air berlin plc - wertpapiere & märkte | börsenportal ... etihad airways oneworld ®...

Berlin, 16 March 2012

ANALYSTS’ & INVESTORS’ PRESENTATION

AIR BERLIN PLC

1

2

AGENDA – Analysts‘ & Investors‘ meeting, 16 Mar. 2012 page

2

3

15

Topic 1 Review 2011

Topic 2 Overview 2012

18 Focusing the business model

22 Measurements to improve profitability

33 Outlook 2012

Macro-economic development

3

2011 has mainly been influenced by factors which were beyond the control of airberlin

3

Fuel & Dollar

Negative development of both led to:

cost increase and the need for further price increase

especially in smaller catchments this led to a drop in SLF as demand fell

Aviation tax

…imposed a heavy burden as this presented close to 5% cost increase on top of fuel

EUR 166 m burden in 2011

„Arab Spring“

loss of profits to North Africa destinations

change of the capacity alignment

lower margins in other leisure destinations due to overcapacity issues

2011

AT

$

Cautious consumer behavior

• Late booking pattern leading to less ability to forecast bookings

4

airberlin reacts to the economic pressure by launching a new efficiency program

4

Sharpening the Business model

offering a worldwide network for business and leisure with access through multi distribution channels

Shape & Size - Our fitness program

A comprehensive program to improve profitability • Network optimization • Optimized corporate organization • Cost reduction • Reduction of complexity

Financing activities • Aircraft sliding to improve the CAPEX (Investment

reduction by $ 508 m in 2012 and by $ 1,128.4 m in 2013*) and reduce capacity pressure

• Bond issuance in November EUR 100 m

New partners • Etihad and airberlin entered a deep strategic

partnership covering commercial activities on network and sales plus financial involvement making Etihad the largest shareholder

• oneworld® membership with effective date 20 March 2012

Initiatives taken to strengthen airberlin’s position in a competitive market

A

B

C

D

…to strengthen and well position airberlin for the future

* based on current average list prices as of 10/25/11

5

Financial Performance 2011

5

REVENUE EBITDAR

EBIT NET income

-16.7

2011

-247.0

2010 PF

619.9

-31.3%

2011

425.9

2010 PF

3,850.2

+9.8%

2011

4,227.3

2010 PF

-271.8

2011 2010 PF

-106.3

Revenue increase of 10 % compared to 2010 driven by increase in SLF and Yield

Next to the EUR 194 m negative swing on EBITDAR level, higher cost of AC (USD impact) led to negative EBIT swing of EUR 230 m

Huge cost increases especially from aviation tax (EUR 166 m) and fuel (EUR 229 m) and non-recurring items in 2010 impacted EBITDAR negatively despite revenue growth

Net income development is in line with EBIT development; within financial result app. EUR 39 m negative from MTM evaluation and FX development

* pro forma (PF): incl. NIKI 1H

6

airberlin's revenue increased by 10 % compared to previous year

Revenue split [EUR m]

+13.2% +1.5% +9.2% +62.0% +9.2% -1.7%

Total revenue

4,227.3

Others

253.7

Onboard sales

38.6

A/P tax

revenue

78.0

Flight revenue

3,857.0

Charter

1,233.9

Seat only

2,623.1

+9.8%

Change from FY 2010 PF


• Charter increased by only 1.5% especially due to Northern Africa crisis and subsequent capacity shifts and due to price pressure

• Seat only grew strongly due to yield and load increase

• Onboard revenue slightly decreased due to reduction in long-haul operation

• Growth in cargo revenue is the strongest driver for other revenue

7

Operational development – good total revenue per ASK performance

7

Passengers [m] Seat load factor [%] Yield 1) [EUR]

+1.2%

2011

35.3

2010 PF

34.9

+7.9%

2011

109.3

2010 PF

101.2 +1.7%p.

2011

78.2

2010 PF

76.5


Capacity [m]

-1.1%

2011

45.1

2010 PF

45.6

Revenue 1)/ASK [EUR ct.]

+7.8%

2011

6.80

2010 PF

6.31

Yield = Flight revenue per passenger // Revenue = total revenue

8

Cost/ASK on EBIT level in 2011 – burdened by fuel and aviation tax

8

Cost/ASK incl. fuel & aviation tax [EUR ct.]

Cost/ASK excl. fuel [EUR ct.]

Cost /ASK excl. fuel & excl. aviation tax [EUR ct.]


+12.3%

2011

7.21

1.10

0.38 0.46

0.76

1.08

1.47

0.27

1.69

2010 PF

6.42

1.02

0.33 0.47

0.78

1.04

1.44

1.34

Others

MRO

Navigation

Personnel

Leasing & AFA

A/P charges

Aviation tax

Fuel

2010 PF

5.08

1.02

0.33 0.47

0.78

1.04

1.44

+8.8%

2011

5.53

1.10

0.38 0.46

0.76

1.08

1.47

0.27

1.10

0.38 0.46

0.76

1.08

1.47

2010 PF

5.08

1.02

0.33 0.47

0.78

1.04

1.44

2011

+3.6%

5.26

9

Development of Expenses Direct operating expenses [EUR m]

139.3

285.6

818.9

877.5

+20.9%

Others

Catering incl. onboard sales

Navigation

Fuel

Aviation tax Airport charges

2011

2,717.5

158.2 143.3

1,048.1

165.6

916.6

2010 PF

2,247.8

125.4

286.7

+0.3%

2011

475.4

2010 PF

473.9

Personnel expenses [EUR m]

+10.0%

Other

Distribution

Marketing

Insurance

MRO

2011

618.5

272.6

25.0 67.0 19.8

234.1

2010 PF

562.1

248.8

23.3 65.7 20.3

204.0

Other operating expenses [EUR m]


10

Cost of aircraft ownership

10

Lease & depreciation expenses [EUR m]

Depreciation

Leases

+7.5%

2011

649.9

62.9

587.0

2010 PF

604.7

67.7

537.0

+3.5

Dec 2011

170.6

10.0 7.0

67.6

14.0

72.0

Disposals / Lease expires

1.3

75.4

3.4

Additions

3.5 3.7 1.0

Dec 2010

167.1

1.3 10.0

3.5

63.9

13.0

B767/757

DH8H

E190

B737 family

A330 family

A320 family

Development of number of aircraft [#]


11

Financial result 2010 vs. 2011 Breakdown of financial result [EUR m]

Expenses Income Currency & derivatives effects

Interest income increased Interest expenses were higher in 2010 due to buyback of convertible bond

Market to market effects due to USD rate development; non-cash

+44%

2011

9.8

2010

6.8

2010

-115.4

+28%

2011

-82.7

2011

-58%

-39.0

2010

-24.7

12

Equity and liquidity position of airberlin

12

Development of equity and liquidity [EUR m]

• 2010 affected by buyback of convertible bond and loss

• 2011 loss nearly cut equity in half

• 2010 sale of aircraft and repayment of debt to mitigate weaker operational cashflow

• Negative operational cashflow reduced liquidity

• Financial cashflow and investment cashflow nearly matching

0.6

Loss

-271.8

hedge

account./OCI

19.6

2010

end

505.3

Redemption

convertible

bond/other

-23.4

Loss

-97.2

hedge

account./OCI

15.9

2009

end

610.0

2011

end

253.7

Redemption

convertible

bond/other

372.1

Invest CF

449.9

Operational

CF

-10.0

2009

end

Operational

CF

-62.5

Invest CF

-402.3

-196.4

Financial CF 2010

end

409.7

2011

end

238.4

Financial CF

87.6

EQUITY

LIQUIDITY

13

Balance sheet ratios

Balance sheet structure, 2010 vs. 2011 [EUR m]

2,264

Net debt: 813

2,370

Net debt: 489

B/S as of December 31, 2010 B/S as of December 31, 2011 • Equity and liquidity

decrease due to loss in 2011

• Net debt impacted by liquidity swing, on-balance financing of aircraft and stronger USD

Fixed assets

Other current assets

Liquid assets

Equity

Debt 89%

11%

11%

23%

66% Fixed assets

Other current assets

Liquid assets

Equity

Debt

64%

19%

17%

21%

79%

14


14

3 Topic 1 Review 2011




33 Outlook 2012

Macro-economic development 15

15

Euro

Economic situation across Europe affects demand for air travel

• The debt crisis has not come to an end and

continues to negatively impact the European economies

• Financial turbulences in the Eurozone lead to slow-down of economic growth

• European economy moving towards modest recession in 2012

• Economic growth expected

with 0.7% • Stable economy, but uncertain

business situation • Cautious consumer behavior • Assessment of the current

business situation cooled notably since mid 2011

Europe Germany

• Difficult financial situation • Unemployment high and still rising

• Danger of debt restructuring impends • Recession in 2012 by more than -3%

Spain

Portugal

• EU rescue package • Bailout strains Greek-German relations

Greece

• Recession (by approx. 1.5% in 2012) • Industrial production -5% in January

Italy

16

2012 remains a challenging year

16

• Encouraging signs from the US economy are offset by the persisting crisis in the eurozone.

• However, if the crisis in the eurozone cannot be solved permanently, IATA expects the international aviation industry to incur a loss.

• It is expected that the aviation industry will be facing additional costs from national air travel surcharges and the introduction of emissions trading.

SHAPE & SIZE PARTNERSHIP with ETIHAD

AIRWAYS

oneworld® Optimization of

airberlin`s network

2012

airberlin reacts to the challenges in 2012

17


17

3

15

Topic 1 Review 2011




33 Outlook 2012


18

Etihad and oneworld allow airberlin further strategic development towards a full service airline

18

airberlin strategic development – transformation process

HYBRID CARRIER FULL SERVICE AIRLINE

Cu

sto

mer

Ser

vice

Timeline

Global network (from America to Asia) alliance member

Global positioned frequent flyer program (topbonus)

Full service airline (lounge, priorities, etc.)

BUSINESS

LEISURE LOW COST

Stand-alone airline (cooperation with NIKI)

135 destinations (mainly Europe)

19

airberlin offers significant advantages to their guests

Network of airberlin, Etihad and oneworld

• Brand for business and leisure travelers • Attractive mix of leisure and business destinations • Three major hubs in Germany/Austria with access to America

and through the hub in Abu Dhabi to Asia, India and Australia • Huge variety of distribution channels (online, travel agencies,

TOPs, GDS)

• Integration Etihad and in oneworld with full compatibility

• Unique combination of attractive prices and full service • Business class product on long-haul services • Worldwide lounge access

NETWORK

FREQUENT FLYER PROGRAM

GUEST SERVICE

• Competitive cost structure

COST

20

New inventory and revenue management system enables cost advantages and revenue increase – reduction of complexity

20

Flight planning

Integrated flight planning with priority on profitability

Cost

Pricing

Intelligent Pricing through all channels and markets business segmentation

Revenue

Service to customer

Versatile services for different customer groups

Cost

RASK

Higher load and yields

Revenue

PROFITABILITY INCREASE

Business traveler

Leisure traveler

EVOLUTION

• Separated booking systems • Separated revenue management

systems

• Integrated view on business and leisure travelers

Network traveler

21


21

3

15

Topic 1 Review 2011




33 Outlook 2012


22

Measures with important effects on revenue and profitability…

22

Process improve-

ment

Profitability improvement

Network reduction & productivity

Yield & Revenue

mgmt

Alliances

Cost initiatives

Mainte-nance

Yield optimization

Ancillaries

Points of Sale

Systems

1

1 1

3.1 Airport sourcing Late one-off bonuses TXL and DUS for

2011 identified (EUR 5.2 m)

3.6 Enhancing eCKI Contracts for reduction/ optimization

CUSS/ SSK in various airports finalized One-off payment regarding CUSS / SSK

agreed

3.8 PMI punctuality Awareness campaign for cockpit and

cabin crew started Meeting with ATC & GOPS PMI

conducted

3.7 Fuel saving Pilot Fuel Coaching campaign started Post flight analysis software to be installed

(belair and NIKI)

3.9 Compensation payments Implemented

1

1

1

3.3 Crew base concept Conceptual preparation for model for

“base jumper” discussed with crew planning

3.2 Onboard services Outsourcing customs warehouse in

discussion Module target decreased by EUR 2.0 m

3.5 Crew productivity / travel Production adjustment (FY -3%) not

completely compensated Required flexibility in flight program

decrease productivity target

1

1

3.11 IT Server solution for video conferencing

tool, contract signed with cost savings of EUR 0.1 m

3.13 Procurement / admin cost saving Increase of target for module by EUR 1.5 m Cost reduction through optimized use of

printers and copiers identified

3.12 Overhead The module responsibility changes to the

new CHO Planning on level SVP/EVP to be

prepared until 8 Mar 12

3.14 NIKI cost Additional airport marketing support

negotiated (EUR 0.4 m) Fuel measure to reduce cost index

implemented (EUR 0.7 m)

1

1

3.10 Future OCC Flexibility of current system analyzed Number and type of flight changes

analyzed Complexity costs evaluated

1

1

1

1

2

3

6

5

4

23

> €10 m

> €55 m

> €10 m

> €45 m

> €20 m

… add up to a total EBIT improvement of more than EUR 200 m in 2012

23

Process improve-

ment

Profitability Improvement

EUR

Network reduction & productivity

Yield & Revenue

mgmt

Alliances

Cost initiatives

Mainte-nance

EBIT values without effects from cost avoidance

> €70 m

1

2

3

4

5

6

24

EBIT improvement >EUR 200 m in 2012 with increasing impact in the course of the year

24

≈13% ≈ 22% ≈ 31% Share of Total ≈ 34%

2012

<200

Q4

>70

Q3

>60

Q2

>45

Q1

>25

Implementation of measures mainly in Q1 and Q2

Realization of effects predominantly in Q3 and Q4 (65%)

Description

Implementation

Realization

Effect in EUR m

25

> €70 m

Yield- and Revenue improvement measures

25

Examples

Systems Enhancing points of sale Yield & Ancillaries

1

Increase in market share in international markets with a high airberlin presence

Push principle for selected distribution channels in Offline-markets

Systematic opening up of new customer segments, distribution and sales channels, e.g. in Spain

Improvement of the sales platform to increase revenue in new business segments

Installation of new Revenue Mgmt System to efficiently manage availabilities & tariffs

Systems as enabler for yield- and revenue improvements

Optimize existing distribution channels and support additional opportunities, e.g. alliances

Increase of yield in significant business segments

Additional ancillary revenue through offering of new services to customers (e.g. piece-concept)

26

> €20 m

Our all-encompassing cooperation with Etihad Airways opens a new world of destinations

26

More attractive corporate contracts due to wider network

Increase passenger flows through code share

Joint sales and distribution channels

Joint frequent flyer program

Joint network with aligning hub traffic

Cabin crew training; joint simulators

Joint procurement

Airport sourcing

Etihad partnership

2

27

> €20 m

With oneworld airberlin enters into an attractive alliance

27

Codesharing and interlining with partners to multiply the number of airberlin destinations offered

Substantial increase of seat load factor

Enhancing attractiveness

by offering joint products, e.g round-the-world tickets

through linking the airberlin topbonus program to the frequent flyer programs of other partner airlines

Offer seamless travel to all customers on all oneworld flights

oneworld alliance

2

28

> €45 m

Cut of unprofitable routes and related capacities increases efficiency & allows fleet optimization

28

Reduction of fleet from 170 to 152 aircraft will decrease cost of aircraft ownership per block hour by more than 9%

Elimination of unprofitable network elements and optimization of fleet rotation

Increase of aircraft productivity by 7%

Optimize cycles to reduce crew travel and unproductive working hours

Focus on high frequency destinations

Network reduction

3

29

> €10 m

Maintenance savings through strategic procurement, improved planning and material logistics

29

Strategic procurement

Optimization of material- and demand management over the group

Improvement of logistic processes within supply chain management

Synergies from further integration of NIKI maintenance in airberlin group maintenance function

Additional revenues from maintenance services to third parties

Maintenance 4

30

> €55 m

100+ measures for consequent ongoing cost reduction

30

Crew productivity Airport sourcing Fuel

Scale effects through focus on less destinations

Improvement of contracts with handling agents and streamlining of service level agreements

Bundling of procurement and ground-handling

Mainly driven by network and fleet optimization

Reduction of flight overtime through optimized crew planning

Reduction of crew travel expenses through consequent planning of crew cycles and avoidance of proceedings

airberlin as industry benchmark

fuel consumption < 3.5 litres per 100 PKM

airberlin fleet with Ø age of 5.3 years

Ongoing initiatives for additional reduction of 31.5 thousand tons

weight reductions

optimized engine washes

use of more recent wind & temperature data

optimized speed

5

31

> €10 m

Process improvement further enhances profitability

31

Ground efficiency Bundling at stations Operational performance

Implementing single aircraft strategy

Closing and pooling together of stations (crew and maintenance)

Scale effects on airport conditions

Reduce personnel costs by placing additional self service counters at airports

Ground handling staff only for passengers where individual troubleshooting is required

Reduction of overhead cost

Increase punctuality

Quicker check-in process to increase customer satisfaction

Developing an integrated Operations Control Center

6

32


32

3

15

Topic 1 Review 2011


18 Focussing the business model


33 Outlook 2012


33

Capacity development

33

Total seats [m]

>-5%

2012 2011

45.1

ASK [bn]

>-1.5%

2012 2011

62.2

Comments

• Sharp fleet reduction from 170 to 152 aircraft

• Capacity reduction in medium and short haul by

• Giving up unprofitable routes

• Alignment of aircraft utilization

• Focusing on high frequency

• Expansion in long haul by

• Increasing flights to Abu Dhabi

• Strengthening Berlin hub with flights to North America

<-7%

<-3%

>+6%

short haul 10.8

medium haul 39.0

long haul 12.3 17.4%

62.8%

19.8%

ASK development 2011 to 2012 [bn]

Target 2012

34

Topline development – yield and seat load factor improvement

34

Revenue/pax [EUR]

>+5%

2012 2011

119.8

Initiatives to increase yield

• Increase of base fare (“Eckpreis”) to all destinations

• Restrictive booking class steering drive higher yields (implementation of better RMS)

Price 2011

6.80

>+6.5%

2012 Ancillaries SLF

Revenue/ASK development [EUR ct] Seat load factor [%]

>+2%p.

2012 Shape

& Size

Effect

through

alliances &

partnerships

2011

78.2%

• Increase of fuel surcharge has been established in January further increase in March

• Cancellation of routes helps to improve yield and seat load factor

• Partnerships positively impact seat load factor

Target 2012

35

Cost development excluding fuel

35

• Cost development subject to USD development

• Structural cost increase will occur (e.g. distribution cost) but also higher yields will be generated

• Shape & Size will help to offset structural cost and price increases

broadly stable

2012 Structure Price Shape

& Size

2011

5.49

Total cost and fuel [EUR]

>-1%

2012 2011

3,413.2

649.9

618.5

475.4

1,669.4

Cost of a/c ownership

Other operating expenses

Personnel

Direct operating cost

[incl AT, excl. fuel]

Cost / ASK development [EUR]

Target 2012

36

Cost of aircraft ownership development

36

Cost of a/c ownership [EUR m] Aircraft [ #] BLH [hrs]

Narrow body BLH p.a. [hrs]

171

-18.0

2012 year end

2011 year end

-2.9%

2012

527.9

2011

543.9

>+5%

2012 2011

3.054

>-5%

2012 Shape & Size 2011

650

Wide body BLH p.a. [hrs]

>+7%

2012 2011

4.718

Target 2012

• Strongly depending on USD development ( lease rates)

• Next to cost reduction the increase in productivity is key for Shape & Size

• Revenue increase per aircraft bigger than 10%

37

Fuel hedging 2012

37

Fuel hedging profile and fuel price development, 2012 vs. 2011

0

10

20

30

40

50

60

70

80

90

100

Mar Feb Jan Dec Nov Oct Sep Aug Jul Jun May Apr

1) excl. differentials

Price1) development *[USD/t]

Hedging Rate 2011 (as of 03/09/2011)


Mar Apr May

1,100

1,050

1,000

950

900

850

800

550

Dec Nov Oct Sep Aug Jul Jun Feb Jan

96 64 47 20

Hedging profile [%]

Hedge price 2011 Best case hedge price

Worst case hedge price

Market / Forward price Current Hedge price

* as of 14 Mar 2012 / 09 Mar 2011

38

Dollar hedging 2012

38

Dollar hedging profile and FX rate development, 2012 vs. 2011

0

10

20

30

40

50

60

70

80

90

100

Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan

FX rate development *[USD/EUR]



1.42

1.40

1.38

1.36

1.34

1.32

1.30

Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan

100

* as of 14 Mar 2012 / 09 Mar 2011

77 50 43

Hedging profile [%]

Hedge rate 2011

Market / Forward rate

Worst case hedge rate

Best case hedge rate

Current Hedge rate

39

Fuel and USD sensitivity

39

Fuel / dollar sensitivity

Fuel costs per quarter 2011 vs. 2012 [EUR m]

>-3%

2012 2011

1.45

Fuel consumption / ASK [kg]

Effective Fuel Price/ton = $1.081 incl. differentials [$1.013 excl. differentials]; effective EUR/USD = 1.373

Unhedged price dollar [EUR/USD]

Fuel price unhedged quantity [USD/t]

1.300 1.375 1.400

139.9

82.3

45.3

136.1

59.5

46.0

134.1

47.6

46.3

1030

1200

1000

-2%

2012 Structure Shape

& Size

2011

23.36

255321

277196

>2% >2%

>5% >15%

Q4 Q3 Q2 Q1

fuel 2012

fuel 2011

Fuel consumption [mt]

Target 2012

40

Strong earning improvement envisaged

Operational performance

Capacity

• Strong fleet reduction (10% of aircraft)

• Reduction in selected non-strategic markets in Europe

• Moderate increase in long haul business

Capacity utilization and

income

• Increasing load factor through network reduction, improved sales platform and partnerships

Result

Revenue

• Growth in revenue through yield and SLF growth expected ( Q1 trends were satisfactory)

Expenses

• Cost per ASK ex fuel will be kept stable; structural cost increases will be offset through Shape & Size

Result

• Improvement in profitability

Balance sheet

Balance sheet

• Equity and liquidity stabilized through Etihad investment

• Deleveraging is the key objective for 2012; initiatives are on the way

Strong earnings improvement targeted for 2012, Shape & Size showing positive effects in the 1st Quarter

€ A L

Target 2012

air berlin plc - wertpapiere & märkte | börsenportal ... etihad airways oneworld ®...

Documents