Finnair Group Interim results January-June 2001
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Transcript of Finnair Group Interim results January-June 2001
Finnair Group Interim results
January-June 2001
A strong downturn in the industry -
Finnair one of the best performers
Industry market conditions
• Total demand has clearly slowed down• Airline profitability has weakened drastically• Passenger and cargo volumes are declining• Cabin factors among European airlines has
fallen, especially on North American routes
Finnair at the forefront
• Finnair´s strong market position well maintained
• Profitability well above the industry average• Healthy cashflow, strong balance sheet• Cost per unit trend good for eight quarters
already• Improved productivity• Strong growth in on-line sales• Quality of operations on target
– punctuality and quality among best in Europe
Wind chill factors
• First weaker quarter since autumn 1999• Business travel on the decline, weaker
domestic demand• High cost of fuel and the dollar• Low visibility due to uncertainty of global
economy• Operating result expected to fall clearly below
2000 result
Q22001
Q22000
H12001
H12000
Turnover 440.2 414.2 860.3 813.0
EBITDAR, excl. book gains 69.3 70.2 117.5 109.9% of turnover 15.7 16.9 13.7 13.5
EBIT 30.3 55.2 45.0 43.9% of turnover 6.9 % 13.3 % 5.2 % 5.4 %
EBIT excl. book gains 23.1 32.0 28.6 20.0% of turnover 5.2 % 7.7 % 3.3 % 2.5 %
Profit before taxes and extraordinary items 30.8 57.1 46.1 52.0% of turnover 7.0 % 13.8 % 5.4 % 6.4 %
Earnings per share, EUR 0.23 0.47 0.34 0.37Equity per share, EUR 7.54 7.28
Net debt, MEUR 152 86Equity ratio, % 42.0 43.7Gearing, % 23.7 13.9
Key figuresMEUR
Operating result for H1/2001 remained at the previous year’s
level, but Q2 was weaker • January-June 2001 profit after financial items and excluding
revenues from the sale of assets, amounted to EUR 28.6
million (MEUR 28,1), Q2 MEUR 22,6 (33,9 MEUR)
• Q2 yield: -1.6 % (per RPK), +2.6 % (per RTK)
• Q2 unit costs: -1,0 %
• Q2 operating costs +9.5 %, excl. jet fuel +7.8 %
• Q2 jet fuel costs +24.9 % (9.4 MEUR)
• H1 Staff productivity +5 %
Finnair trafficJanuary-July 2001
Passengers DemandRPK
ProductionASK
CF % Change%-units
Scheduled- Intl. premium- Intl. tourist class
+3.1 %-3.4 %+9.6 %
+6.5 % +6.8 % 61.0 % -0.2
Leisure +1.4 % -1.8 % -3.4 % 90.2 % +1.5
Total traffic +2.8 % +3.1 % +3.4 % 69.9 % -0.2
CF %: Cabin factor
Growth in Business and Tourist classInternational scheduled traffic
-20,0
-15,0
-10,0
-5,0
0,0
5,0
10,0
15,0
20,0
01.00 02.00 03.00 04.00 05.00 06.00 07.00 08.00 09.00 10.00 11.00 12.00 01.01 02.01 03.01 04.01 05.01 06.01 07.01
%
Business class Tourist class
40
50
60
70
80
90
100
Total traffic Europe N.-America Far East Domestic Scheduled Leisure
2001 2000
Cabin factorJanuary-July 2001 & 2000
%
-15
-10
-5
0
5
10
15
20
25
Total traffic Europe N.-America Far East Domestic Scheduled Leisure
ASK RPK
Demand (RPK) and production (ASK)January-July 2001
%
Growth in turnover January-June 2001 +5.8 %
MEUR
0100200300400500600700800900
1000
1997 1998 1999 2000 2001
Q2Q1
Second Quarter EBIT1997-2001
0
10
20
30
40
50
60
1997 1998 1999 2000 2001
0
4
8
12
16%
EBIT as % of turnover
MEUR
-10
-5
0
5
10
15
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
YieldUnit costsUnit costs excl. jet fuelUnit costs excl. exceptional itemsUnit costs excl. exceptional items and fuel
Yield and unit cost development Year on year change
1999 2000
%
2001
-30
-20
-10
0
10
20
30
40
50
60
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
EBIT from operations Book gains
MEUR
1998 1999
EBIT per quarter
2000 2001
-40
-30
-20
-10
0
10
20
30
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
MEUR
1998 1999
Change in EBIT per quarterExcluding book gains from asset disposals
2000
Change excl. exceptional items in the closing of accounts and due to change of fiscal year
*
*
2001
*
EBITDARExcluding gains from asset disposals
0
50
100
150
200
250
300
1999 2000 H1 2000 H1 2001
MEUR
Cash flow and Capex
0
50
100
150
200
250
300
1999/ 2000 2000 H1 2000 H1 2001
Cash flow from operations, incl. proceeds from asset disposals
Investments incl. predelivery payments
MEUR
Net debt June 30, 200117.6 % of turnoverMEUR
0
50
100
150
200
250
300
350
1997/ 98 1998/ 99 1999/ 00 2000 Q2 2001
I nterest bearing debt
Liquid funds
Strong balance sheetEquity ratio
%
35
40
45
50
1997/98 1998/99 1999/00 2000 Q2 2001
Gearing%
-10
-5
0
5
10
15
20
25
30
1997/98 1998/99 1999/00 2000 Q2 2001
ROCE and ROE rolling 12 months
0
3
6
9
12
15
18
Q4 1999 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001 Q2 2001
ROE ROCE
%
0
2
4
6
8
10
12
1996/ 97 1997/ 98 1998/ 99 1999/ 00 2000 Q2 2001
Eguity per share Share price, high Share price, low
EUR
Finnair sharePrice to Book
Finnair GroupBusiness Areas as of Jan 1, 2001
C argo L e isu re S ch ed u ledP assen g er
T ra ffic
A v iationS erv ices
T ravelS erv ices
S up po rtS erv ices
G rou p S trategyresou rces
Finnair Group business areas
Q1 2001 Q2 2001 H1 2001 Q1 2001 Q2 2001 H1 2001MEURScheduled Traffic 295.9 313.3 609.2 18.1 18.4 36.5Leisure 93.9 71.0 164.9 0.4 -0.8 -0.4Cargo 28.6 33.5 62.1 -1.1 -0.1 -1.2Aviation Services 116.6 129.2 245.8 1.3 11.8 13.1Travel Services 22.5 26.5 49 1.0 2.1 3.1Support Services 24.2 22.3 46.5 -5.1 -1.0 -6.1- less internal sales -161.7 -155.5 -317.2Total 420.1 440.2 860.3 14.7 30.3 45.0Previous year 398.8 414.2 813.0 -11.3 55.2 43.9Change % 5.3 6.3 5.8 -45.1 2.5
TURNOVER EBIT
Capital employed per Business AreaJanuary 1, 2001
502
356
116
13 11 60
100
200
300
400
500
600
MEU
R
Scheduledtraffic
Supportservices
Aviationservices
Leisure Cargo Travel services
Group personnel
7 000
8 000
9 000
10 000
11 000
12 000
1997/98 1998/99 1999/00 9m 2000 6m 2001
-2,3%
Group Business AreasPersonnel Jan-Jun 2001
4580
3570
1442
499 418 339
0
1000
2000
3000
4000
5000
Aviationservices
Scheduledtraffic
Travel services Supportservices
Cargo Leisure
From here onward• Increase of capacity for winter season approx. 2%
in tonne and 6% in passenger kilometers• New growth in Asia and Baltic region
– fourth MD-11 into regular scheduled service– two leased B757 into leisure traffic– Startup of Aero and development of feeder traffic
• More in-depth cooperation within alliance• Operating costs
– distribution and purchasing
• Electronic and mobile eFinnair
“Wind chill foreseen, but long term confidence remains”
Appendices
Changes in Passenger Traffic & Capacity
TOTAL TRAFFIC
-15
-10
-5
0
5
10
15
20
25
apr
jun
aug
oct
dec
feb
apr
jun
aug
oct
dec
feb
apr
jun
aug
oct
dec
feb ap
r
jun
%
Traffic - Revenue Passenger-Km
Capacity - Available Seat-Km
19991998 2000 2001
Changes in Passenger Traffic & Capacity
EUROPE
-20
-15
-10
-5
0
5
10
15
20
ap
r
jun
au
g
oct
de
c
feb
ap
r
jun
au
g
oct
de
c
feb
ap
r
jun
au
g
oct
de
c
feb
ap
r
jun
%
Traffic - Revenue Passenger-Km
Capacity - Available Seat-Km
19991998 2000 2001
Changes in Passenger Traffic & Capacity
ATLANTIC
-60
-50
-40
-30
-20
-10
0
10
20
30
40
apr
jun
aug
oct
dec
feb
apr
jun
aug
oct
dec
feb
apr
jun
aug
oct
dec
feb
apr
jun
%
Traffic - Revenue Passenger-Km
Capacity - Available Seat-Km
19991998 2000 2001
Changes in Passenger Traffic & Capacity
FAR EAST
-40
-30
-20
-10
0
10
20
30
40
50
apr
jun
aug
oct
dec
feb
apr
jun
aug
oct
dec
feb
apr
jun
aug
oct
dec
feb
apr
jun
%
Traffic - Revenue Passenger-Km
Capacity - Available Seat-Km
19991998 2000 2001
Changes in Passenger Traffic & Capacity
DOMESTIC
-60
-50
-40
-30
-20
-10
0
10
20
30
apr
jun
aug
oct
dec
feb
apr
jun
aug
oct
dec
feb
apr
jun
aug
oct
dec
feb
apr
jun
%
Traffic - Revenue Passenger-Km
Capacity - Available Seat-Km
19991998 2000 2001
Changes in Passenger Traffic & Capacity
LEISURE
-30
-20
-10
0
10
20
30
40
50
ap
r
jun
au
g
oct
de
c
feb
ap
r
jun
au
g
oct
de
c
feb
ap
r
jun
au
g
oct
de
c
feb
ap
r
jun
%
Traffic - Revenue Passenger-Km
Capacity - Available Seat-Km
19991998 2000 2001
SHARE OF BUSINESS CLASS
International scheduled traffic - 12 mths rolling average
24.7
24.3
23,0
23,5
24,0
24,5
25,0
25,5
26,0
26,5
01.00 02.00 03.00 04.00 05.00 06.00 07.00 08.00 09.00 10.00 11.00 12.00 01.01 02.01 03.01 04.01 05.01 06.01 07.01
%
TRAFFIC GROWTH vs PASSENGER CABIN FACTOR
12 m rolling sum
-4,0
-2,0
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
01.9
6
01.9
7
01.9
8
01.9
9
01.0
0
01.0
1
RPK
Y-o-y growth %
58,0
60,0
62,0
64,0
66,0
68,0
70,0
72,0
74,0
76,0
cf %
change, y-o-y (left) cabin factor (right)
Jet fuel pricesJ et Fuel 1996-2001; USD / tonne 20.8.2001
100
150
200
250
300
350
400
01/96 07/96 01/97 07/97 01/98 07/98 01/99 07/99 01/00 07/00 01/01 07/01