THAI AIRWAYS INTERNATIONAL PCL PHATRA SECURITIES PCL Thai Tourism Day July 4, 2013 1 http://www.thaiairways.com/about-thai/investor-relations/en/investor.html
DISCLAIMER The information contained herein is intended to represent the Company s operating and financial position at a given point in time and may also contain forward looking information which only reflects expectations based on the prevailing geo-political, economic and non-controllable factors. Such information has been obtained from sources believed to be most reliable and the means in analyzing and preparation of such information for disclosure are based on approved practices and principles in the investment industry. The views are based on assumptions subject to various risks and uncertainties and no assurance is made as to whether such future events will occur, that projections will be achieved, or that the assumptions here-in are correct. Consequently no assurance is made as to the accuracy or completeness of information presented in this document. This document should not be construed as an investment guide or as an offer or solicitation of an offer to buy or sell equity shares or other securities issued by the Company. 2
Snapshot Company Q1 2013 % Change YoY Year 2012 % Change YoY Total Revenue (MTHB) 63,271 +11.8% 213,530 +9.9% Net Profit (MTHB) (Included FX) 8,283 +58.6% 6,230 +161.1% Assets (MTHB) 307,657 +9.3% 304,096 +11.0% Route & Fleet # of Aircraft (As of 31 MAY 13) 100* Frequency Flights per Week (Effective 31 MAR 26 OCT 13) 969 Destinations Served (Effective 31 MAR 26 OCT 13) 75 Countries Served (Effective 31 MAR 26 OCT 13) 37 Note: Including THAI Smile *Excluding : 4 B 737-400 & 2 ATR-72 leased to Nok Air 3
Operations Summary Q1 2013 JAN-MAY 2013 Unit 2013 2012 % Change YoY 2013 2012 % Change YoY Passenger Production MASK 21,051 19,953 +5.5% Passenger Traffic MRPK 16,802 15,605 +7.7% Cabin Factor % 79.8 78.2 +2.1% Passenger carried Million 5.69 5.16 +10.2% Passenger Yield (Inc. surcharge) THB/km 2.78 2.75 +1.1% 35,019 32,547 +7.6% 26,731 25,040 +6.8% 76.3 76.9-0.8% 9.14 8.43 +8.4% 2.70 2.72-0.7% Freight Production MADTK 1,258 1,196 +5.2% Freight Traffic MRFTK 641 651-1.6% Freight Factor % 50.9 54.4-6.5% Freight carried Tons 165,759 175,768-5.7% 2,061 1,966 +4.9% 1,062 1,083-2.0% 51.5 55.1-6.5% 273,722 281,958-2.9% Freight Yield (Inc. surcharge) THB/km 9.16 10.02-8.6% 9.10 10.04-9.4% Note : * Passenger yield is passenger - sales commission and discount / RPK Based on RCM report 4
Financial Performance 5
Financial Performance Performance Summary (Q1 2012 & Q1 2013) THAI and its subsidiaries (Units : MTHB) Q1'2012 Q1'2013 Total Revenue * 56,089 57,142 Total Expense 51,175 55,239 Foreign currency exchange (Loss) 527 6,129 Profit before income tax expense 5,441 8,032 Net tax expense (income) (200) 263 Net profits (loss) 5,224 8,283 * Excludes Foreign currency exchange 6
Financial Performance EBIT, EBITDA and Net Profit (Q1 2012 & Q1 2013) Units : MTHB Factors Impacting Q1 2013 Results Number of passengers higher than last year by 9.4% ASK grew by 5.5% but RPK saw growth of 7.7% over last year 2,260 MTHB Impairment loss for 2 A300-600 and 4 A340-500 aircraft FX Gain 6,129 MTHB from Baht strength. EBIT EBITDA NET PROFIT *NET PROFIT (Exclude FX) 7
Financial Performance Operating / Total Revenue (Q1 2012 & Q1 2013) Units : MTHB 70,000 65,000 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 387 119 0 1584 527 6,500 44,957 2,319 Operating Revenue 223 712 0 6129 5,849 47,552 298 119 2,389 0 Q1'2012 Q1'2013 Passenger Freight Mail Other activities Interest income Profitability on foreign currency exchange Other income Profitability on business acquisition Gain on reclassified investment * Exclude Interest income, FX, Other income, Profitability on business acquisition, Gain on reclassified investment - Operating revenue Q1 2012 = 53,999 MTHB - Operating revenue Q1 2013 = 56,012 MTHB 221 8 Total Revenue Revenue % Change % to Tot. Rev. Passenger 5.77 75.16 Freight -10.02 9.24 Mail 0.53 0.35 Other activities 3.05 3.78 Interest income 0.28 0.19 Other income 83.96 1.12 FX gain (loss) 1062.00 9.69 Profitability on business acquisition Gain on reclassified investment -100.00 0.00 100.00 0.47 Total Income 11.75 100.00 Total revenue Q1 2012 = 56,617 MTHB Total revenue Q1 2013 = 63,271 MTHB
Operating / Total Expense (Q1 2012 & Q1 2013) Operating Expense Financial Performance Total Expense Units : MTHB 60,000 1,185 5,158 40,000 2,977 1,466 2,352 5,111 5,505 8,324 1,044 4,779 3,255 1,458 2,422 5,262 % Change % of Expense YoY Tot. Exp. Personnel expense 18.13 15.17 Fuel and oil 0.06 36.77 Flight service expense 2.96 9.53 Inventories and supplies 2.96 4.38 20,000 20,326 20,313 Crew expense - 0.55 2.64 Maintenance/overhual 9.31 5.89 0 7,094 Q1'2012 Q1'2013 8,381 Personnel Fuel and Oil Flight Service Expense Inventory&Supply Crew Expense Aircraft Maintenance Depreciation Lease of a/c Other * Excludes Impairment losses, Finance costs and Share of profits of associates - Operating expense Q1 2012 = 49,587 MTHB - Operating expense Q1 2013 = 51,810 MTHB 9 Depreciation/amortisation - 7.35 8.65 Aircraft lease/spare parts - 11.87 1.89 Other expense 51.21 15.08 Total Expense 7.94 100.00 Total expense Q1 2012 = 51,175 MTHB Total expense Q1 2013 = 55,239 MTHB
Financial Performance Ratios Q1 2012 & Q1 2013 Ratios units Q1 2012 Q1 2013 Earnings Per Share (THB) 2.39 3.79 Book Value per Share (THB) 31.47 35.26 Price / Book Value (Times) 0.81 0.81 EBIT (MTHB) 4,623 4,443 EBITDA (MTHB) 9,781 9,222 IBD to Equity (Times) 2.1 2.0 Debt Service Coverage* (Times) 1.9 1.4 Interest Coverage (Times) 6.6 6.5 Operating Profit Margin (%) 8.6 7.9 Net Profit Margin (%) 9.7 14.8 *EBITDAR TAX / Interest + Rent + Long Term Debt Repayment - Refinance 10
Currency Break down Foreign Currency Exposure (As of Year 2012) Revenue Expense Outstanding loan 11
Debt Structure Proportion of Fixed and Float (As of MAR 2013) Before Swap After Swap Percentage of TOTAL (TOTAL = 156,694 MTHB) Percentage of TOTAL (TOTAL = 155,925 MTHB) Cost of funding = 3.20% Cost of funding = 3.39% 12
Looking ahead 13
100.0 Cabin Factor (%) Actual Looking Ahead Estimated (As of 28.6.13) Booking (As of 1.7.13) 80.0 73.0 73.6 70.4 77.3 79.0 78.4 78.3 71.5 75.5 79.7 78.7 71.7 73.5 76.7 78.3 78.8 80.4 80.3 75.8 66.4 68.2 70.0 60.0 40.0 Freight Factor (%) 70.0 60.0 50.0 52.1 61.5 54.0 49.7 54.7 54.4 56.4 55.8 Actual 54.1 52.2 50.4 55.3 56.7 55.6 51.6 47.2 51.1 54.7 52.8 52.1 Estimated (As of 28.6.13) 50.3 40.0 30.0 14
Company Facts 15
World Route Network THAI s Route Network International Route (Based on Traffic Program Information Summer Issue 2) 31 MAR 2013 to 26 OCT 2013 25 MAR 2012 to 27 OCT 2012 Countries 35 35 Cities 62 61 Frequency flight / Week 638 597 Seats/Week 396,068 355,566 16
Domestic Route Network THAI s Route Network MAE HONG SON CHIANG RAI CHIANG MAI PHITSANULOK KHON KAEN NAKHON PHANOM BURIRAM THAI BANGKOK Nok Air (Code Share) Domestic Route (Based on Traffic Program Information Summer Issue 2) 31 MAR 2013 to 26 OCT 2013 25 MAR 2012 to 27 OCT 2012 PHUKET KRABI SAMUI HAT YAI Cities 7 10 Frequency flight / Week 215 277 Seats / Week 112,371 134,495 17
Current Fleet: 100 Aircraft* 44% of O 34% of FL 22% of OL O=Owned FL=Financial lease OL=Operating lease (Note: Approximately) Aircraft Type A300-600 First Business Economy Total 36R1 1 N.A. 46 201 247 36R3 5 N.A. 28 232 260 A340-600 3461 6 8 60 199 267 6 FL A330-300 *Excluding: 4 B737-400 and 2 ATR-72 leased to Nok Version # of Aircraft # of Seat 3302 12 N.A. 42 263 305 3303 8 N.A. 36 263 299 3304 7 N.A. 36 263 299 3201 2 N.A. N.A. 174 174 A320-200 6 OL 3202 4 N.A. N.A. 174 174 A380-800 3801 4 12 60 507 4 FL B737-400 7341 5 N.A. 12 137 149 2 O, 3 OL 7442 5 14 50 325 389 7443 3 10 40 325 375 B747-400 7444 6 10 40 325 375 13 O, 4 FL 7445 1 9 40 325 374 Freighter 2 N.A. N.A. N.A. N.A. B777-200 7723 8 N.A. 30 279 309 6 O, 2 OL B777-200ER 77E1 6 N.A. 30 262 292 6 FL Current Fleet As of 31 MAY 13 Financial Method B777-300 7732 6 N.A. 34 330 364 6 O 18 7739 5 8 30 274 312 B777-300 ER 9 OL 77B1 4 N.A. 42 306 348 Total 100 71 656 4,657 5,819 43 O, 35 FL, 22 OL 6 O 10 O, 15 FL,2 OL
Aircraft Delivery Plan NEW A/C DELIVERY 2012 2013 2014 2015 2016 2017 TOTAL A380-800 3 (FL) (SEP/NOV/DEC) 3 (FL) (MAR/OCT/NOV) - - - - 6 B777-300ER 2 (OL) (AUG/OCT) 6 (OL) (MAR/APR/JUN/ JUL/AUG/OCT) 3 (FL) (JAN/JUL/OCT) 3 (FL) - - 14 A330-300 3 (FL) (FEB/SEP/OCT) 2 (FL) (JAN/MAY) - - - - 5 A350-900 - - - - 2 (OL) R 2 (FL) I 6 (OL) R 10 B787-9 - - - - - 2 (OL) 2 B787-8 - - 4 (OL) 2 (OL) - - 6 A320 (Thai Smile) 4 (OL) (JUN/AUG/AUG/SEP) 2 (OL)4(FL) (JAN/MAR)/(OCT/ OCT/NOV/DEC) 2 (FL) 5(OL) 3 (FL) - - 20 TOTAL 12 17 14 8 2 10 63 Average Fleet Age* 10.3 9.3 8.6 8.5 9.4 8.5 9.1 * Based on Leased A320 As at 31 DEC 2012 19 Note : OL = Operating leas / FL = Financial lease I = Intercontinental / R = Regional
Phase Out Plan PHASE-OUT PLAN 2012 2013 2014 2015 2016 2017 TOTAL B747-400 - 4 - - - 2 6 B777-300ER (Jet Airways) - 5 - - - - 5 A340-500 4 (MAY) - - - - - 4 B777-200 - - - - - 4 4 A330-300 - - 2 4-2 8 A300-600 2 (MAR) 4 5 - - - 11 B737-400 3* (JUL/JUL/OCT) 1* 2 1-2 9 ATR-72-2* - - - - 2 TOTAL 9 16 9 5-10 49 *Return from Nok Air As at 31 DEC 2012 20
THAI Smile Fleet Plan & Route Network THAI Smile based at Suvarnabhumi Airport Operates in domestic and regional secondary routes and synchronize with TG network. FREQUENCY* DESTINATION 14 Flights / week Bangkok - Macau V.V. 5 Flights / week Bangkok - Mandalay V.V. 21 Flights / week Bangkok - Udon Thani V.V. 17 Flights / week Bangkok - Phuket V.V. 14 Flights / week Bangkok - Surat Thani V.V. 14 Flights / week Bangkok - Krabi V.V. 14 Flights / week Bangkok - Ubon Ratchathani V.V. 7 Flights / week Bangkok - Chiang Mai V.V. 7 Flights / week Chiang Mai - Phuket V.V. Currently 6 aircrafts Airbus 320-200 (As at 31 MAR 2013) 2 Flights / week Bangkok - Ahmedabad V.V. 4 Flights / week Phuket - Kuala Lumper V.V. # of aircraft Fleet Plan (2012-2015) 2 Flights / week Phuket - Delhi V.V. 2 Flights / week Phuket - Mumbai V.V. Year 2012 4 International & Domestic Route* Total Year 2013 2 10 Countries 5 Year 2014 Year 2015 20 17 21 Cities 12 Frequency / Week 123 *Note: Based on Traffic Program Information Summer 2013 Issue 2 : Effective : 31 MAR - 26 OCT 2013
17 Aircrafts (As at 31 MAR 2013) 10 of Boeing 737-800 Nok Air Route Network Nok Air based at Don Mueang Airport Currently operates only domestic point-to-point 3 of Boeing 737-400 4of ATR 72 Coach Coach + Ferry Coach + Hi speed catamaran Route As at 31 MAR 2013 Total Domestic TG s Proportion of Shareholding increased from 39% to 49% (NOV 2011) Cities 20 Freq./Week 483 22
THAI s Upgrade and Retrofit Schedule # of Aircraft First Business Economy Progress B747-400 No. 7-12 6 All: Completed MAR. 2012 B747-400 No. 13-18 6 # 13-17: Completed APR 2013 # 18: By SEP 2013 B777-200 8 # 1-7: Completed MAY 2013 # 8: By JUN 2013 B747-400 Improved seats & new PTV in all classes B777-200 Installed in seat VDO in Y class 23
Internet Sales Ticket Sales Via Internet 12 % of Sales 11.38 11.83 10 8 6 4 11.02 8.69 5.80 3.55 10.46 8.77 8.81 8.78 8.89 8.20 8.09 7.95 8.81 7.78 8.58 7.65 8.27 7.26 8.03 7.79 7.77 7.63 6.76 7.32 7.33 7.18 5.97 6.01 5.69 5.16 5.31 5.34 4.98 5.00 4.80 4.68 4.51 4.26 4.15 4.15 3.81 3.63 3.34 3.28 3.25 11.44 8.76 6.03 2 Year 2009 Year 2010 Year 2011 Year 2012 Year 2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 24
e-services Check-in via Mobile (http://m.thaiairways.com) Check-in via Internet # of PAX 12,000 10,000 8,000 6,000 4,000 10,470 % 10.00 8.31 8.24 8.06 8.03 8.00 7.02 6.98 7.37 7.35 7.28 5.93 5.47 5.35 5.46 5.66 6.00 4.10 4.09 3.75 3.65 3.66 4.00 1.78 1.87 2.15 2.31 1.97 8.30 8.60 7.61 7.80 7.81 7.47 7.38 7.49 6.15 6.23 6.50 6.57 6.50 6.71 5.95 5.08 5.16 5.36 4.86 4.90 4.63 4.01 2.67 3.26 3.36 3.45 2.8 2.86 2,000 2.00 0 0.00 Year 2009 Year 2010 Year 2011 Year 2012 Year 2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 25
Fuel Management Hedging combined with fuel surcharge greatly mitigates fuel price fluctuation risk Monthly fuel hedging 2008-2011 - % of consumption by month Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul- 08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul- 09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul- 10 Aug-10 Sep-10 Oct-10 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 Jul- 12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul- 13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 0% 0% 0% 0% 3% 17% 3% 3% 7% 20% 23% 38% 41% 44% 44% 49% 35% 27% 13% 13% 17% 20% 27% 30% 44% 44% 44% 47% 47% 47% 51% 51% 51% 50% 50% 56% 67% 67% 67% 66% 66% 66% 69% 69% 69% 69% 69% 69% 80% 80% 80% 80% 80% 80% 73% 76% 79% 84% 84% 84% 93% 93% 93% 85% 85% 85% 90% 90% 90% 90% 90% 90% 26
Operating Statistics 27
(Million) Passengers Carried* Year 2011 Operating Statistics Q1 13 = 5.69 million (Increased 10.2% YoY) Year 2012 Year 2013 6.00 4.00 4.92 4.20 4.77 4.50 5.16 4.86 5.10 5.50 5.69 2.00 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 *Included THAI Smile Freight Carried Q1 13 = 165,759 tons (Decreased 5.7% YoY) (Tons) 190,000 160,000 Year 2011 Year 2012 Year 2013 172,749 174,570 175,708 177,173 168,199 170,625 165,110 166,187 165,759 130,000 100,000 Q1'11 Q2'11 Q3'11 Q4'11 28Q1'12 Q2'12 Q3'12 Q4'12 Q1'13
THAI s NO. of PAX By Class By Area JAN-MAY 2013 Non Revenue 2.7% First class 0.3% Business class 8.7% Premium economy class 0.2% Middle East 1.4% Australia 5.5% Europe 12.5% North Pacific 0.8% Africa 0.3% Non-Schedule 0.2% Economy class 88.1% Northern 30.7% Domestic 24.8% Southern 8.1% Western 11.2% Indo-China 4.4% Total passengers for JAN-MAY 2013 = 8.51 million Total passengers for JAN-MAY 2012 = 8.44 million 29
THAI Smile s NO. of PAX By Class By Area JAN-MAY 2013 Non Revenue 1.3% Business class 5.5% International 16.4% Economy class 93.2% Domestic 83.6% Total passengers for JAN-MAY 2013 = 635,527 30
Passenger* 100.0 80.0 ASK RPK C/F *Included THAI Smile 31 77.8 77.6 73.0 71.8 61.9 65.7 77.2 74.8 69.9 65.7 61.0 68.1 77.3 79.0 78.4 78.3 71.5 75.5 79.7 78.7 71.7 73.5 76.7 78.3 78.8 80.4 80.3 75.8 66.4 8,000 6,000 4,000 2,000 - Year 2011 Year 2012 (%) 60.0 40.0 20.0 - 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 Jul- 12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 (Million) Operating Statistics Year 2013 YoY (Month) YoY (Year to date) MAY'13 MAY'12 YoY% JAN-MAY'13 JAN-MAY'12 YoY% MASK 7,007 6,259 12.0 35,019 32,547 7.6 MRPK 4,653 4,477 3.9 26,731 25,040 6.8 Cabin factor (%) 66.4 71.5-7.2 76.3 76.9-0.8
Operating Statistics Freight Year 2011 Year 2012 Year 2013 (Million) (%) 80.0 60.0 53.7 56.6 60.1 58.0 57.8 57.7 55.1 54.2 56.1 56.3 55.2 54.3 49.7 54.7 59.8 56.4 55.9 54.1 52.2 50.4 55.2 56.6 55.5 51.6 47.1 51.1 54.6 52.7 52.1 600 400 40.0 200 20.0 - - 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 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 ADTK RFTK F/F YoY (Month) YoY (Year to date) MAY'13 MAY'12 YoY% JAN-MAY'13 JAN-MAY'12 YoY% MADTK 401 392 2.3 2,061 1,966 4.8 MRFTK 209 219-4.6 1,062 1,083-1.9 Freight factor (%) 52.1 55.9-6.7 51.5 55.1-6.5 32
Operating Statistics Passenger Yield (Including Fuel Surcharge) (THB/Km) 2.73 2.83 2.87 2.84 2.63 2.78 2.73 2.74 2.54 2.70 2.67 2.76 2.68 2.78 2.69 2.64 2.44 2.78 2.62 2.51 2.42 2.64 2.60 2.45 2.63 2.74 2.55 2.75 2.67 2.40 2.70 2.72 2.56 2.81 2.71 2.61 2.81 2.72 2.72 2.78 2.86 3.00 2.50 2.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 2010 Year 2011 Year 2012 Year 2013 Freight Yield (Including Fuel Surcharge) 9.66 9.70 10.11 9.08 9.42 9.87 9.06 9.46 9.10 9.00 8.91 9.30 9.65 9.08 9.89 10.09 9.95 9.65 9.53 10.01 9.60 9.30 9.82 9.53 9.84 10.00 9.60 9.37 9.95 9.80 9.62 10.17 10.10 10.02 9.72 10.01 9.33 9.44 10.15 9.47 (THB/Km) 10.00 9.00 8.00 7.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 2010 Year 2011 Year 2012 Year 2013 Note: Yield 2012 is passenger - sales commission and discount/rpk Based on RCM report 33
Aircraft Utilization Hours / Day / Aircraft Aircraft Utilization 34
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