Teleconference First Quarter 2002

Transcription

1 Teleconference First Quarter 2002 May 15th, Table of contents Summary of 1 st Quarter 2002 SAS shares Business area- SAS Airline Result improvement measures Business area Subsidiary Airlines & Affilliates Business area Airline related Business area Rezidor SAS Hospitality Outlook 2002 Appendices 3

2 1 st Quarter 2002 Situation from the 4 th Quarter 2001 carried on 1 st Quarter 2002, but worst has now passed Ongoing capacity reductions Significant improvements in passenger load factors Significant result improvement measures in pipeline Limited effects 1 st Quarter Significant effects going forward 4 Loss carry forward from 4 th Q 2001 into 1 st Q 2002 Total traffic improved Group passenger load factors at record levels SAS Airline (+1,3p.u.) Braathens (+5,5), Spanair (+4,3) Negative mix and yield pressure severe Significant losses January/ February Improvements noted in March/April Group result improvement measures According to set out plan Effects in second half 5 Business structure five business areas introduced 6

3 Group Management Board of Directors President & CEO SAS Group Corporate Functions Corporate Administration and Support Subsidiary Airlines & Hotels CFO Airline Support & Related Business Corporate Shared Services SASAirline Subsidiary & Affiliated Airlines Airline Support Airline Related Hotels SAS Airline COO Braathens Spanair SAS Cargo SGS SAS Trading SFA Rezidor SAS Hospitality SAS Commuter Widerøe STS SFS Air Botnia World Sales SMART Affiliated Airlines Jetpak SIG Other 7 1 st Quarter growth in revenues driven by acquisitions MSEK Change Revenue % Operating result Pre tax profit SAS Group 2002 loss carry forward from 2001 EBIT MSEK million Q1 Q2 Q3 Q4 Q1/2002 EBIT (Earnings before financial items) Q1 in line with plan Q2 weaker Q3 even weaker! Q4 a disaster Q1 worst in SAS history hit hard by exceptionally weak Jan/Feb 9

4 200 1 st Q Group loss incurred mainly in January and February Sep Oct Nov Dec Jan Feb March EBT (Pre-tax profit) cap gains excluded Group losses incured in January/ February March almost flat even with Easter effect April traffic improvements noted (SAS Airline with Easter effect) Total traffic + 3% Business Class 1% 10 Growth in revenues driven by acquisitions EBITDAR down 50% in MSEK % % in MSEK Total Revenues EBITDAR 11 One-offs in the first quarter 2002 MSEK Adjusted result in Spanair Nov-Dec Passenger Traffic Øresund 58 ECA 113 TOTAL

5 Overview Group Result Improvement measures 2002/2003 short term Total group short term measures MSEK (Gross 2003 full year effect) Whereas Subsidiaries & affiliates MSEK SAS Airline MSEK Network reductions MSEK 500 Revenue enhancements MSEK Cost reductions MSEK Overview Group Result Improvement measures implementation according to set plan Short term measures Structural measures Expected result effect Expected result effect Expected result effect EBITDA by Business Area (MSEK) January - March SAS Airline Subsidiary & aff. Airlines Airline related Businesses Rezidor SAS Hospitality Group eliminations 0 0 EBITDA

6 SAS shares 16 SAS share price vs. Peers 2000-Apr 2002 SAS Market Capitalization vs. European Peers* measured in SEK (Rebase 29 DEC 2000) , , dec- jan- feb- mar- apr- maj- jun- jul- aug- sep- okt- nov- dec- jan- feb- mar- apr Index Peers Index SAS * Peers: Alitalia, Air France, British Airways, Finnair, KLM, Lufthansa &Rynair 17 Increased volume in SAS AB vs SAS Sverige AB Average daily number of shares traded in Stockholm per month SAS Sverige AB July August September October November December January February March 18 April SAS AB

7 19 Significant loss for SAS Airline (MSEK) January - March Passenger revenues Other revenues EBITDAR EBITDA Income before taxes Key airline drivers January-March 2002 vs 2001 Traffic growth (RPK) down 1.1% Cabin Factor up 1.3 p.u. Yields down 5.9% Unit costs up 8.9% 21

8 Economy Class traffic has recovered Business Class still weak Total Traffic 10% 5% 0% -5% -10% -15% -20% -25% July August September 1 October 3 November 5 December 7 January February 2002 March 2002 'April st quarter 2002 Total Traffic down 1,1 % Business Class down 17,9% Economy Class up 6,7 % Total Traffic Business Class 22 SAS Airline gain market shares on North Atlantic RPK change (%) North Atlantic Week SAS Week 01-week 17: SAS traffic up4,9% European airlines (AEA) traffic down 15,3 % AEA % 80% 70% 60% 50% Cabin factor (%) North Atlantic November December January February March April Month Airbus A340 introduced on New York March 1st Positive trend in cabin factors 23 Solid performance on Asian routes with Airbus 340 s RPK change (%) Asia Week 11 SAS 13 AEA % 80% 70% 60% 50% Cabin factor (%) Asia November December January February March April Month Week 01-week 17: SAS traffic up 20,9% AEA traffic down 4,4% New capacity incremental growth in RPK Stable cabin factors 24

9 In weak market SAS Airline gains market shares - Europe RPK change (%) Europe Cabin factor (%) Europe Week 11 SAS 13 AEA % 65% 60% 55% 50% 45% 40% November December January February March April Month Week 01-week 17: SAS traffic down 1,7% AEA traffic down 5,7% Cabin factor improved in Q1 Seasonal effect in Jan, Feb 25 Negative class mix - only partly offset by price increases 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% Class mix/ Route mix/ other Total system Jan-Mar 2001 Price CurrencyCurrencyNominal adjusted Yield Class mix/ Price mix affect negatively by 12% Weak business class More long haul traffic Prices up 6% overall Currency yield adjusted down 2% 26 Unit cost increase as volumes are weaker overhang of costs Index last year (currency adjusted) 10% 8% 6% 4% 2% 0% -2% -4% 1st Quarter nd Quarter rd Quarter th Quarter st Quarter 2002 Decrease of 2.2% 1 st Quarter Increase of 1.1% 2 nd Quarter Increase of 1.2% 3 rd Quarter Increase of 9,7% 4 th Quarter Increase of 8,9% 1 st Quater

10 Current outlook 2002 Rising crude oil prices has not fully hit Jet Fuel prices Average rates: USD/MT USD/MT Q USD/MT Current hedging ratio Next 12 months 43% Estimate Full year 2002 MSEK (Based on current levels) 28 Status short term Result Improvement measures according to plan In process/ implementation MSEK Additional measures MSEK 500 Total MSEK Result effects 2003 MSEK MSEK 1700 Estimated distribution: 1 st Quarter nd Quarter rd Quarter th Quarter Personell reductions well according to plan Full year effect ACT Plan JAN MAR MAJ JUL SEP NOV JAN MAR MAJ JUL SEP NOV 30

11 MAN LHR KRS MXP KN NCE SVG GOT HAU STR SVG STN SEA SFJ POZ PRG PMI SVO TLV OSL PEK ORD ORB TOS FRA TRD TRF NRK NRT TRD FCO NCE MXP MUC AES EWR VXO WAWROZRH VIE VNOVST MAN MADL IN LHR ALC ALF AMS ARN BDU BGO BOO BRU CDG CPH DUB DUS EVE AAL LED AAR AGPALCAMS ARN BCNBGO BHX BKK JKG KGD KSDKRK TLL TMP TKU SVO STN SFT SDL RNB GVA HAJ HAM HEL IAD TXL UME OSD OSL BLQ BRU BUD CDG CGN DEL DUB DUS EWR FCO FRA GDN GOT VNO VXOWAW OER ORD NCE MXP ZRH MMX AGH LLA LIN LHR DUB DUS EWR FCO FRA GOT GVA HAM HEL K I D KLR KRN KSD LED Structural improvement measures with effect from 2003> Production/Traffic System Product & Service/Price Concept Distribution Business Model and Management 5 areas of focus Production concept Product & services Distribution Management & Administrations Price concept 31 Changes in production process announced April 17 New production philosophy Improved aircraft utilization rates Capacity utilization Aircraft turn around Utilize peak/ off peak for maintenance etc. Potential approx. MSEK in savings 2003/2004 Includes closure of unprofitable Swedish domestic routes MSEK 350 Nytt koncept AMS BRUCDG CPH 32 Scandinavian Direct ready for implementation June 1, 2002 A new, easier and more intelligent way of travelling with SAS 33

12 Marketplace is caracterized by many campaigns and price initiatives from SAS SAS offer to London from Scandinavia 895,- Highly successful Excess capacity sold bookings so far! 34 Electronic Channels strategy volumes rose steadily to 23% 25% 20% 15% 10% 5% jan-00 mar-00 maj-00 jul-00 sep-00 nov jan 01-mar 01-maj 01-nov Q % Sold - Travel Pass, Travel Pass Corporate, ETIX, Internet Total volume E-channels in Q1 MSEK ,7% of total passenger sales in Q1 New web site to be launchedin June 35 36

13 Income Subsidiary Airlines & Affiliates Braathens fully consolidated (MSEK) January - March Passenger revenues Other revenues Operating revenues Operating expences EBITDAR Income before taxes Spanair consolidated as from March 2002 MSEK March2002 Passenger revenue 339 Other revenues 176 Operating revenues 515 EBITDAR 49 EBIT -46 Income before taxes -59 Transaction approved and fully consolidated as from March Spanish market generally weak Significantly increased yield 23% Closure of intercontinental traffic Focus on high yield markets 38 Spanair outlook 2002 Ceased long-haul operations as from March 2002 Improved mix Shift from low yield to high yield markets Cost reductions Capacity reductions Positive operating profit for

14 Braathens acqusition strategic for SAS Group Fully consolidated in SAS Group 2002 New route schedule as from April 2 Removal dubble functions Create profitability Synergies of MSEK 800 to be realized Secure feed to long haul 40 Braathens adequate result expected for 2002 January-March Passenger Revenue Other Revenues Operating Revenues EBITDAR Income before taxes Widerøe s flyveselskap and AirBotnia Weaker performance in Q1, but outlook for full year unchanged Jan March 2002 Total Revenues MSEK 586 (+14%) EBITDAR MSEK 83 (-13%) EBITDA MSEK 51 (-23%) Will as from winter schedule take over Stockholm- Turku/Tammerfors from SAS Airline Jan March 2002 Total Revenues MSEK 231 (+3%) EBITDAR MSEK 38 (+192%) EBITDA MSEK -1 (-114%) 42

15 43 Income Business Area Airline Related Business EBITDA down 22% MSEK January - March Operating revenues Operating expences EBITDA Income before taxes

16 REZIDOR SAS Hospitality negatively affected by weaker markets in MSEK Jan-Mar 2002 Jan-Mar 2001 Change Revenues ,7% Operating result Adjusted EBITDA Pre tax profit Including gains 46 REZIDOR SAS Hospitality REVPAR under pressure in weak Quarter SIH MSEK Q Q SEK mar Income before taxes REVPAR 47 Radisson SAS Brand Positioning in Europe Minimum Service Luxury First Class Malmaison Limited Service Country Inns Holiday Inn Scandic Novotel Marriott Hilton Sheraton Radisson SAS Four Seasons Regent Inter-Continental Hyatt Full Service Formula1 Ibis Mid-Priced economy Hard Budget 48

17 Radisson SAS current growth strategy Expansion in existing home markets Scandinavia, Finland, Germany Extend home markets to UK, France, Benelux & Poland Expand in capitals & other important cities - e.g. Athens, Barcelona, Cairo, Rome, Zagreb Extend into leisure & resorts Focus on airport hotels 49 Investments and Financial position 50 Rising gearing levels but in line with industry average 200% 150% 100% Leverage to peak during % 0% dec-98 mar-99 jun-99 sep-99 dec-99 mar-00 jun-00 sep-00 dec-00 mar-01 jun-01 sep-01 dec-01 mar-02 Net Debt / Equity Moody s Baa3 Stable rating Investment grade Net Debt / Equity Net Debt + NPV op lease / Equity 51

18 Development of net debt Average -92 MSEK Average -93 MSEK Average - 94 MSEK9.700 Average -95 MSEK Average -96 MSEK Average -97 Average -98 MSEK MSEK Average -99 MSEK Average -00 Average -01 MSEK MSEK4.700 Average -02 MSEK MSEK Including parents company from January,2000 Including Braathens from December, 2001 and Spanair from March, Firm Order CAPEX MUSD 1,240 Aircraft Orders Total Q2-Q4 CAPEX (MUSD) 1, Aircraft on order Airbus A340/330 6 Airbus A320/ Boeing dehavilland Q Clear targets to reduce indebt ness 2004 Current situation Loss situation and peak in investments and acquisitions Key figures Q1/02 vs Q1/01 Solidity: 21% (34%) Net debt/ equity 0,86 (0,17) Adj net debt to equity 1,82 (0,45) Financial position adequate, to be safeguarded Clear targets introduced Net debt to peak at MSEK end 2002 Targets 2004 Solidity >30% Net debt/ equity <50% Adj net debt/ equity <150% Surplus values in fleet reduced after Sep 11 Relesase of main assets: Properties Non-core subs 54

19 Outlook Outlook operating key figures - year 2002 Growth expectations reduced Further capacity adjustments planned Key figure Group SAS Airline ASK -9% -3% Frequencies -8% RPK -2% +3% Passenger yield (currency adjusted) n.m. flat Unit costs n.m. -2% 56 April figures includes all airlines in Group Group improved passenger load factorby 1,7 p.u. SAS Airline Business Class 0,9% - Economy Class +3,9% Passenger- Seat capacity Cabintraffic (RPK) (ASK) factor SAS Group Total -4,6% -7,0% 66,1% Intercontinental -1,7% -13,9% Europe -8,5% -8,8% Domestic and -1,7% 1,2% Intrascandinavian 57

20 March-April figures includes all airlines in Group Group improved passenger load factorby 3,4 p.u. SAS Airline Business Class -13,1% - Economy Class +6,8% Passenger- Seat capacity Cabintraffic (RPK) (ASK) factor SAS Group Total -5,4% -10,2% 66,7% Intercontinental -1,9% -12,1% Europe -5,2% -10,4% Domestic and -9,2% -8,4% Intrascandinavian 58 The Board of Directors Assessment for full year 2002: Result levels has passed the bottom Result improvement measures takes effect according to plan Forecast from February 12 maintained SAS Pre-tax profit before gains is expected negative 2002 but better than 2001 Cash flow from operations expected positive Sum up 1 st Quarter 2002 Industry has passed the worst Balance between supply and demand SAS Airline has forceful measures in process Short term 2002/2003 Structural 2003/2004 Braathens and Spanair expected to bring profits to Group

21 SAS Group Investor Relations on the Internet 61