SAS Group Q Teleconference August 8, 2012

Transcription

1 SAS Group Q Teleconference August 8, Q2 4Excellence delivers tangible results Unit cost down 4% EBT (before non rec.) MSEK 137 EBT MSEK 371 Positive cash flow from operating activities MSEK 676 4Excellence delivers tangible results SEK 5 billion under implementation Passenger growth +228,000 Passenger revenues up 3% (adjusted for currency/one off) Unit cost down 4% Airline industry still heavily challenged Continued high fuel prices Continued competitive market with yield pressure Uncertainties regarding Euro crisis 2 1

2 New strategy 4Excellence delivers tangible results SEK 1,5 bn Revenue activities New destinations Network optimization Ancillary revenues 1/3 implemented SEK 3,5 bn Cost activities Union agreements LEAN Outsourcing / Purchasing Productivity 3 Revenue enhancing measures are effective 38 new destinations launched 2012 Leisure expansion well received 29 new leisure routes summer 2012; Barcelona, Dubrovnik, Palma, Keflavik, Nice, Split etc Yield management improved route results Europe Increased ancillary revenues Shanghai introduced well received US traffic strong good timing of San Francisco opening Passenger Revenue (currency adjusted) % Q Q

3 Lower yield as consequence of new strategy underlying yield positive Scandinavian Airlines (incl. Blue1) Yield, Q vs Q ,3 1,0 2,7 2,0 Reported yield Leisure routes Shanghai Underlying yield 5 More passengers, improved customer satisfaction and record punctuality Punctuality, 15 min Customer Satisfaction SAS Group number of (Scandinavian Airlines) Index, CSI passengers, million ,0 7,6 89,2 7,4 Q Q Q Q Q Q

4 4Excellence delivers unit cost reductions Union agreements Union agreements LEAN Outsourcing Purchasing Productivity Salary freeze Pension schemes Increased flexibility LEAN Ground handling Maintenance Crew planning Unit cost 4% Outsourcing /Purchasing New maintenance supply agreement 7 Tangible productivity improvements in Q2 Payroll, ASK and currency adjusted, MSEK % Scandinavian Airlines block hours, short haul +2.4% 8, ,9 7,8 Q Q Q Q Union agreements Fleet strategy FTE management Network optimization Admin restructuring LEAN 8 4

5 GÖRAN JANSSON CFO Good topline development driven by passenger growth Total revenue up MSEK 453 in Q2 Passenger revenue currency adjusted approx +323 MSEK ,3% +145 MSEK * Q Currency Curr Adj 2011 Passenger growth Passenger C/F Passenger yield *excl. Eurobonus Other traffic revenues Net Cargo & Other Norwegian security strike Q

6 Good cost control visible in the P/L (MSEK) Total operatingrevenue revenue (excl. Eurobonus) Payroll expenses Fuel Government charges Other operating expenses Total operating expenses EBITDAR before non recurring items Leasing costs, aircraft Depreciation Share of income in affiliated companies EBIT before non recurring items Financial items EBT before non recurring items Non recurring items EBT Apr Jun ,392 3,307 2,788 1,115 2,954 10,164 1, Share of revenue Apr Jun , % 24.5% 9.8% 25.9% 89.2% 10.8% 3.6% 3.8% 0.1% 3.5% 2.3% 1.2% 2.1% 3.3% 3,320 2,004 1,040 3,233 9,597 1, Share of revenue 30.4% 18.3% 9.5% 29.6% 87.7% 12.3% 3.4% 3.9% 00% 0.0% 5.0% 1.7% 3.3% 3.3% 6.7% Change (p.u.) Approx. MSEK 800 in higher fuel cost Q MSEK Q Hedge Time value Currency Volume/Price Q /Other Q2 2011: +351 Q2 2012: -49 Q2 2011: - 35 Q2 2012:

7 Good cash flow driven by improved working capital Cash flow from operating activities, MSEK H ,891 H Strong working capital affected by Sales campaigns Good passenger growth Attractive leisure offering Focus on working capital processes Enabled amortizations on gross debt of SEK 2.2 billion Adjusted for EU fine of 660 MSEK 13 SEK 8.2 billion in financial preparedness Financial preparedness, SEK billion % % SEK 8.2 billion in total financial preparedness SEK 5.0 billion credit facilities SEK 3.2 billion cash Good financial preparedness Cash effect from property transaction, MSEK 440 in Q2 Q Q

8 RICKARD GUSTAFSON PRESIDENT & CEO 2012 Outlook Growing in line with the market (approx. 5%) Maintained world class operational performance Increased earnings effects from accelerated 4Excellence to come in second half of 2012 Continued high fuel prices Continued competitive market with yield pressure Uncertainties regarding Euro crisis Due to uncertainties no earnings forecast will be provided for the full year

9 Thank you! 17 The SAS Group s business structure (reporting segments as from Q1 2011) SAS Group Scandinavian Airlines* Widerøe * Inclusive of Blue1 18 9

10 Appendices Fleet & productivity Unit revenue (yield & RASK) & Unit cost Traffic & capacity outlook Financial update Currency & Fuel 19 World s most punctual airline in Q in the category major airline according to Flightstats Punctuality (15 min) Q vs Q2 2012, % Scandinavian Airlines 91,0 89,2 Q Fast Track Q ,039 flights on time in Q (91.0%) (Departure within 15 min) Innovative and time saving solutions SAS Fast Track World class punctuality 20 10

11 Modernization of fleet well in progress SAS main Airbus A330/ Scandinavian Airlines Airbus A319/A320/A321 Scandinavian Airlines Boeing /700/800 Scandinavian Airlines SAS being fased out, no later than 2013/2014 Boeing /500 Scandinavian Airlines MD 82/87 Scandinavian Airlines 2.4% increased short haul productivity in Q2 Widerøe & Blue1 dehavilland Q 100/300/400NG Scandinavian Airlines Boeing 717 Scandinavian Airlines In total, SAS is phasing in 30 modern aircraft that will completely replace older generations during SAS Group fleet June 2012 Aircraft Type Age Owned Leased Total Leased out Order Airbus A330/ Airbus A321/A320/A319 8, Boeing 737 Classic Boeing 737 NG Boeing , Douglas MD-80-series 22, Douglas MD-90-series Avro RJ dehavilland Q-series 14, Bombardier CRJ900 NG Total Split per Airline SAS (incl Blue1) Wideroe 39 Leased out aircraft 8 Total *In addition SAS wet leases the following Aircraft: four CRJ for SAS in Denmark, two ATR and four S2000 for Blue1 in Finland

12 Productivity development Scandinavian Airlines Aircraft utilization (12 months rolling) Hrs/day Scandinavian Airlines Cabin, pilot utilization (12 months rolling) Hrs/yr 8, ,0 7,5 7,0 6,5 6,0 5,5 5,0 Ja an 2008 Capacity reduction initiated un 2008 Ju ov 2008 pr 2009 No A ep 2009 Se eb 2010 Fe ul 2010 J dec-10 Increasing utilization in 4Excellence 11-may 11-oct Mar Jan 2008 Capacity reduction initiated Jun 2008 Nov 2008 Apr 2009 J N A Sep 2009 S Feb 2010 F Increasing productivity due to Core SAS strategy Jul 2010 dec may 11-oct Mar-12 Pilots Cabin crew Block hours, 12 months rolling, June 2012 Aircraft, hours/day Pilots, hours/year Cabin, hours/year Scandinavian Airlines (incl. Blue1) Widerøe Blue Appendices Fleet & productivity Unit revenue (yield & RASK) & unit cost Traffic & capacity outlook Financial update Currency & Fuel 24 12

13 Yield and RASK development Yield, currency adj Apr Jun Jan Jun Yield, NOK Apr Jun Jan Jun 2.7%* 2.5%* 1.5% 2.2% RASK, currency adj Apr Jun Jan Jun RASK, NOK Apr Jun Jan Jun 03% 0.3% 0.9% 09% 4.0% 0.4% * 2011 Adjusted for Eurobonus 25 Yield at record low levels, but load factor at historic high Load Factor Yield (SEK) 80% 70% Yield (12 months rolling), SK Load Factor (12 months rolling), SAS Group 1,35 1,30 1,25 1,20 1, ,10 1,05 60% January 2005 January 2006 January 2007 January 2008 January 2009 January 2010 January 2011 January ,

14 Yield development Quarterly Scandinavian Airlines Scandinavian Airlines, currency adjusted yield vs last year 20,0% 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% -15,0% -20,0% 1,2% -6,3% -14,3% -15,6% Q Q Q ,8% -0,6% -0,6% Q Q Q Q ,8% Q ,2% 1,9% Q Q ,2% Q ,4% 16,0% Q Q ,3% Q ,7% 1,0% Q ,1% -6,0% Q Q Q ,8% 2,9% 5,6% Q Q ,6% -1,3% -2,3% -2,3% -4,3% -4,0% -2,7% 66% 67% -8,2% -7,6% -6,6% -6,7% -9,4% -11,4% Q Q Q Q Q Q Q Q Q Q Q Q Q Q 2012 Note: Inclusive of Blue1 from Q Scandinavian Airlines Continued pressure on yields Load factor Yield (SEK) 80% 70% 60% Load factor (12 months rolling) Yield (12 months rolling) 28 14

15 Scandinavian Airlines Total unit cost development Unit cost down 4.0% in Q2 excluding jet fuel 10% Negative effects from grounding of Q400 Higher jet fuel costs affecting unit cost. Unit cost down 4.0% ex fuel in Q % 0% -5% -10% -15% Turnaround 2005 and increasing intercontinental capacity Unit cost decrease and capacity reduction at same time during core SAS -20% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Unit cost development excluding jet fuel Scandinavian Airlines, Currency adjusted quartery change vs. last year excluding jet fuel 5% 0% 0,9% 1,5% -5% -10% -9,3% -2,6% -6,0% -7,1% -5,1% -3,5% -4,0% -12,2% -15% Q Q Q Q Q Q Q Q Q Q

16 Scandinavian Airlines Breakdown of unit cost in Q Scandinavian Airlines, currency adjusted Unit cost breakdown Apr Jun 2012 Apr Jun 2011 Var, % Payroll expenses Jet fuel Government user fees Selling and distribution costs Handling costs Technical aircraft maint. Other operating expenses 1 Total operating expenses Leasing costs for aircraft Depreciation Adjusted EBIT % 21.1% 1.6% 8.6% 8.9% 12.5% % 2.7% 2.9% 2.2% Share of total var, % 2.2% 5.2% 0.2% 0.6% 0.4% 0.8% 1.0% 2.4% 0.1% 0.1% 2.2% 31 Scandinavian Airlines Breakdown of unit cost Jan Jun 2012 Scandinavian Airlines, currency adjusted Unit cost breakdown Jan Jun 2012 Jan Jun 2011 Var, % Payroll expenses Jet fuel Government user fees Selling and distribution costs Handling costs Technical aircraft maint. Other operating expenses 1 Total operating expenses Leasing costs for aircraft Depreciation Adjusted EBIT % 17.9% 1.6% 10.8% 8.4% 3.2% 3.9% 6.1% 2.1% 3.1% Share of total var, % 1.2% 4.2% 0.2% 0.8% 0.4% 0.2% 1.8% 3.5% 0.3% 0.1% 3.1% 32 16

17 Appendices Fleet & productivity Unit revenue (yield & RASK) & Unit cost Traffic and capacity outlook Financial update Currency & Fuel 33 Strongest traffic growth on intercontinental routes RPK Jan Jun 2012 vs Jan Jun 2011, SAS Group 14% 12% 10% 8% 6% 4% 2% 0% SAS Group Intercontinental Europe/Instrascand Domestic 34 17

18 ASK outlook 2012 Scheduled 2012 vs2011 SAS Group Scandinavian Airlines (incl. Blue1) Widerøe +4 5% +4% +7 8% 35 North Atlantic SAS increasing market shares Traffic development January June 2012 SK traffic up 8.9 AEA traffic up 43% 4.3% SAS to launch Copenhagen San Francisco in April 2013 SAS improved load factors in 2012 SAS load factors lower than the AEA Load factor 100% 95% 90% 85% 80% 75% 70% 65% 60% Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 Jun 2009 Jul 2009 Aug 2009 Sep 2009 Oct 2009 Nov 2009 Dec 2009 Jan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 nov-10 dec-10 jan-11 feb-11 mar-11 apr-11 may-11 Jun-11 jul-11 Aug-11 sep-11 oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 SAS AEA 36 18

19 Asia strong growth in Q2 New destination and weak comparables from March 2011 Scandinavian Airlines serving Bangkok, Beijing and Tokyo from Copenhagen Copenhagen Shanghai opened in March 2012 Traffic development January June 2012: AEA traffic up 7.4% SAS traffic down 15.9% Load factor 95% 90% 85% 80% 75% 70% 65% SAS AEA 60% Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 Jun 2009 Jul 2009 Aug 2009 Sep 2009 Oct 2009 Nov 2009 Dec 2010 Jan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 nov-10 dec-10 jan-11 feb-11 mar-11 Apr-11 May-11 Jun-11 jul-2011 Aug-2011 Sep-2011 Oct-2011 Nov-2011 Dec-2011 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun Cross border European routes New routes adding to SAS s growth 38 new routes to be launched in 2012 (including Shanghai) Traffic development January June 2012: AEA traffic up 5.6% SAS traffic up 5.2% SAS load factor improving more than the AEA Load factor 85% 80% 75% SAS AEA 70% 65% 60% 55% Jan 2009 Feb 2009 Mar 2009 Apr 2009 May 2009 Jun 2009 Jul 2009 Aug 2009 Sep 2009 Oct 2009 Nov 2009 Dec 2009 Jan 2010 Feb 2010 Mar 2010 Apr 2010 May 2010 Jun 2010 Jul 2010 Aug 2010 Sep 2010 Oct 2010 nov-10 dec-10 jan-11 feb-11 mar-11 Apr-11 May-11 Jun-11 jul-11 Aug-11 Sep-11 Oct-2011 Nov-2011 Dec-2011 Jan-2012 Feb-2012 Mar-2012 Apr-12 May-12 Jun

20 Internet check in is the most commonly used check in option by SAS customers 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Kiosk Internet Kiosk+internet 39 Appendices Fleet & productivity Unit revenue (yield & RASK) & Unit cost Traffic & capacity outlook Financial update Currency & Fuel 40 20

21 Negative result but strong cash flow generation during January June 2012 Result, MSEK Apr Jun Apr Jun Jan Jun Jan Jun Revenues 11,392 11,319 20,983 20,632 EBT bef. non recurring items EBT Cash flow from operations , Cash flow from operations improved MSEK 1, Positive traffic growth, but yield pressure offset by load factor SAS Group Q Q Q Q Q Traffic (RPK) +13.3% +4.7% +0.9% +5.1% +5.9% Passenger load factor +0.7 p.u p.u. 1.5 p.u p.u p.u. SAS^ Passenger yield +0.6%* 2.8% 4.0% 2.3% 2.7% Total unit revenue (RASK) +6.6% 2.1% 6.7% +1.7% +0.3% Total unit cost (excluding fuel) 5.1% 5.1%** 3.5% +1.5% 4.0% * Underlying yield, excluding positive effects from revaluation of EuroBonus liability. ** Excluding write down of aircraft ^ Including Blue1 from Q

22 GDP is slowing down Sweden Norway Denmark Eurozone 3, E2012 Source: Nordea, Bloomberg, Eurostat E E , E2012 Business travel agents bookings increasing at similar rate as leisure bookings Negative mix effect within corporate bookings affecting yields 40% have Buy of the Day policy 43 Summary of the SAS Group s balance sheet MSEK 30 Jun Dec Jun 2011 Aircraft and Spare parts Other non interest bearing assets Interest bearing assets Cash and cash equivalents Total Assets Total shareholders' equity 1 Deferred tax Other interest bearing liabilities Operating liabilities Total shareholders' equity and liabilities Including minority interests 44 22

23 Overview of available funds June 2012 Available funds, SEK billion Jun 2012 Maturity Liquid funds Undrawn portion of credit facilities Total undrawn credit facilities Total available funds Total credit facilities Drawn portion of credit facilities Undrawn portion of credit facilities Revolving Credit Facility, MEUR 366 (total SEK 3.3bn) Revolving Credit Facility, MUSD 95 (total SEK 0.7 bn) Credit Facility, MUSD 125 & 74 (total SEK 1.4 bn) Bi lateral Revolving Credit Facilities (total SEK 1.3 bn) Others Jun 2013 Apr 2013 Jan 2016 & Oct 2017 Jun Amortization profile updated for financial year ending October Scheduled amortization profile, SEK billion 46 23

24 Gearing ratios impacted by Spanair in Q4 2011, but slightly improved again in Q2 400% 350% 300% 250% Fin Net Debt / Equity Equity / Total Assets Fin. Net Debt + 7*Op lease / Equity 200% 150% 100% 50% 0% dec-98 dec-00 dec-02 jun-03 dec-03 jun-04 dec jun dec 06-jun 06-dec 07-jun 07-dec 08-jun 01-dec 09-jun 09-dec 10-jun 10-dec 11-jun dec-11 Jun SAS Group Financial Net January June MSEK Interest net and others Exchange rate differences Jan Jun 2012 Jan Jun 2011 Difference Financial net MSEK Apr Jun 2012 Apr Jun 2011 Difference Interest net and others Exchange rate differences Financial net

25 Development and Break Down of Financial Net Debt MSEK Cash Other interest bearing assets Interest bearing liabilities Difference Financial net debt Development of financial net debt MSEK Dec 93 Dec 95 Dec 97 Dec 99 Dec 01 Dec 03 Dec 05 Dec 07 Dec 09 Dec

26 Equity / Assets Ratio % 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Financial Net Debt / Equity Ratio ,0 1,8 1,5 1,3 1,0 0,8 0,5 0,3 0,

27 Development of the financial net debt during Jan Jun 2012 SEK billion Financial net debt December 2011 Investments Sales Cash flow from operating activities Currency and others * Financial net debt June * Of this, SEK 0.4 is due to revaluation of financial instruments relating to IAS39 and SEK 0.2 relates to reclassification of assets from interest bearing receivables to aircraft. 53 Appendices Fleet & productivity Unit revenue (yield & RASK) & Unit cost Traffic & capacity outlook Financial update Currency & Fuel 54 27

28 Breakdown of currency effects SAS Group 2012 vs 2011 Total revenues & costs currency effects Apr Jun Jan Jun Total revenues & costs USD DKK NOK EUR Asian currencies All others Total Forward cover costs Difference Working capital Difference Financial items Difference Total currency effects Changes in currency exchange rates affected the result by MSEK 791 in Jan Jun 2012 vs Jan Jun 2011 Currency effects MSEK on SAS Group 2012 vs 2011 Apr Jun 2012 Jan Jun 2012 Positive impact on revenue due to the weaker SEK, mainly in Q2 Total revenue Total costs Negative impact on other operating costs due to the weaker SEK, mainly in Q2 Forward cover costs & working capital Dissolution in 2011 of USD hedges for aircraft amounted to MSEK 970 Income before depreciation Financial items 0 19 Income before tax

29 Currency distribution in the SAS Group 2011 Revenues Expenses Jet fuel prices came down during Q2, but still at high levels Jet fuel, spot price development, USD Current hedges 58% of the consumption hedged for next 12 months Only swaps and options Due to falling jet fuel prices, the market value of the hedge portfolio was slightly negative in June Amended policy to offset fuel price volatility Hedging 40 80% ofexpected consumption (12 months rolling) Up to 18 months hedging allowed Yield management Cost initiatives 58 29

30 SAS hedging position mostly options SAS Group s jet fuel hedging portfolio Q Q Q Q Jet fuel hedging proportion 67% 61% 54% 50% SAS Group s jet costs in 2012 (annual average values) 5.0 SEK/USD 6.0 SEK/USD 7.0 SEK/USD 8.0 SEK/USD Market price 800 USD/MT USD/MT USD/MT USD/MT SEK 7.8 bn SEK 8.2 bn SEK 8.5 bn SEK 8.8 bn SEK 8.4 bn SEK 8.9 bn SEK 9.2 bn SEK 9.6 bn SEK 9.0 bn SEK 9.6 bn SEK 9.9 bn SEK 10.4 bn SEK 9.6 bn SEK 10.3 bn SEK 10.7 bn SEK 11.2 bn