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Air Berlin PLC | February 2013 | Company presentation
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A.
AB company presentation l Feb 2013 2
Introduction to airberlin
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Market position as of 31 December 2012
airberlin – a strong European carrier
AB company presentation l Feb 2013 3
No. 2 in core market: Germany / Austria / Switzerland
No. 7 in Europe with 33.3 m guests in 2012
80% of airberlin guests on European routes, on the
short- and medium haul network
Network carrier focused on business & leisure travelers
Group revenue of EUR 4.31 billion
Positive operating result (EBIT) of EUR 70.2 million –
an improvement of more than EUR 300 million over the
previous year
Net profit of EUR 6.8 million
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0.5 0.8 1 1.1 1.4 1.6 2 3 4 6 7
10 12
14
19
25
29 28
34 35
Air Berlin Inc. was founded by the former PanAm captain Kim Lundgren in Oregon, USA in 1978
1991 Air Berlin GmbH & Co. Luftverkehrs KG was founded with Joachim Hunold as sole managing director
airberlin has successfully developed into a full service network carrier
AB company presentation l Feb 2013 4
Charter-flights from
Germany
| 1992 – 1997 | 1998 – 2005 | 2006 – 2010 | since 2011
Chartercarrier Mallorca/Euro-Shuttle Scheduled services
Alliances & partnerships
Start of Mallorca and
City-Shuttle
Codeshare with many
airlines worldwide
Strategic partnership
with Etihad Airways
since 2012
Since 3 March 2012
airberlin is a member
of the oneworld®
alliance PAX [m.]
Foundation Business focus: Charter
Organic growth Scheduled traffic specializing on holiday destinations
2006 going public Mergers & acquisitions
International positioning Alliances & codeshares
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Fort Myers
Berlin Dusseldorf
Abu Dhabi
Bangkok
Phuket
Johannesburg
Sydney
New York
Miami
Munich Frankfurt Beijing
*Codeshare scope as of Dec 2012
Codesharing and interlining with Etihad multiplies the number of
destinations and flights on offer
5 AB company presentation l Feb 2013
Destinations operated by Etihad
Destinations operated by airberlin
Joint strategic network approach
Portfolio of almost 90 routes*
56 AB/HG routes carry the EY code
31 EY routes carry the AB code
By combining both airlines’ flight networks and the frequent flyer
programs, the number of available flights for both airlines
increased to include 239 destinations in 77 countries
A whole new world of choice
Gateway to Middle East, Asia, Australia & Africa
Hub to Germany & Europe
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Source: oneworld®
airberlin’s membership in the global airline alliance, oneworld, presents further
opportunities for growth by providing airberlin with access to new destinations and
additional passengers
airberlin is a full member of the oneworld alliance since 20 March 2012
AB company presentation l Feb 2013 6
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2012 2011 2013 2014
Shape & Size efficiency program already contributed EUR 250 million to income in 2012
Continuing worsening economic environment as well as other external factors such as aviation tax, fuel
price, BER opening delays and changing consumer behaviour
Positive effects from Shape & Size will be insufficient to achieve profitability
Turnaround program Turbine launched to counteract those effects and achieve sustainable profitability
Involves a wide range of initiatives aimed at structural changes to refocus the business and operating model
with a key focus on cost efficiency
– Turbine challenges status quo business assumptions with the goal of adapting the business model to
“lean and smart” principles
Besides Shape & Size, the management developed an additional,
comprehensive strategic plan in order to achieve its goals in 2013
AB company presentation l Feb 2013 7
"Shape & Size" – Internal continuous improvement; well embedded in the organization 1
"Turbine"
Structural changes to refocus
business and operating model
2
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Turbine involves a wide range of initiatives to achieve a sustainable
profitable business model
AB company presentation l Feb 2013 8
Process & levers TURBINE
Turbine`s major objective is to reduce costs
and apply efficient operational principles
while maintaining core brand attributes
Structural change to regain competitiveness
Challenge status quo business assumptions
and adapt business model to “lean and
smart” principles
Significantly lift operating performance
(RASK / CASK)
Develop master turnaround plan by the end
of 2012
Building upon airberlin's core brand
attributes (value for money, innovativeness,
service with heart)
“Turbine” sharpens our customer offering,
especially for high-value customers
Implement changes throughout 2013
The program is addressing all elements of
operations, e.g.:
Where airberlin flies
Number and types of aircrafts in the fleet
How airberlin routes aircrafts and crews around its network
Ground processes supporting flights
Organizational setup and responsibilities
IT and systems supporting the head office
Commercial steering model (scheduled / tour operator)
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B.
AB company presentation l Feb 2013 9
Financial performance 2012
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Financial Performance – FY 2012
10
EBITDAR EBIT Net result Revenue
+128%
+73%
+2%
6.8
-420.4
70.2
-247.0
736.4 425.9
4,311.7 4,227.3
Despite a reduction of capacity, an increase in revenue is achieved from a slightly higher seat load factor and an increase in yield
Revenue growth, volume related cost reductions and "topbonus" transaction helped to improve EBITDAR significantly
Improvement in EBIT is following EBITDAR development
Followed by a better
financial result, the
company returned to net
profit and improved by
more than EUR 270 m
AB company presentation l Feb 2013
2012 2011
[EUR m]
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Operational development 2012 vs. 2011
Key performance indicators – FY 2012
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Yield [EUR]
Seat load factor [%]
ASK [bn]
Capacity [m]
Guests [m]
Number of flights [#]
-5.5%
Guests [m]
33.35 35.30
-7.4%
Capacity [m]
41.79 45.14
2012 2011
78.2 79.8
Guests/capacity [%]
+1.6%p.
111.4 120.1
Yield [EUR]
+7.7%
270,498 250,406
Flights
-7.4%
62.16 60.40
ASK
-2.8%
Due to capacity
reductions,
number of guests
declined
Cancellation of
unprofitable
routes, hence
number of
offered seats
reduced
Network
adjustments result
in fewer number
of total flights
based on IFRS flight revenue
including a/p tax revenue
Seat load factor
improves in line
with capacity
adjustments
Due to cancellation
of unprofitable
routes and
measures to
increase yield,
topline quality
improved
Due to route
adjustments
available seat
kilometer declined
by -2.8%
AB company presentation l Feb 2013
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[EUR m]
Strategic and efficiency initiatives led to additional revenues and
positive earnings contribution in 2012
AB company presentation l Feb 2013 12
airberlin has achieved significant revenue and earning contributions from its various strategic initiatives
and its efficiency program in 2012
Revenue effect Earnings effect
250
184
50
Sale of majority
stake in topbonus
Shape & Size Additional revenue
from Etihad Airways
partnership
Earnings effect
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The partnership with Etihad Airways is developing positively
Etihad Airways is codeshare partner No.1 for
airberlin
Portfolio of almost 90 codeshare routes
More than US$130 million revenues in total to EY
& AB
Latest amendment: Codeshare to China & Japan
Due to hub development, codeshare
opportunities will further grow
airberlin’s German hubs connect Abu Dhabi to
over 50 destinations
– Berlin connecting to 40 destinations
– Dusseldorf connecting to 30 destination
Strategic partnership with Etihad Airways delivered EUR 50 million in
additional revenues in 2012
AB company presentation l Feb 2013 13
Codeshare development
Harmonization of product standards and the
planned cooperation with regards to the Boeing
787
Boeing Dreamliner programs are affecting firm
orders of a total of 56 aircraft
airberlin and Etihad Airways launch a major
partnership campaign in June
Premium lounges around the world with access
to a growing number of Six Senses spas
New Business Class cabin offers fully automated
seats with an on-demand video system
Private chauffeur service for business class
travellers
Exclusive and discrete door-to-door experience
Further joint initiatives
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Earnings of EUR 184.4 million were realized from the sale of a majority
interest in the frequent flyer program topbonus in 2012
AB company presentation l Feb 2013 14
Separation of frequent flyer program topbonus into an
independent organisation and legal entity
Etihad Airways has taken a 70% holding in this new
scheme and airberlin holds the remaining 30%
Transaction is financed through EUR 50 million equity
and EUR 150 million debt financing
Enabling transaction for topbonus to develop its full
potential
Long-term agreements between topbonus and
airberlin for commercial and operational aspects
Two leading airlines
Two leading FFPs
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[EUR m]
The efficiency program Shape & Size has contributed significantly to the positive
developments in fiscal year 2012
This positive contribution has helped to considerably offset an increase in fuel prices of EUR
80 million
Shape & Size delivered EUR 250m bottom line-effects in 2012
AB company presentation l Feb 2013 15
2012
>250
Q4
>80
Q3
>70
Q2
>50
Q1
>50
Implementation
Realization
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Balance sheet structure
16
95%
5%
11%
89% 94%
6%
15%
85%
2,126
Net debt: 813
B/S as of Dec 31, 2011
Fixed & current assets
Liquid assets
Equity
Debt
Net debt: 770
B/S as of Dec 31, 2012
Equity
Debt
2,218
Fixed & current assets
Liquid assets
AB company presentation l Feb 2013
airberlin has increased its cash on balance sheet position from EUR 239.6 million to EUR 327.9 million in
2012 and reduced its net debt from EUR 813.0 million to EUR 770.2 million in 2012
[EUR m]
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C.
AB company presentation l Feb 2013 17
Appendix
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Summary of financials
AB company presentation l Feb 2013 18
(1) Restated due to retroactive adjustemetns of deferred tax assets. Previously reported numbers 2011: Net result EUR -271.8m; Earnings per share EUR -3.12; Total assets EUR 2,263.9m;
Total equity EUR 253.7m.
(2) Based on an annual average of 114,552,461 shares outstanding.
Profit & loss 2012 2011 % change
Revenue 4,311.7 4,227.3 2.0%
Operating expenses -4,505.7 -4,484.5 -0.5%
Sale of „topbonus“ 184.4 0 NM
EBITDAR 736.4 425.9 72.9%
EBITDA 144.3 -161.6 189.3%
Operating result (EBIT) 70.2 -247.0 128.4%
Financial result -73.6 -111.9 34.2%
Pre-tax earnings -3.2 -358.8 99.1%
Net result 6.8 -420.4(1) 101.6%
Earnings per share [in EUR](2) 0.06 -4.94(1) 101.2%
Balance sheet 2012 2011 % change
Total assets 2,217.6 2,125.6(1) 4.3%
Total equity 130.2 105.2(1) 23.8%
Cash position 327.9 239.6 36.9%
Net debt 770.2 813.0 -5.3%
[EUR m]