Singapore Airlines Group Analyst/Media Briefing HALF YEAR FY2012-13 13 RESULTS 5 NOVEMBER 2012 THE PARENT AIRLINE 1H FY2012/13 RESULTS
THE PARENT AIRLINE COMPANY RESULTS 2Q & 1H FY12/13 2Q/12 $million Better/ (Worse) $million 1H/12 $million Better/ (Worse) $million Total Revenue 3,141 108 6,245 310 Total Expenditure 3,057 (113) 6,076 (194) -Fuel Cost 1,241 (72) 2,484 (100) - Fuel Hedging (Gain)/Loss (14) 24 11 (11) -Ex-fuel Cost 1,830 (65) 3,581 (83) Operating Profit 84 (5) 169 116 Operating Profit Margin (%) 2.7 (0.2) pt 2.7 1.8 pts Slide 3 THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE 2Q & 1H FY12/13 2Q/12 % Change 1H/12 % Change Available Seat-KM (million) 29,952 +5.8 58,938 +5.1 Revenue Pax-KM (million) 23,895 +6.5 46,934 +8.0 Passenger Load Factor (%) 79.8 +0.5 pt 79.6 +2.1 pts Slide 4
THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE 2Q & 1H FY12/13 2Q/12 % Change 1H/12 % Change Passenger Yield ( /pkm) 11.4-2.6 11.4-3.4 Passenger Unit Cost ( /ask) 9.1-1.1 9.1-1.1 Passenger Breakeven Load Factor (%) 79.8 +1.2 pts 79.8 +1.8 pts Slide 5 THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE Passenger Load Factor (%) 88 84 80 76 77.9 75.6 79.4 77.5 79.6 72 68 0 1H 08/09 1H 09/10 1H 10/11 1H 11/12 1H 12/13 Slide 6
THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE (%) 88 Passenger Load Factor Breakeven Load Factor 86.0 84 80 76 72 77.9 72.2 75.6 79.4 75.4 78.0 77.5 79.8 79.6 68 0 1H 08/09 1H 09/10 1H 10/11 1H 11/12 1H 12/13 Slide 7 THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE (%) 88 Passenger Load Factor Breakeven Load Factor 86.0 84 80 76 72 77.9 72.2 5.7 75.6-10.4 79.4 75.4 78.0 4.0-0.5 77.5 79.8 79.6-0.2 68 0 1H 08/09 1H 09/10 1H 10/11 1H 11/12 1H 12/13 Slide 8
THE PARENT AIRLINE COMPANY MONTHLY PASSENGER YIELD /pkm 14 2009-10 2011-12 2012-13 13 12 11.6 11.4 11 11.2 11.9 11.6 10 9 10.4 9.7 10.0 0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Slide 9 THE PARENT AIRLINE COMPANY FUEL PRICE AND EXPENDITURE - TREND Fuel Price before hedging Fuel Expenditure (before hedging) ($ million) (USD/BBL) 2,000 1,800 1,600 1,557 1,400 1,200 1,000 800 600 0 149 160 1,743 1,094 98 61 64 649 631 136 1,254 1,243 1,214 1,251 1,241 1,170 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 129 132 126 130 133 4Q 1Q 2Q 170 160 150 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 2008-09 2009-10 2010-11 2011-12 2012-13 Slide 10
THE PARENT AIRLINE COMPANY COST COMPOSITION 1H FY12/13 Others 19.7% Slide 11 Passenger Costs 5.4% +0.5% pt Handling Charges 7.1% +0.2% pt Staff Costs 13.2% +0.6% pt Aircraft Depreciation & Rentals 13.5% -1.9% pts Fuel 41.1% +0.6% pt THE PARENT AIRLINE COMPANY TOP 5 EXPENDITURE 1H FY12/13 Fuel 2,495 (+4.7%, +$111M) Aircraft Depr. & Lease Rentals 818 (-9.6%, -$87M) Staff Costs Handling Charges 801 (+8.4%, +$62M) 432 (+6.5%, +$26M) 1H FY12/13 1H FY11/12 Passenger Costs 330 (+14.6%, +$42M) ($ million) 0 500 1,000 1,500 2,000 2,500 3,000 Slide 12
THE PARENT AIRLINE COMPANY FUEL EXPENDITURE 1H FY12/13 ($ million) 2,600 2,500 +128 +11 2,495 (+111) 2,400 2,384 +61 2,300-89 2,200 2,100 Lower weighted average fuel price Stronger US Dollar Higher volume uplifted Hedging loss vs hedging gain 0 1H/11 Price Exchange Volume Hedging 1H/12 Slide 13 THE GROUP 1H FY2012/13 RESULTS
GROUP REVENUE 1H FY2012/13 ($ million) 4,000 3,750 3,578 3,500 3,250 3,777 2011/12 2012/13 +199 +5.6% 3,699 3,794 +95 +2.6% Half Year Revenue $7,571M Year-on-Year $294M +4.0% 3,000 2,750 0 Slide 15 Q1 Q2 GROUP EXPENDITURE 1H FY2012/13 ($ million) 4,000 3,750 3,706 3,567 3,500 3,250 2011/12 2012/13 3,723 +139 +147 +3.9% 3,576 +4.1% Half Year Expenditure $7,429M Year-on-Year $286M +4.0% 3,000 2,750 0 Slide 16 Q1 Q2
GROUP OPERATING PROFIT 1H FY2012/13 ($ million) 150 125 100 75 72 2011/12 2012/13 123-53 -43.1% 70 Half Year Op Profit $142M Year-on-Year $8M +6.0% 50 25 11 +61 (n.m.) 0 Q1 Q2 Slide 17 CONTRIBUTION TO GROUP OPERATING PROFIT 1H FY12/13 ($ million) 1H/12 1H/11 Change % Change Singapore Airlines 169 53 + 116 n.m. SIA Engineering 66 69-3 - 4.3 SilkAir 37 34 + 3 + 8.8 SIA Cargo (99) (31) - 68 n.m. Slide 18
GROUP NET PROFIT 1H FY2012/13 ($ million) 200 2011/12 2012/13 194 Half Year Net Profit $168M 150 100 78-104 -53.6% 90 Year-on-Year $71M -29.7% 50 45 +33 +73.3% 0 Slide 19 Q1 Q2 GROUP NET PROFIT 1H FY2012/13 ($ million) 300 250 200 150 100 239 Higher operating profit +8 Loss on disposal of aircraft vs gain last year -67 Return of capital from VAL last year -48 Higher share of profit from associates and JV +16 Lower net interest and others +20 168-71 -29.7% 50 0 1H/11 Operating Profit Aircraft Disposal Non- Operating Item Associates and JV Interest and Others 1H/12 Slide 20
GROUP RESULTS 1H FY12/13 EBITDAR Per Share ($) Earnings Per Share ( ) 1H/12 1.11 14.3 1H/11 1.23 20.0 Interim Dividend Per Share ( ) Net Asset Value Per Share ($) 6.0 At 30 Sep 12 11.04 10.0 At 31 Mar 12 10.96 Slide 21 BUSINESS OUTLOOK FOR THE 2 nd HALF YEAR
OUTLOOK High and volatile fuel price Weaker global economy Slide 23 FLEET DEVELOPMENT SIA SLK SCOOT Operating Fleet at 30 September 12 101 22 4 IN: Delivery of A333 + 1 - - Operating Fleet at 31 March 13 102 22 4 Slide 24
SIA FLEET DEVELOPMENT SIA Operating Fleet at 31 March 13 102 New deliveries from April 2013: Delivery of A330 (2013 onwards) + 14 Delivery of B773-ER (2013 onwards ) + 8 Delivery of A350 (2015 onwards) + 20 Delivery of A380 (2017 onwards ) + 5 Delivery of A350 (2017 onwards) + 20 Slide 25 SILKAIR FLEET DEVELOPMENT SLK Operating Fleet at 31 March 13 22 New deliveries from April 2013: Delivery of A320 (In 2013) + 2 Delivery of B737 (From 2014 to 2021) + 54 Slide 26
SCOOT FLEET DEVELOPMENT SCOOT Operating Fleet at 31 March 13 4 New deliveries from April 2013: Delivery of B787 (2014 onwards) + 20 Slide 27 GROUP CAPITAL EXPENDITURE FY13/14 FY14/15 FY15/16 FY16/17 FY17/18 Aircraft 1,250 1,850 2,950 3,150 3,950 Other Assets 250 250 200 200 200 Total 1,500 2,100 3,150 3,350 4,150 Slide 28
GROUP FUEL HEDGING POSITION Percentage hedged for period Oct 12 to Mar 13 43 (%) Avg hedged price for period Oct 12 to Mar 13 123 (USD/BBL - Jet Fuel) Slide 29 MEETING THE CHALLENGES
Group Portfolio Premium Full Service SilkAir (MI) Regional SIA (SQ) Regional, Medium and Long haul No Frills Slide 31 Group Portfolio Premium Full Service SilkAir (MI) Regional SIA (SQ) Regional, Medium and Long haul Integrated planning and operations Joint fleet and route planning, Yield management Sales and marketing Airport operations Outcome Cross-selling increased 25% Enabling growth No Frills Slide 32
Group Portfolio Premium Full Service The LCCs stimulate new traffic and tap new market segments No Frills Regional LCC Partner E.g. Tiger (TR) Scoot (TZ) Medium and Long haul Slide 33 Group Portfolio Premium Full Service Consistent no frills offering Interline relationship Potential codeshare? No Frills Regional LCC Partner E.g. Tiger (TR) Scoot (TZ) Medium and Long haul Slide 34
Group Portfolio Premium Full Service SilkAir (MI) Regional SIA (SQ) Regional, Medium and Long haul Distinct positioning at each end of market spectrum Lower risk of cannibalization No Frills Regional LCC Partner E.g. Tiger (TR) Scoot (TZ) Medium and Long haul Slide 35 Group Portfolio Our LCCs take market share from other players in product continuum Premium Full Service SilkAir (MI) Regional SIA (SQ) Regional, Medium and Long haul No Frills Other LCCs Regional LCC Partner E.g. Tiger (TR) Scoot (TZ) Medium and Long haul Other LCCs Slide 36
Group Portfolio Our LCCs take market share from other players in product continuum Premium Full Service SilkAir (MI) Regional SIA (SQ) Regional, Medium and Long haul Other Full Service Carriers Traffic through other hubs No Frills Other LCCs Regional LCC Partner E.g. Tiger (TR) Scoot (TZ) Medium and Long haul Other LCCs Slide 37 Network & Connectivity Network organic growth SQ/MI growth 7.0% SQ/MI ASK Y-o-Y Change (%) 6.0% 5.0% 4.0% 5.3% 5.7% 3.0% 2.0% 2.9% FY1011 FY1112 FY1213 (Apr-Aug) SQ+MI ASK Y-o-Y Change (%) Slide 38
Network & Connectivity China FY 2010 India Africa 8 points 73x weekly 10 points 77x weekly 3 points 12x weekly Indonesia Australia 9 points 118x weekly SIA Group 5 points 92x weekly Slide 39 Network & Connectivity China FY 2012 India Africa 13 points 116x weekly 8 points 73x weekly 11 points 96x weekly 10 points 77x weekly 3 points 14x weekly 3 points 12x weekly Indonesia Australia 11 points 136x weekly 9 points 118x weekly SIA Group 5 points 92x weekly 7 points 124x weekly Slide 40
Network & Connectivity Airline partnerships Fill gaps in network Compete against other partnerships STAR Alliance starting point Additional partnerships beyond STAR Slide 41 Network & Connectivity New and deepened partnerships since 2011 Slide 42
Product Leadership and Service Excellence We will remain at the forefront of airline product innovation and service excellence Slide 43 Product Leadership and Service Excellence Highlights of New Initiatives Aircraft Cabin and Seats BMW DesignworksUSA First Class James Park Associates Business Class Introduced with new deliveries of Boeing 777-300ERs (2H 2013) Slide 44
Product Leadership and Service Excellence Highlights of New Initiatives Inflight Entertainment System USD 400m investment and launch customer for Panasonic Avionics next-generation system In-flight connectivity on long haul aircraft (progressively from April 2012) Slide 45 Product Leadership and Service Excellence Highlights of New Initiatives SilverKris Lounges (SKL) Ong & Ong developing new design concept for SKL $20 million investment in next 5 yrs for all lounges Commencing with Sydney SKL (from mid 2013) Slide 46
Product Leadership and Service Excellence Highlights of New Service Initiative Customer Experience Management (CEM) Vision is to develop a 360 0 view of our customers Deliver proactive and personalized services at more touch points Take SIA s service leadership to a higher level Slide 47 Product Leadership and Service Excellence 3-Pronged Strategy To Deliver the CEM Vision Leveraging on new systems & tools IT enabler Use of mobile technology Streamlining of processes & procedures Align internal processes with the CEM vision Soft skills training Launch of a new service theme Creating Extraordinary Moments Slide 48
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