1q07 results presentationri.voegol.com.br/arquivos/gol_apresentacao_1t07_eng.pdfgti s.a. domestic...
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1Q07 Results PresentationApril 20, 2007
2This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
LowerCosts
HigherLoad Factors
LowerFares
HigherProfit
Growth
Brazil’s Low-Cost, Low-Fare AirlineBrazil’s Low-Cost, Low-Fare Airline
GOL’s MissionTo be recognized by 2010 as the airline that popularized high-quality,
low-fare air transportation
GOL’s MissionTo be recognized by 2010 as the airline that popularized high-quality,
low-fare air transportation
3This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
Highlights 1Q07Highlights 1Q07
Net income of R$ 116.6 million in 1Q07Pre-tax income margin of 15% (R$160 MM)
Lowest Cost Provider (CASK = R$13.1 cents / ASK)
Worldwide reference in Profitability (Net margin LTM = 11%)
Stimulating demand (industry RPKs growing 12% +)
One of highest industry growth rates in world
Solid Growth in 1Q0722 additional flight frequenciesLoad factor: 70%Volumes (RPK) grew 60% y-o-yAverage market share 1Q07:• 39% domestic• 18% international
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GOL Webcast 1Q07
MacapMacapáá
FortalezaFortaleza
NatalNatal
RecifeRecife
CuiabCuiabááSalvadorSalvador
VitVitóóriaria
Porto SeguroPorto Seguro
Campo GrandeCampo Grande
AssunAssunççãoão
Panama City
ManausManaus
MaringMaringáá
São LuisSão Luis
Boa VistaBoa Vista
Buenos AiresBuenos Aires
Rio BrancoRio Branco
Joao PessoaJoao PessoaPorto VelhoPorto Velho
Porto AlegrePorto AlegreRosarioRosario
Caxias do SulCaxias do Sul
AracajuAracaju
Santiago Santiago
TeresinaTeresina
LimaLima
GoiâniaGoiânia
Campina GrandeCampina Grande
PetrolinaPetrolina
CampinasCampinas
Santa CruzSanta Cruz
BelBeléémmSantarSantaréémm
Montevideo
Rio de Janeiro
Sao Paulo
Cabo Frio
IlhIlhééusus
Ribeirão PretoRibeirão Preto
CordobaCordoba
FozFoz do Iguado IguaççuuLondrinaLondrina
Juazeiro do NorteJuazeiro do Norte
CuritibaCuritibaJoinvilleJoinville
ChapecChapecóó
B. HorizonteB. Horizonte
ImperatrizImperatriz
PalmasPalmas
BrasBrasíílialia
MarabMarabáá
Florianópolis
Pres. Pres. PrudentePrudenteUberlandiaUberlandia
CruzeiroCruzeiro do do SulSul
Sao J. Rio PretoSao J. Rio Preto
São José dos Campos
January 2006
January 2001
January 2005January 2004January 2003January 2002
January 2007
Future routesApril 2007
Caracas
BogotBogotáá
Navegantes
New Markets Increase in Fleet
Lima - LIM - 12-feb-07Population: 8.4mm inhabitants
GIQ - 17/Feb - #66(737-800)
GTL - 28/Mar - #67(737-800 SFP)
Highlights 1Q07Highlights 1Q07
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GOL Webcast 1Q07
Capacity and Network Expansion Capacity and Network Expansion Flights/Day
Number of Operating
Aircraft(average)
RPK (MM)
ASK (MM)
4Q06 1Q07 Dec/06 Mar/07
600630
+5.0%
+53.0%
450+40.0%
Mar/061Q06
+11.5%
5966
43
4Q061Q06 1Q07
3,066
4,1234,894
+59.6%
+18.7%
4Q061Q06 1Q07
4,340
6,0707,010
+61.5%
+15.5%
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GOL Webcast 1Q07
2007E Capacity Growth2007E Capacity Growth
Company Brand Markets ASK Growthy-o-y (07-06)
GTA S.A. Domestic +33%International +214%Total +50%
GTI S.A. Domestic -34%(VRG S.A.) International -65%
Total -54%
GLAI S.A. Domestic +15%(Consolidated, International -27% pro-forma) Total +0%
7This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
2007E Capacity Breakdown 2007E Capacity Breakdown
2007 Domestic ASK Growth
-34%
+33%+19-21%+25%
Others, net Industry
2007 Domestic ASKs and RPKs (billions)
24
4
39
67
18
2
25
46
Others, net Industry
ASK RPK
+35%
+12%
+13-15%
Growth in RPKs (y-o-y)
-41%
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GOL Webcast 1Q07
Net RevenuesNet Revenues
Net RevenuesR$ MM
Stimulating Higher Volumes (1Q07 vs 1Q06)
RPK: +59.6%Average Fleet: +53.0%ASK: +61.5%Load factor: -0.8 p.p. → 69.8%
Driving Fares Lower (1Q07 vs 1Q06)
Average Fare: -21.8%Yield: -26.4%RASK: -25.3%
Growing Ancillary Revenues (1Q07 vs 1Q06)
R$ 65.9MM (98.8% increase over 1Q06)80%+ Contribution margins
1Q07
863.01,041.3
+20.7%
1Q06LowerCosts
HigherLoad Factors
LowerFares
HigherProfit
Growth
9This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
Infrastructure
Airports
Airways
R$ 3 bn to be invested in airport infrastructure until 2010Projects completed or underway in CGH, GRU, BSB, SDU, POA~500 controllers by the end of 2007~66 additional controllers by May-June
Flight Cancellations
Ticket Sales (mm)
Demand Suppression
Dec6%
Jan4%
Feb14%
Mar3%
Current Operating ChallengesCurrent Operating Challenges
Improvements
Dec1.3
Jan1.0
Feb1.5
Mar1.2
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GOL Webcast 1Q07
CASK(R$ cents)
1Q06 1Q07
EBITDAR R$ million
1Q06 1Q07 1Q06 1Q07
RASK(R$ cents)
EBITDAR Margin
Profitability - 1Q06 x 1Q07Profitability - 1Q06 x 1Q07
302.8 248.9
19.88
14.85
-25.3%
-17.8%
14.73 13.06
CASK Ex-Fuel -10.8%
-11.3%
35.1%24.0%
1Q06 1Q07
5.86 5.15
-12.1%
Fuel ASK
USGAAP
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GOL Webcast 1Q07
Net Financial ResultsNet Financial Results
Investment of Higher Cash Balances• US$ 862.6 of cash invested • Average earning rate of 12.7% in BRL
Increase in Long-term Financing• Increase in average maturity to 6.3y• Average interest rate of 7.3% in USD
Financial Expense (R$ MM)
Financial Income (R$ MM)
1Q07 Net Financial Results: R$34.6 MM
1Q071Q06
1Q07
3.3
27.0+728.2%
1Q06
34.088.6+160.8%
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GOL Webcast 1Q07
Net Income CompositionNet Income Composition
Net Income1Q07
Net Income1Q06
TaxesNet
Financial Results
Net Revenues Fuel Costs
Commercial Expenses
Other Operating Expenses
-35.2%
Salary Expenses
1Q07 EPS: R$0.59/shareUS$0.29/ADSNet Income Margin: 20.8% Net Income Margin: 11.2%
116.6179.8
-50.6
+9.8
+178.3
-22.7
-107.0
-142.1+25.7
R$ million USGAAP
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GOL Webcast 1Q07
Cash Flow EvolutionCash Flow Evolution
Operating Activities
4Q06Cash, Cash
Equivalents and Short-term
Investments: 912.8
Net Increasein Cash (1Q07)
Investing Activities
Financing Activities
1Q07Cash, Cash
Equivalents and Short-term
Investments: 1,962.3+256.0
-25.8
-188.5
+470.3
R$ million USGAAP
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GOL Webcast 1Q07
VRG AcquisitionVRG Acquisition
Consideration:Total amount: R$ 275MM
• Cash: R$ 98MM• Shares: 6.1MM
Rights Offering:Shares: 2.5MMPrice:
• R$ 60.81 / share• US$ 31.44 / ADS
Record Dates:• PN Shares: April 11, 2007
• ADSs: April 19, 2007
Subscription Periods:• PN Shares: April 11 - May 21, 2007
• ADSs: April 23 - May 16, 2007
15This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
Low-Cost Operating PlatformLow-Cost Operating Platform
Modern all 737 fleet
Direct flights
Mileage program
In-board service
Business / Corporate
Modern all 767 fleet
Dual-class service
High–traffic routes
Prime destinations
Mileage program, lounges
Low fares
Differentiated domestic services
Domestic International
Innovative international servicesVRG S.A.
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GOL Webcast 1Q07
OpportunitiesOpportunities
Improved Revenues
Complimentary route networks; limited overlap
Optimize route network; maximize aircraft utilization
More effective customer segmentation
Accelerated growth opportunities
Improved scale
“Smiles” loyalty program - base of almost 6 million users
Fleet commonality; maintenance and cost synergies
Upgrade long haul - 767s better suited
Commercial costs
IT / systems
Leverage of fixed costs
ReducedCosts
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GOL Webcast 1Q07
Domestic ServiceDomestic Service
FEN
FOR
MCZREC
MAO BEL
POACXJ
BSB
VIX
SDU
CGH
FLN
SSA
CWB
CNF
GRU
GIG
Highly punctual
Direct flights
Differentiated on board service
Business-oriented
Mileage / lounge revenues
Low-cost platform
Differentiated Value Proposition
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GOL Webcast 1Q07
International ServiceInternational Service
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Low-cost platform
Low fares
Mileage / lounges
Dual-class service
First-rate business + tourist destinations
Differentiated Value Proposition
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GOL Webcast 1Q07
Differentiated BrandsDifferentiated Brands
Price
Reliability
Popularizing air travel
First time fliers
57 destinations
Young fleet
Premium
Mileage / lounges
Service
Business-oriented
80-year old brand
Direct flights
Brands attractive to all customer segments
Valu
ePrem
ium
Low-Cost Operating Platform
Best Cost-Benefit Best Cost-Benefit
20This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
MacapMacapáá
FortalezaFortaleza
NatalNatal
RecifeRecife
CuiabCuiabááSalvadorSalvador
VitVitóóriaria
Porto SeguroPorto Seguro
Campo GrandeCampo Grande
AssunAssunççãoão
Panama City
ManausManaus
MaringMaringáá
São LuisSão Luis
Boa VistaBoa Vista
Buenos AiresBuenos Aires
Rio BrancoRio Branco
Joao PessoaJoao PessoaPorto VelhoPorto Velho
Porto AlegrePorto AlegreRosarioRosario
Caxias do SulCaxias do Sul
AracajuAracaju
TeresinaTeresina
GoiâniaGoiânia
PetrolinaPetrolina
CampinasCampinas
Santa CruzSanta Cruz
BelBeléémm
Montevideo
Rio de Janeiro
Sao Paulo
Ribeirão PretoRibeirão Preto
CordobaCordoba
FozFoz do Iguado IguaççuuLondrinaLondrinaCuritibaCuritiba
JoinvilleJoinvilleChapecChapecóó
B. HorizonteB. Horizonte
PalmasPalmas
BrasBrasíílialia
Florianópolis
UberlandiaUberlandiaSao J. Rio PretoSao J. Rio Preto
NavegantesNavegantes
GOL: Superior ResultsGOL: Superior Results
SalvadorSalvador
Porto AlegrePorto Alegre
Rio de Janeiro
Sao PauloCuritibaCuritiba
B. HorizonteB. Horizonte
BrasBrasíílialia
Florianópolis
MacapMacapáá
FortalezaFortaleza
NatalNatal
RecifeRecife
CuiabCuiabááSalvadorSalvador
VitVitóóriaria
Porto SeguroPorto Seguro
Porto AlegrePorto Alegre
CampinasCampinas
BelBeléémm
Rio de Janeiro
Sao PauloCuritibaCuritiba
B. HorizonteB. Horizonte
BrasBrasíílialia
Florianópolis
MacapMacapáá
FortalezaFortaleza
NatalNatal
RecifeRecife
CuiabCuiabááSalvadorSalvador
VitVitóóriaria
Porto SeguroPorto Seguro
ManausManaus
MaringMaringáá
Porto AlegrePorto Alegre
TeresinaTeresina
GoiâniaGoiânia
CampinasCampinas
BelBeléémm
Rio de Janeiro
Sao PauloCuritibaCuritiba
B. HorizonteB. Horizonte
BrasBrasíílialia
FlorianópolisNavegantesNavegantes
MacapMacapáá
FortalezaFortaleza
NatalNatal
RecifeRecife
CuiabCuiabááSalvadorSalvador
VitVitóóriaria
Porto SeguroPorto Seguro
ManausManaus
MaringMaringáá
São LuisSão Luis
Porto AlegrePorto Alegre
AracajuAracaju
GoiâniaGoiânia
CampinasCampinas
BelBeléémm
Rio de Janeiro
Sao Paulo
Ribeirão PretoRibeirão Preto
CuritibaCuritiba
B. HorizonteB. Horizonte
PalmasPalmas
BrasBrasíílialia
FlorianópolisNavegantesNavegantes
MacapMacapáá
FortalezaFortaleza
NatalNatal
RecifeRecife
CuiabCuiabááSalvadorSalvador
VitVitóóriaria
Porto SeguroPorto Seguro
Campo GrandeCampo Grande
ManausManaus
MaringMaringáá
São LuisSão Luis
Buenos AiresBuenos Aires
Rio BrancoRio Branco
Joao PessoaJoao PessoaPorto VelhoPorto Velho
Porto AlegrePorto Alegre
Caxias do SulCaxias do Sul
AracajuAracaju
TeresinaTeresina
GoiâniaGoiânia
PetrolinaPetrolina
CampinasCampinas
BelBeléémm
Rio de Janeiro
Sao Paulo
Ribeirão PretoRibeirão Preto
FozFoz do Iguado IguaççuuLondrinaLondrinaCuritibaCuritiba
ChapecChapecóó
B. HorizonteB. Horizonte
PalmasPalmas
BrasBrasíílialia
Florianópolis
UberlandiaUberlandia
NavegantesNavegantes
2001 2002 2003 2004
2005 2006
Net Revenues:R$0.2 bn
EPS: (R$0.06)
Net Revenues:R$0.7 bn
EPS: R$0.36
Net Revenues:R$1.4 bn
EPS: R$1.07
Net Revenues:R$2.7 bn
EPS: R$2.66
Net Revenues:R$3.8 bn
EPS: R$2.90
Net Revenues:R$2.0 bn
EPS: R$2.14
2007
Net Revenues (E):R$6.1bn
EPS: R$4.20 - R$4.70
21This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
Accelerated Growth OptionsAccelerated Growth Options
+ Low cost
+ Balance sheet strength
+ Liquidity
+ Growth options
Brazil and South
AmericaLow-fare
Short-haul
Brazil and South
AmericaLow-fare
Short-haul
+ New slots and route
rights
+ New customer segments
+ New ancillary revenue sources
- Loyalty program revenues- Cargo revenues- Installment payment revenues
- Premium travelers- Business travelers- International tourists
First rate destinations
- CGH, GRU, GIG, SDU, BSB, Heathrow, JFK, etc.
- Synergies- Increased volumes- Better yield management
Differentiated Value Proposition
22This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
Fleet PlanFleet Plan
Fleet plan to facilitate profitable growth and reduce costs
Order for 121 737-800NGs
737 – 800s 737 – 700s 737 – 300s737 – 800 SFPs767 – 300s
Seat CAGR 2006-2012 = 11%
102
119 121131
139152
8V 14V 16V 18V 20V 22V24G
33G49G
65G78G
86G
12G
13G
11G
7G
6G5G
5V
7V
9V
11V
13V15V
30G
28G
21G
20G10G
10G
4V
8V
10V12V
14V
7G
12G
14G9V
8V
0
20
40
60
80
100
120
140
160
180
2007E 2008E 2009E 2010E 2011E 2012E
23This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
Share Performance: (1)
• GOL ADR x XAL +6.9%• GOL ADR x Tier 1 LCCs (2) -5.9%• GOLL4 PN x IBovespa -17.2%
Trading Volume: (1)
• GOL ADR – Avg. Daily US$ 30 MM• GOLL4 PN – Avg. Daily R$ 37 MM
(1) From January 1 to April 17, 2007.(2) Tier 1 LCCs: Southwest, Ryanair, JetBlue and West Jet
Relative Performance and LiquidityRelative Performance and Liquidity
24This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
Industry Benchmarks – LTM 1Q07(1)Industry Benchmarks – LTM 1Q07(1)
(1) LTM March 31, 2007 for GOL; FY 2006 for other airlines(2) Translated to US Dollars at average exchange rate R$2.1082 / US$1.00 €0.8121 / US$1.00 e CAD$1.1342 / US$1.00(3) Projected 2-year EPS Growth (CAGR) (Source: Bloomberg Estimates)(4) P/E = Share prices as of April 17, 2007 divided by EPS (Source: Bloomberg Estimates)(5) P/E 2007 divided by 2-year EPS projected growth (CAGR) (Source: Bloomberg Estimates)
Net Income (US$ MM)
EBITDAR (US$ MM)
EBITDAR Margin
P/E 2007(4) (x)
Net Income Margin
P/E 2008(4) (x)
Projected EPS Growth(3)
PEG Ratio(5) (x)
240 (2)
479 (2)
16.2
25.4%
12.7%-1
381
30.9
16.1%
-0.0%499
1,608
15.5
17.7%
5.5%505 (2)
853 (2)
29.1
31.9%
18.9%102(2)
383 (2)
15.6
24.7%
6.5%
11.2 16.615.121.7 13.7
20% NM19%24% 26%
0.3 1.8 0.5 NM 5.7
LTM Dividend Yield 1.6% - 0.1% - -
25This presentation is subject to copyright and may not be copied or used without GOL’s express consent
GOL Webcast 1Q07
Industry BenchmarksIndustry Benchmarks
2007 P/E multiple(1)
Discount16.2x 25.7x25.4x23.6x
Tier 1 LCC(2)GOL Infrastructure(3)
BrazilConsumer(4)
Brazil
The lowest cost providerThe best balance sheetThe highest liquidityThe most growth options
GOL:
Translates into superior earnings
growth
(1) P/E = Share prices as of April 16, 2007(2) Southwest, Ryanair, West Jet and JetBlue(3) ALL, CCR and OHL(4) Guararapes, CBD, AmBev and Lojas Americanas
- 37%- 36%- 31%
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GOL Webcast 1Q07
Looking ForwardLooking Forward
Excellent Growth Prospects
+/- 80% increase in ASKs+/- 71% load factorsYields +/-R$20 centsNon-fuel CASK +/- R$8.2 cents
Guidance
Earnings per Share
Net Revenues
ASK Growth
2007 (previous)
R$ 5.20 - R$ 5.65
+/-R$ 5.5 billion
+/- 50%
CASK ex-fuel +/- R$ 8.5 cents
Operating Margin +/- 23%
Load Factor +/- 75%
2007 (revised)
R$ 4.20 - R$ 4.70
+/-R$ 6.1 billion
+/- 80%
+/- R$ 8.1 cents
+/- 20%
+/- 72%
2Q07
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GOL Webcast 1Q07
GOL’s Competitive StrengthsGOL’s Competitive Strengths
Proven management
Proven management
Low fares and high profitability
Low fares and high profitability
Strong brandsStrong brands
Efficient sales distribution
Efficient sales distribution
Highly productive workforce
Highly productive workforce
Modern and efficient fleetModern and efficient fleet
Lowest-cost provider
Lowest-cost provider
Quality customer service
Quality customer service
Unique cultureUnique culture
This presentation contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of GOL. These are merely projections and, as such, are based exclusively on the expectations of GOL’s management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in GOL’s filed disclosure documents and are, therefore, subject to change without prior notice.