Transcript Document
Finnair Group Financial year April 1 - December 31, 2000 FROM CRISIS TO GROWTH 2002: Accelerating growth 2001: Introduction of new structures 2000: Adaptation and investment for the future 1999: The moment of truth We doubled our results 1. Profitability: Profit before extraordinary items rose 103 % (125,1 MEUR) 2. Yield: Yield continued up (8,1% per RPK), successful elimination of loss making routes 3. Costs: Operating costs (excl. fuel) decreased 1,1% 4. Efficiency: World´s most efficient use of B757 fleet 5. Staff: New incentive schemes, 3,3 % productivity increase, 4,8 % less staff 6. Transparency: Quarterly reporting since Q1/1999, new Group structure January 1, 2001 Focus on superior quality • 1. Quality: Most punctual (AEA) and best customer service (SoFie/IATA) • 2. Service: Best service brand in Finland (Markkinointi & Mainonta) and once again best ”Cellar in the sky” (Business Traveller) • 3. Focus on strong brands – New Finnair corporate image – Finnmatkat sold, emphasis put on developing Suntours Finnair Group key figures Q1+Q2+Q3 Q1+Q2+Q3 2000 1999 1259.3 1194.1 Turnover MEUR EBIT - of turnover MEUR % 122.0 9.7 61.1 5.1 EBIT excl. book gains - of turnover MEUR % 62.4 5.0 29.6 2.5 Profit before extraordinary items and taxes - of turnover MEUR % 125.1 9.9 61.6 5.2 EUR EUR 1.05 7.60 0.47 6.57 % MEUR % % 15.2 74 42.6 11.5 7.3 75 41.5 13.5 EPS Equity/share ROCE Net debt Equity ratio Gearing Improved transparency • The financial year will match the calendar year from 2001 • Key economical figures for 2000 are shown as pro forma • From the beginning of 2001 the financial reporting will be based on the new Group structure with six business areas in order to promote clarity and improve transparency Steady turnover growth MEUR 1800 1600 1400 1200 1000 800 600 400 200 0 1996/97 1997/98 1998/99 1999/00 2000 EBIT over EUR 100 million MEUR 120 EBIT % of turnover % 14 12 100 10 80 8 60 6 40 4 20 2 0 0 1996/97 1997/98 1998/99 1999/00 2000 Profit doubled Profit before extraordinary items and taxes MEUR 140 120 100 80 60 40 20 0 1996/97 1997/98 1998/99 1999/00 2000 Strong cash flow from operations MEUR % % of turnover 250 16 14 200 12 10 150 8 100 6 4 50 2 0 0 1996/97 1997/98 1998/99 1999/00 2000 Return on Capital Employed % 18 16 14 12 10 8 6 4 2 0 1996/97 1997/98 Year 2000 WACC 8 % 1998/99 1999/00 2000 Return on Equity % 18 16 14 12 10 8 6 4 2 0 1996/97 1997/98 1998/99 1999/00 2000 Improved results with less personnel Group personnel on average 12 000 11 000 10 000 9 000 8 000 7 000 1996/97 1997/98 1998/99 1999/00 9 mths 2000 Productivity improvement ATK (1000) / person 300 280 260 240 220 200 1996 1997 1998 1999 2000 Investing in first class equipment MEUR 300 250 200 150 100 50 0 1996/97 1997/98 1998/99 1999/00 Other investments Buildings Flight equipment 2000 Net debt decreased MEUR 350 300 250 200 150 100 50 0 1996/97 1997/98 1998/99 Interest bearing debt Liquid funds 1999/00 2000 Finnair has a strong balance sheet Equity ratio % 50 45 40 35 1996/97 1997/98 1998/99 1999/00 2000 Improved Gearing % 25 20 15 10 5 0 -5 -10 1996/97 1997/98 1998/99 1999/00 2000 Cash earnings per share EUR 3,5 3 2,5 2 1,5 1 0,5 0 1996/97 1997/98 1998/99 1999/00 2000 Finnair’s dividend policy “It is Finnair’s dividend policy to pay out at least a third of the earnings per share as dividend during an economic cycle. We try to take into account the company’s earnings trend and outlook, financial situation and capital needs for any given period.” • For the financial year 2000 a dividend of EUR 0.40 is proposed, which amounts to 38 per cent of earnings per share • Effective dividend yield 8.7% (spot price EUR 4.60 March 7, 2001) Competitive pay out -ratio Annual dividend MEUR % of EPS 40 80 30 60 20 40 10 20 0 % 0 1996/97 1997/98 1998/99 1999/00 2000 * * Dividend proposal by the Board of Directors to the AGM is EUR 0.40/share EUR Deep discount in Price to Book 12 10 8 6 4 2 0 1996/97 1997/98 Equity/share 1998/99 Share price/high 1999/00 2000 Share price/low Final quarter of the fiscal year 1.10.-31.12.2000 • Strong development in yield continued – Revenue from flight operations/RTK + 5.8% – Revenue from flight operations/RPK + 7.4% • • • • EBIT 28.6 MEUR (31.6) Capital gains 25.4 MEUR (22.8) Fuel costs up by 66.4% Because of the financial year change, final quarter EBIT includes extraordinary items as: – provisions for profit bonus and incentive schemes – provisions for aircraft maintenance costs – revenue from unused flight documents Net impact from these and other items totals -12 MEUR Yield and Unit cost development Change to previous year 15 10 5 % 0 -5 Q1 Q2 Q3 1999 Q4 Q1 Q2 Q3 2000 -10 Yield Unit costs Unit costs excl. fuel Unit costs excl. exceptional items Unit costs excl. exceptional items and fuel Q4 EBIT per Quarter Operating EBIT MEUR Capital gains 60 50 40 30 20 10 0 -10 -20 -30 Q1 Q2 1998 Q3 Q4 Q1 Q2 Q3 1999 Q4 Q1 Q2 Q3 2000 Q4 EBIT per Quarter Change to previous year, excluding capital gains MEUR 30 20 10 * 0 -10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -20 -30 1998 1999 2000 -40 * Change excl. exceptional items due to change of fiscal year. These items include provisions for profit bonus and incentive schemes and for aircraft maintenance costs, revenue from unused flight tickets Finnair Group New management structure 1.1.2001 Group Strategy resources Cargo Leisure Traffic Scheduled Passenger Traffic Aviation Services Travel Services Support Services • Business divisions consists of more independent business units and subsidiaries in order to improve transparency and allow for more flexible and efficient operations in a shifting competitive environment • Each business unti will have its own business strategy, management team and its own remuneration principles • Responsibility for capital employed and for the return on it Profitable growth in 2001 • Growth with existing resources • Benefit from more integrated alliance cooperation • Efficiency with the new management structure • Agreements with all labour unions • Improved working atmosphere and internal communication • Modernisation of fleet with Airbus A320 family • eFinnair Online -sales growth scenario 350 000 300 000 250 000 Positiv forecast 2001 200 000 Realistic forecast 2001 150 000 Modest forecast 2001 100 000 50 000 0 2000 • • 2001 Year 2000 total online -sales approx. 60.000 passengers Year 2001 forecasts between 175.000 – 300.000 Confident future • Underlying profitability expected to improve further • Capacity growth 1-2 % (ATKs) • Investments approx. 275 MEUR, fleet renewal continues • New growth from Asia – Fourth MD-11 aircraft on scheduled passenger traffic 2002 (Hongkong new destination) – Substituted by two leased B757 aircraft on leisure traffic Challenges this year • • • • • Consolidation of Group structure Capacity utilization still low Fuel prices Aero and domestic feeder traffic Preparedness for accelerating growth 2002 Appendices Development index of jet fuel in 2000 Index 100 = 1999 200 180 160 140 120 100 80 I II III IV V VI VII VIII IX X XI XII Changes in Passenger Traffic & Capacity TOTAL TRAFFIC % 25 1998 1999 2000 20 15 Traffic - Revenue Passenger-Km 10 Capacity - Available Seat-Km 5 0 -5 -10 dec oct aug jun apr feb dec oct aug jun apr feb dec oct aug jun apr -15 Number of passengers 1000 passengers 8000 7000 6000 5000 4000 3000 2000 1000 0 1996 1997 1998 1999 2000 International traffic Domestic traffic Distribution of scheduled traffic revenues 2000 Domestic 21 % Asia 14 % Europe 55 % North America 10 % Distribution of passenger sales in scheduled traffic 2000 Domestic 58 % Asia 7% North America 5% Europe 30 % Revenue tonne kilometres Mill. tnkm 1600 1400 1200 1000 800 600 400 200 0 1996 1997 1998 International traffic Domestic traffic 1999 2000 Strong cargo volume growth 1000 kg 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 1996 1997 1998 International traffic Domestic traffic 1999 2000 Distribution of cargo kilos 2000 Asia 20 % North America 31 % Domestic 6% Leisure traffic 3% Europe 40 % Steady increase in technical sales MEUR 70 60 50 40 30 20 10 0 1996/97 1997/98 1998/99 1999/00 2000 Excludes revenue from the maintenance of Finnair operated aircraft