SAS Group 3rd Quarter 2000 Analyst meeting

Transcription

1 Group 3rd Quarter 2000 Analyst meeting Oslo, November 10, Contents of 3rd Quarter 2000 presentation The Quarter in brief International Hotels Business review Result improvement program Outlook Appendices 2 The Quarter in brief 3

2 Group Summary 3rd Quarter Significant traffic growth in both classes Rising yields Passenger load factors sharply up Unit costs down except Jet Fuel International Hotels develops well Nordic Travel Hub launched One share in progress 4 Other events of note 3rd Quarter to date Group SIH in cooperation with Malmaison SIH sold Düsseldorf hotel Aeroexchange Business to Business site launched Star-NET launched expands winter traffic program 5 Key airline profitability drivers Traffic growth (RPK) up 7,6% Cabin Factor up 4,1 p.e. Yields up 0,9% Unit costs up 0,6% Aircraft capacity costs up 16,4% 6

3 Financial results - 9 months 2000 Group MSEK Change Revenue % Op. inc. bef. depr % Financial net Gain on sales Pre-tax profit % 7 Financial results - 3rd Quarter 2000 Group MSEK Change Revenue % Op. inc. bef. depr % Financial net Gain on sales Pre-tax profit % 8 Passenger revenue analysis vs Last year Q3 Ch. 9m Ch Revenues % ,5% Volume +8,9% +7,6% Yields +2,9% +0,9% Currency +0,3% -1,0% 9

4 Rising yields and positive mix 3rd Quarter Group Traffic growth (RPK) up 9% Business Class (RPK-C) up 12% Cabin factor up 5,3 p.u. Yields up 2,9% EBITDAR up 32% 10 Group From EBITDAR to market based EBIT MSEK Change EBITDAR % Gain on sales Depreciation =MV aircraft Leasing (40%) EBIT, market % 11 Cash flow from operations (EBITDAR) up 31% Jan-Sep 2000 MSEK Change Revenue % EBITDAR % Group Pre tax profit ex gains Pre-tax profit % 12

5 Improved EBITDAR and EBITDAR margin MSEK Change Revenue % EBITDAR % Group EBITDAR 11% 9% margin True a/c depr EBIT, market % 13 True aircraft depreciation positively affected by strong USD MSEK Booked depreciation Gain on sales =MV aircraft Leasing (40%) True aircraft depreciation Group 14 CFROI - close to target Group 35% 30% 25% 20% 15% 10% 5% 0% CFROI Hurdle rate CFROI Group's key financial metric Focus on operating cash flow (EBITDAR) CFROI 9m/ % Hurdle rate through cycle >17-20% 15

6 Capital employed vs market adjusted capitaldevelopment Group SEK Million Surplus values aircraft NPV Operating leases Interest bearing assets Capital employed Market adj capital 16 ROCE (m-b) - affected by large increases in aircraft surplus values Group 30% 25% 20% 15% 10% 5% 0% ROCE, Market based Hurdle rate ROCE Affected by strong USD market based ROCE 9m/ % Hurdle rate through cycle >12% 17 International Hotels 18

7 Strong profit trend in SIH Income before taxes (MSEK) m/1999 9m/2000 PBT Gains SIH No. of hotels Radisson Hotels & Resorts - one additional hotel sold 3rd Quarter Owned Leased Managed Franchised SIH aquire Malmaison hotel chain 2 new hotels added 134 hotels in total Managed: 75 Leased: 28 Owned: 2 Franchised: 29 SIH 20 Radisson Hotels & Resorts - continuous positive value creation SIH 22% 19% 16% 13% 10% 7% 4% ROCE International Hotels H1/00 GOP up from 30,2 to 32,0% ROCE up from 11,5% to 19,2% 21

8 DEC94 JUN DEC95 JUN DEC96 JUN DEC97 JUN DEC98 JUN DEC99 JUN Business review Airline 22 Business highlights - 3rd Quarter Capacity flat Strong traffic growth in both classes Sharply improved passenger load factors Strengthened home market position Historically high fuel costs Result improvement program as planned 23 Sharp increase in passenger load factors - growth trend in Business Class RPK Business Class Passenger load factor total system Year on Year values Moving 12 months values 25% 20% 15% 10% 5% 0% -5% -10% 68% 67% 66% 65% 64% 63% 62% -15%

9 Passenger load factor Strong traffic growth on Intercontinental routes October Passenger load factors North Atlantic/ Asia Month North Atlantic NOV Asia Positive traffic mix Yields up 4,9% Passenger load factors close to 90% Traffic "spill off" New capacity essential on long haul 25 Growth vs LY Index European routes - strong October Business Class/ Economy Class Month Economy Class NOV Business Class Strong traffic growth but compared to a very weak Q3 in 1999 Positive passenger mix Business class up 13,5% in Q3 Economy Class up 8,1% 26 Danish routes affected by aircraft introductory problems October 2000 Passenger load factor Passenger load factor NOV Month Danish domestic Continued capacity reductions Passenger load factor significantly improved Introductory problems dehavilland Q400 27

10 Norwegian domestic routes - weak overall development October 2000 Passenger load factor Passenger load factor NOV Month Norwegian domestic Total market continued weak New passenger charges to be implemented Seating reservation implemented gain market shares 28 Growth vs LY Index Swedish domestic routes strong October Business Class/ Economy Class Economy Class NOV Month Business Class Strong Swedish economy Continued strong growth Arlanda-Gothenburg and Arlanda-Malmö gain shares from secondary airport Bromma Arlanda Express Train stimulates traffic Boeing introduced RPK Growth affiliates continue to add traffic growth 2000 vs 1999: 9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 9m 2000 Total & Partners (excl STAR) Q3/2000 vs Q3/1999: RPK up 8,6% Total RPK growth & Partners 11% 30

11 Yields significantly up in 3rd Quarter Total system - currency adjusted 4% 3% 2% 1% 0% -1% -2% -3% -4% Q3/99 Q3/00 Rising Jet Fuel starting to spill through Overall yields up 2,9% in Q3, 0,9% YTD Positive mix in Q3 31 Passenger Yield 3rd Quarter 2000 vs 1999 Route Sector Nominal Currency Adjusted Scheduled yield effect yield Total Intercontinental Europe Intrascandinavian Denmark/Greenland Norway Sweden Currency Adjusted Yield vs Last Year Total System January - September 2% 1% 0% -1 % -2 % -3 %

12 Cargo business - yield drop has stopped New Global Cargo has been initiated Weak European demand January-September 2000 Revenue ton-km up 6% Revenues up 6% 34 Favorable unit cost development except jet fuel Index Last Year 3% 2% 1% 0% (1% ) Increase of 0,6% January-September 2000 Down 3,2% adjusted for fuel costs (2% ) (3% ) Unit Cost Effected by Fuel January - September 2000 vs 1999 MSEK Adjusted Share of Var. % total var % Commissions % 0.0% Fuel (47.5%) (3.8%) Government charges % 0.5% Personnel % 0.5% Other oper. net costs % 2.2% TOTAL (0.6%) (0.6%) Volume = average growth in ASK and RPK = 4,3% 36

13 Unit Cost 3rd Quarter 2000 vs 1999 MSEK Adjusted Share of Q3/99 Q3/00 Var. % total var % Commissions (6.2%) (0.4%) Fuel (42.7%) (3.8%) Government charges % 0.7% Personnel % 0.7% Other oper. net costs % 3.4% TOTAL % 0.6% Volume = average growth in ASK and RPK = 4,6% 37 US Dollar per Barrel Estimated jet fuel expense for full year 2000 raised to MSEK Brent Crude vs. Jet Fuel November November Spot Jet Fuel up 12 % since prognosis given in August 2000 Crude oil /Jet Fuel differential has not decreased as anticipated Further strengthening of USD vs SEK 38 Result Improvement Program 39

14 Result Improvement Program 1999/00 MSEK 2150 achieved as of 3rd quarter 2000 Increased pace during rest of year 2000 Area Achived effect vs Cargo 90 MSEK Catering & In-flight service 300 MSEK IT & communications 130 MSEK Distribution & Electronic channels 610 MSEK Air crew 380 MSEK Ground handling 210 MSEK Technical maintenance 200 MSEK Overhead & other 230 MSEK Total 2150 MSEK 40 Electronic Channels - current volumes of total sales first 9 months 2000 Travel Pass TPC (new in 1999) E-TIX Other Internet Total volume E-channels MSEK % of total passenger sales 41 Outlook

15 Macroeconomic outlook ' main markets - a general softening Sweden: Export, consumption and GDP somewhat weaker Norway: GDP 2.5-3% Int. rates uncertain Denmark: Better growth UK: Slightly weaker GDP +2-3% Euroland: Germany & Italy catching up 43 US: Soft landing? GDP +2-3% (down.) Japan: Slightly better but from low level Asia excl.. Japan: Continued recovery in most regions October traffic figures- slightly lower growth Continued positive passenger mix Business Class +8,2% - Economy Class +4,0% Passenger- Seat capacity Cabin- traffic (RPK) (ASK) factor Total +5,3% +3,0% +1,5 p.u. Intercontinental +1,2% +0,8% Europe +7,7% +4,5% Domestic and +7,7% +3,4% Intrascandinavian 44 expands winter traffic program Capacity up 9% on European & Intrascandinavian routes Birmingham, U.K. Active business and industrial area Copenhagen efficient for Eastbound flights Week-end Palma de Mallorca, Spain Spare capacity Increased capacity on Dublin, Zurich, Paris, Tel Aviv, Budapest, Hamburg and St. Petersburg Capital triangle 45

16 Operating key figures - year 2000 Increased traffic growth scenario Rising yields Underlying unit costs down Key figure ASK Frequencies 2000 Up approx 2,5% Up 1% RPK Up approx. 8% Passenger yield (currency adjusted) Up 1-2% Unit costs Up 1-2% 46 The Board of Directors Assessment for full year 2000: Full year forecast from February 17 maintained Reduced unit cost except jet fuel Jet fuel expense estimated at MSEK 3700 for 2000 as a whole Income before taxes ex gains - around MSEK