110810 webconference ingles - 2 t11 ss
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Transcript of 110810 webconference ingles - 2 t11 ss
Warning - Information and ProjectionWarning Information and Projection
This notice may contain estimates for future events. These estimates merely reflect the expectations of the Company’s management, and involve risks and uncertainties. The Company is not responsible for investment operations or decisions taken based on information contained in this communication. These estimates are subject to changes without prior notice. j g pThis material has been prepared by TAM S.A. (“TAM“ or the “Company”) includes certain forward-looking statements that are based principally on TAM’s current expectations and on projections of future events and financial trends that currently affect or might affect TAM’s business and are not guaranteesevents and financial trends that currently affect or might affect TAM s business, and are not guarantees of future performance. They are based on management’s expectations that involve a number of business risks and uncertainties, any of each could cause actual financial condition and results of operations to differ materially from those set out in TAM’s forward-looking statements. TAM undertakes no obligation to publicly update or revise any forward looking statements. This material is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Likewise it does not give and should not be treated as giving investment advice. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either objec es, a c a s ua o o pa cu a eeds o a y ec p e o ep ese a o o a a y, e eexpress or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment
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judgment.
AgendaAgenda
Highlights
Airline Industry
Financial Results
Guidance and Fleet Plan
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We have completed 35 years of a successful historyWe have completed 35 years of a successful history
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During these 35 years we have diversified our sources of revenue
North AmericaDomestic America
EuropeEurope
SouthSouth America
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Achievements of our business unitsAchievements of our business units
Awards and Recognition Fleet and Network HighlightsAwards and Recognition•Best Airline•Excellence in Service •Operation Excellence
Fleet and Network
• Replacement of ATR by A319• New flight: Guarulhos - Campo G d
Highlights
• Award for best company in the logistics segment
•Best Airline Company•Most Beloved Company• Libano Miranda Barroso:Brazilian Personality of the Year
Grande • Flight linking the cities of Riberão Preto, Guarulhos and Galeão
• Highest quarterly revenue of our history: R$ 297 million
Galeão
New Partnerships• Ofertas com br and GROUPON
Expansion Achievement
50 ship set o erha lsOfertas.com.br and GROUPON
Capillarity Project• Pilot at 2 restaurants (Japengo)
3Q11 50 merchants in São Paulo
• Opening of the 100th store (July) • Expectation to end the year with 200 units
•50 ship-set overhauls• EASA certification for Line Maintenance
Focus• 3Q11 - 50 merchants in São Paulo
• 4Q11 - at least 350 merchants in Brazil
• Agreement with CaixaEconômica Federal
•Focus• New direct subordination to the holding company TAM S/A
We continue to study a potential investment in TripWe continue to study a potential investment in Trip
Fact•Signature of a non-binding agreement to acquire 31% of the total capital of TRIP•Capture market growthCapture market growth•More significant exposure in the medium density routes market
Status•Due diligence process completed and
ti f tsatisfactory•Implementation of a new technological platform completed in early August
Next Steps•Change in the code share agreement from g g"Block Space" to "Free Sale“•Analysis of results with the new agreement
* Implementation of the new technology platform, by Trip, was necessary for the change of the code share agreement.
Status of TAM & LAN combinationStatus of TAM & LAN combination
A l & R i t ti
August 13, 2010:
Approvals & Registrations:
•TDLC (Chile) approval •Approval of antitrust authorities in Spain (required) and Germany (approved)March 1, 2011:
We announced the intetion to combine with LAN
(required) and Germany (approved)•Approval of antitrust authorities in Brazil,•Italy and Argentina (non suspensive)•CVM (Brazil), SVS (Chile), SEC (USA)
,ANAC approved the proposed corporate structure
LATAM
ExchangeJanuary 18 2011: May 26 2011: Shareholders’ ExchangeOffer &Closing
January 18, 2011:LAN and TAM signedbinding agreements
May 26, 2011:Public HearingLAN, TAM and interestedparties will give their
ShareholdersMeetings
parties will give their opinionabout the transaction to the TDLC Court.
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AgendaAgenda
Highlights
Airline Industry
Financial Results
Guidance and Fleet Plan
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Latin American countries have a great growth potential growth
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MacaoCyprus
Bahamas
M ltSeychelles
Trips* per capita - 2009
Iceland
1Switzerland
Denmark
Ireland
Sweden
USA
FinlandUK
J Belgium
FranceGermany
Canada
UAEAustralia
MacaoSingapore
Hong Kong
New Zealand
Spain
Italy
Brunei
Kuwait
Cyprus
Puerto Rico
South Korea
Greece
Taiwan
Malta
BahrainBarbados
Maldives
Saudi Arabia
Trinidad
Latvia
Fiji
Cape Verde
Samoa
St Lucia
Mauritius
Iceland
Qatar
AustriaOman
0 1
NetherlandsJapan Belgium
Slovenia
Israel
Saudi Arabia
Czech Rep.
Hungary
Slovakia
Costa RicaJordan
Mongolia
EstoniaChile
Libya
UruguayBolivia
0,1
Angola World average
Equatorial Guinea
Belarus
LiberiaBangladesh
Senegal
Swaziland Brazil
0,01 Iraq
BangladeshLesotho
Chad
0,0010 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 45.000 50.000 55.000
2009 real GDP per capita in USD
* Passengers originating from respective country Source: Airbus
Domestic passengers revenue increased by 3%Domestic passengers revenue increased by 3%
Domestic Passengers
ASK 11,767 11,956
ASK, RPK and Load Factor15%
Passenger Revenue - R$ Million
3%10,357 2%
31%
1 511
3%
RPK6,335
8,288 8,269
2Q10 1Q11 2Q11Load
0%1,428 1,511 1,472
2Q10 1Q11 2Q11Factor 61% 70% 69%
Yield - R$ Cents
2Q10 1Q11 2Q11
RASK - R$ Cents
21%5%
10%
22.518.2 17.8
2%13.0 12.3 11.7
11
2Q10 1Q11 2Q11 2Q10 1Q11 2Q11
We reduced the gap between peak and off peak hoursWe reduced the gap between peak and off peak hours
W i f d ff i
Load factor X Hour
We remain focused on offering affordable ticket to price-sensitive
passengers
Off PeakPeak Peak
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2Q10 2Q11
International passenger revenue increased 32% in dollarInternational passenger revenue increased 32% in dollar
International Passengers
ASK, RPK and Load Factor
14%R$862 R$865
Passenger Revenue - Million18%
0%ASK
6,6217,334 7,5193%
21%
R$732
$ $0%
5%
32%
RPK5,055
5,838 6,123
2Q10 1Q11 2Q11Load
5%U$409
U$517 U$541
2Q10 1Q11 2Q11Load Factor 76% 80% 81%
Yield - Cents RASK - Cents
Avg US Dollar
R$ 14.5 R$ 14.8 R$ 14.12%
4%
R$11.1R$11.7 R$11.5
4%
2%
1.79 1.67 1.60
-11%
-4%
U$ 8.1 U$ 8.9 U$ 8.90%
10%
U$6.2 U$7.0 U$7.22%
17%
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2Q10 1Q11 2Q112Q10 1Q11 2Q11 2Q10 1Q11 2Q11
AgendaAgenda
Highlights
Airline Indusry
Financial Results
Guidance and Fleet Plan
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Multiplus continues to consolidate as an important f fit bilitsource of profitability
FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTS
• Gross Billings of points of R$ 355 million, a growth of 34% versus 2Q10 and of 4.3% compared to 1Q11
• N t R f R$ 285 million d t R$ 93 illi i 2Q10 d R$ 242 illi i 1Q11• Net Revenue of R$ 285 million, compared to R$ 93 million in 2Q10 and R$ 242 million in 1Q11
• Net Income of R$ 81 million, versus R$ 23 million in the 2Q10 and R$ 71 million in 1Q11 (margin of 28.5%)
• Cash Generation of R$ 331 million, 8.7% higher than 2Q10 and 29% than 1Q11
R$ million+205.0%
NET REVENUE
+250.9%R$ miIlion
NET INCOME
206242
285
+17.8%
205.0%
7181
Margem
+14.5%%
94130
2345 43
24.7% 21.0%
g
34.2% 29.3% 28.5%
2T10 3T10 4T10 1T11 2T11 2Q10 3Q10 4Q10 1Q11 2Q11
At TAM S/A the EBITAR increased by 8%At TAM S/A the EBITAR increased by 8%
In Reais 2Q11 vs 2Q10
2Q11 vs 1Q11
2Q11 2Q10 1Q11
Net Revenue (million)
Operating Expenses (million)
3,0533,038
2,6112,610
2Q1016.9%16.4%
1Q110.4%3,.%
3,0432,932p g p ( )
EBIT (million)
EBIT Margin
,15.60.5%
,1.4
0.1%-
0.5p.p.
,-85.8%-3.1p.p.
,110
3.6%
EBITDAR (million)
EBITDAR MarginFinanc Result + Others* ( illi )
31310.2%
160
28911.1%(211)
8.2%-0.8p.p.
-17.8%-2.3p.p.13 8%
38012.5%
140Financ. Result + Others (million)
Net Income (million)
Total RASK (cents)
16060
15.7
(211)(176)15.4
--
1.9%
13.8%-53.2%-1.6%
14012915.9Total RASK (cents)
CASK (cents)
CASK ex-fuel (cents)
15.610.0
15.410.4
1.5%-3.5%
1.6%2.1%
15.49.8
CASK USD (cents)
CASK USD ex-fuel (cents)
9.86.3
8.65.8
13.9%8.4%
6.2%6.7%
9.25.9
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* Others includes “Movements in fair value of fuel derivatives” and “Gains (losses) on aircraft revaluation”
Liquidity and debt profileLiquidity and debt profile
Adequate debt profile Senior Notes Issuance
Details
• USD 500 million
Use of Proceeds
• payment of maturing debt
R$ Million
2,400
2,700
USD 500 million
•Due to 2021
•Semiannual payments
•Interest rate of 8 375%
payment of maturing debt
• pre-delivery payments
• general corporate purposes1,200
1,500
1,800
2,100
•Interest rate of 8,375%
Caixa 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 20210
300
600
900
6 5
8.0
Debentures, bonds and othersLeasing on the balance sheet
Debt mix by currency
Adjusted Net Debt / EBITDAR
$
Caixa 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
3.8
5.66.3 6.5
3.8 3.74.0
6.0
14%
R$
2005 2006 2007 2008 2009 2010 2Q11
2.1
0.0
2.0
86%US$
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2005 2006 2007 2008 2009 2010 2Q11
Obs.1: Net Debt Adjusted includes annual operating leases x 7Obs.2: Debt is considered in US GAAP for 2005 and 2006 and in IFRS since 2007
WTI HedgeWTI Hedge
We understand that our coverage level and price contracts are appropriate to
USD 150 70%
We understand that our coverage level and price contracts are appropriate to business needs and market reality
USD 130
50%
60%
USD 110
30%
40%
ke Prices
rage
Level
USD 70
USD 90
20%
30%
Stik
Cove
USD 50
USD 70
0%
10%
1S 2S 3S 4S 5S 6S
Minimum Maximum Current Position Average Strike
According to our hedging policy, defined by the risk committee
AgendaAgenda
Highlights
Airline Industry
Financial Result
Guidance and Fleet Plan
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2011 Guidance2011 Guidance
Guidance for2011
ActualJan Jun
Domestic Market
2011 Jan-Jun
Demand growth (RPK) 15% - 18% 21%
Supply growth (ASK) 10% - 13% 14%
Domestic 10% - 14% 14%
International 10% 13%
Load Factor 73% - 75% 74%
Domestic 67.5% - 70% 70%
International 83% 81%
New international frequency or destination 2 5
CASK ex-fuel -5% -3.6%
Assumptions Average WTI USD 93 USD 98*
Average US dollar rate R$ 1.78 1.62*
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* Accumulated until July 30, 2011
Average US dollar rate
Average WTI in R$ R$ 166 R$ 159
Fleet PlanFleet Plan
Total Fleet (end of period)
A340 -2 23
1212
163 168174
182
43
A33020
43
20
8
21
103
19
12
2224156 156
163
20A321- 9 9
A32086
88131 136 140 146
A3193 9275
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2Q11 2011 2012 2013 2014 2015
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B767 Airbus wide-body Airbus narrow-bodyB777 ATR-42
