuel Cost International Passenger Fuel & Fuel Tax 89.1 Domestic Passenger Revenues Increase in Profit Expenses FY12 FY13 Op. Income Op. Income (Estimate) ANA

31 Ⅳ. Supplemental Reference ANA

32 Intentionally Blank ANA

33 Supplemental Reference Fuel & Exchange Rate Fuel FY2013 Earning Forecast Dubai Crude Oil:US$102 Kerosene:US$ % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Hedge Ratio (As of June, 2013) 40% 20% 5% FY2013 FY2014 FY2015 Fuel Cost (US$1 change per per barrel) Non hedge Impact of of oil oil price 2.3 Bn JPY ANA2013 Exchange Rate 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% FY2013 Earnings Forecast US$:95JPY Hedge Ratio (As of June, 2013) 70% 40% 10% FY2013 FY2014 FY2015 Expenses in Foreign Currency (Excluding Fuel) Expenses in Foreign Currency (Fuel) Revenues in Foreign Currency (Int l Passenger) (Int l Cargo) Scope of Hedge 33

34 Supplemental 燃油 為替 Reference Impact of Foreign Exchange Rates (operating income (loss) /including hedge effects; units: billion yen) Revenue Expense FY13 First Quarter Results (Earning Forecast as of 30 Apr, 2013 vs. Weighed Avg. during period) +4.0 All Currencies 1.0 Bn Yen Profit Decrease USD Other Currencies ANA

35 Supplemental Reference International Passenger Results by Destination (Does not Include AirAsia Japan) 1Q/FY13 Composition Difference North America Europe Revenue China Asia Resort North America Europe ASK China Asia Resort North America Europe RPK China Asia Resort ANA

36 Supplemental Reference International Cargo Results by Destination 1Q/FY13 Composition Difference Revenue ATK RTK North America Europe China Asia Others North America Europe China Asia Others North America Europe China Asia Others ANA

37 Supplemental Reference Aircraft in Service Mar, 2013 Jun, 2013 Change Owned Leased Boeing (Domestic) Wide-Body Mid-Body Narrow-Body Regional Total Boeing ER Boeing Boeing ER Boeing Boeing Boeing ER Boeing Boeing F Boeing BCF Airbus A * Boeing Boeing ER Boeing Boeing Bombardier DHC (Q400) Bombardier DHC (Q300) * Including 5 aircraft operated by AirAsia Japan (all leased aircraft) ** As of June 30, 2013, excluding leased aircraft outside group (14 as of end of FY2013 1st Quarter, 13 as of end of prior fiscal year) ANA

38 Cautionary Statement Forward-Looking Statements. This material contains forward-looking statements based on ANA s current plans, estimates, strategies, assumptions and beliefs. These statements represent the judgments and hypotheses of the Company s management based on currently available information. Air transportation, the Company s core business, involves governmentmandated costs that are beyond the Company s control, such as airport utilization fees and Fuel taxes. In additions, conditions in the markets served by the Company are subject to significant fluctuations. It is possible that these conditions will change dramatically due to a number of factors, such as trends in the economic environment, aviation fuel tax, technologies, demand, competition, foreign exchange rate fluctuations, and others. Due to these risks and uncertainties, it is possible that the Company s future performance will differ significantly from the contents of this material. Accordingly, there is no assurance that the forward-looking statements in this material will prove to be accurate. ANA2013

39 ANA Group Corporate Philosophy Mission Statement ANA Group Safety Principles Built on a foundation of security and trust, the wings within ourselves help to fulfill the hopes and dreams of an interconnected world. Safety is our promise to the public and is the foundation of our business Safety is assured by an integrated management system and mutual respect. Safety is enhanced through individual performance and dedication Management Vision It is our goal to be the world s leading airline group in customer satisfaction and value creation. ANA

40 Thank you. This material is available on our website. (Our website has been renewed) Investor Relations IR Library Presentations ANA2013 Investor Relations, ANA Holdings Inc. Phone +81-(0) (Our company name, department name, and mail address have changed) 40