SAS Group Asia Tour Financial Hearing Presentation May 14, 2012 1
This is the SAS Group 128 destinations 27,2 million passengers 28 new routes to be launched 2012 1,085 daily flights Revenues 2011, MSEK 41,412 128 destinationer 2
Improved customer position New advantage achieved as Europe s most punctual airline Europe s most punctual airline three years in a row 2009, 2010 and 2011 World s most punctual airline in July and August 2011 All-time high perceived punctuality among customers Innovative and award winning onground solutions that saves passengers time 352 163 flights on time in 2011 (88.9%) (Departure within 15 min) Innovative and time-saving solutions SAS Fast Track World class punctuality 3
The SAS Group is the Nordic s leading airline group - increasing presence in Asia Key advantage in corporate accounts Introduction of new regional partner concept Codeshare ANA from May 2011 Closer cooperation with Singapore Airlines Launch of Copenhagen-Shanghai (March 2012) Oslo-Stockholm SAS 18 Largest competitor 10 Copenhagen-Stockholm Europe SAS Star Alliance: 980,000 Star Alliance SAS: 1,140,000 Asia SAS Star Alliance: 70,000 Star Alliance SAS: 120,000 SAS 20 North America SAS Star Alliance: 290,000 Star Alliance SAS: 220,000 Africa SAS Star Alliance: 10,000 Star Alliance SAS: 30,000 Largest competitor 8 South America SAS Star Alliance: 1,000 Star Alliance SAS: 20,000 Scandinavia/Regional SAS Regional network: 390,000 Regional network SAS: 140,000 4
While the macro environment in Europe is weak, traffic to/from is Asia growing GDP growth 2012 35 Total international traffic China Europe Norway 30 25 20 15 Low comparable figures due to ash cloud in 2010 AEA SAS Sweden 10 5 Denmark 0 Asia Pacific -5 0 5 10-5 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-12 Jan-12 Feb-12 Mar-12 5
Successful opening of Copenhagen- Shanghai in March 2012 55 45 35 25 15 5-5 -15-25 Traffic to/from Asia Earthquake in Japan Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-12 Jan-12 Feb-12 Mar-12 Apr-12 AEA Introduction of Copenhagen- Shanghai SAS SAS offering fastest connection to most Scandinavian destinations More than 15 transfer connections at Copenhagen under 2 hours Award winning three class product Business Class, Economy Extra and Economy Class Will increase SAS market share on the Chinese market 6
The Nordic region s traffic has grown 148% to/from Asia-Pacific since 2000 Source: Airbus, OAG, traffic as of month of September
Traffic will continue to grow as the trade with Asia becomes increasingly important Asia is Sweden s second largest export region 10% 3% Export from Sweden* 13% 1% Europe America Oceania and Antarctica Africa Asia 73% Traffic to/from and within Asia to develop fast Nordic region traffic expected to grow faster than other developed regions % 8 7 6 5 4 3 2 1 0 Forecast Annual traffic growth 2011-2030 Source: SCB, Jan-Feb 2012 Source: Airbus
Nordic-Asia is the 5 th largest traffic flow from Europe 16 14 12 10 8 6 4 2 0 Passengers to/from Asia, 2011 (mill.) More than 55 million passengers in 2011 Approximately 3.5 million passengers flying between Asia- Nordic Value of traffic flow between Europe- Asia in 2011 more than USD 43 billion Nordic-Asia traffic value above USD 2 billion in 2011 Nordic traffic flows 4 th largest on the destinations that SAS is serving 9
Prolonged high jet fuel prices is a major challenge for the industry Jet fuel, spot price development, USD 1 600 1 400 1 200 1 000 800 600 400 200 0 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Policy to offset fuel price volatility Hedging 40-70% of expected consumption (12 months rolling) Up to 18 months hedging allowed Yield management Cost initiatives SAS Current hedges 49% of the consumption hedged for next 12 months Only swaps and options Value of hedging portfolio on 31 March at MUSD 22 10
has resulted in weak results for European airlines in Q1 2012 EBIT-margin, Jan-Mar 2012 - -5 EUR -76 EUR -597 EUR -98 EUR -381-10 -15-20 -25-30 Norwegian Air France/KLM SAS Group Lufthansa 11
SAS award winning three class product to/from Asia Bangkok Beijing Shanghai Tokyo
Stay connected with SAS You will be able to browse the internet and use your cell phone to stay connected above 10 000 feet! WiFi Internet, a shared connection of 12 Mbps GSM* telephony (starting 2012) Send and receive SMS text and MMS messages Use GPRS services Receive and make voice calls * GSM: Global System for Mobile Communications, digital cellular networks. 13
The new SAS look and feel
The new SAS look and feel: Copenhagen lounge exterior today
The new SAS look and feel: Potential new look, Copenhagen lounge
The new SAS look and feel: Malmö Airport before
The new SAS look and feel: New look today, Malmö Airport after
Modernization of fleet well in progress SAS main Airbus A330/340-300 Scandinavian Airlines Airbus A319/A320/A321 Scandinavian Airlines Boeing 737-600/700/800 Scandinavian Airlines SAS being fased out, no later than 2013/2014 Boeing 737-400/500 Scandinavian Airlines MD-82/87 Scandinavian Airlines 3% increased short-haul production 2012 with one aircraft less in operation Widerøe & Blue1 dehavilland Q 100/300/400NG Scandinavian Airlines Boeing 717 Scandinavian Airlines The SAS Group recently signed additional three A320 on lease. In total, SAS is phasing in 30 modern aircraft that will completely replace older generations until 2013-2014. 19
The new SAS look and feel: onboard. From this
to this
SAS has the largest loyality program in Scandinavia competitive advantage Loyality program 2.8 million EuroBonus members 51 000 new EuroBonus members in Q1 2012 (1,8%) Corporate program 28.000 members in SAS Credits 1 350 new SAS Credit members in Q1 2012 (4,8%) 40,000 members in Asia New Partnerships Increased attractiveness 10 for 1 * Norway Domestic *) Variations apply 22
Strong focus on cost reductions - unit cost reduced 23% versus 2008 23% unit cost reduction (excluding jet fuel) Total cost reduction SEK 7.8 bn (-24%) where of realized SEK 6.9 bn in 2011 Still a cost gap of 20-25% to be handled Cost reduction (excl jet fuel) 2008-2011 Scandinavian Airlines -23% 30,1 6,9 Currency adj cost base 2008 Net cost reductions 2008-2011 23,2 Actual cost base 2011 23
4Excellence comes together Commercial Excellence Sales Excellence Operational Excellence People Excellence 4Excellence 24
New strategy 4Excellence is starting to provide effects SEK 1,5 bn Revenue activities Improved route result vs 2011 New airport design being rolled out EuroBonus members continues to grow SEK 3,5 bn Cost activities New distribution platform implemented SEK 1 billion union agreements secured and 300 FTE admin reduction on track Sale of properties completed 25
Drivers and Performance - development Q1 2012 Customer Performance Passenger growth Customer satisfaction Operational Performance Punctuality Unit cost (CASK) Financial Drivers Fuel price RASK and Yield Financial Performance Cash flow Financial Preparedness SAS Result (EBT) 26 26
Continued strong financial preparedness Financial preparedness Q1, SEK billion 8.6 4.9 3.7 Q1 2012 Credit facilities Cash SEK 8.6 billion in total financial preparedness SEK 4.9 billion credit facilities SEK 3.7 billion cash Good financial preparedness Further improved by property transaction 27
Thank you! 28