SAS IR/STU
2000-08-15
SAS Group 2nd Quarter 2000 Analyst meeting
Copenhagen, August 14, 2000 SAS IR/STU
www.scandinavian.net
2000-08-15
Contents of 2nd Quarter 2000 presentation The Quarter in brief SAS International Hotels Business review Result improvement program Aircraft fleet Outlook Appendices SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
The Quarter in brief
SAS IR/STU
2000-08-15
SAS Group
A very encouraging 2nd Quarter Breaking trend in Business Class Passenger load factors sharply up Strong underlying cost development - unit costs down exempt Jet Fuel SAS International Hotels develops well Promising trading conditions SAS IR/STU
2000-08-15
SAS Group
Strong traffic growth and Business Class recovery 2nd Quarter Improved traffic growth (RPK) Business Class (RPK-C) Sharply improved cabin factor Yields
up 8% up 5% up 4.9 p.u. up 0,4%
EBITDAR
up 20% SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS Group
Cash flow from operations (EBITDAR) up 17% 1st Half 2000 MSEK
2000
1999
Change
Revenue
22 104
20 965
+5%
EBITDAR
2 075
1 769
+17%
53 496
+48%
Pre tax profit ex gains Pre-tax profit
443 732
SAS IR/STU
2000-08-15
SAS Group
Financial results - 2nd Quarter 2000 MSEK
2000
Revenue Op. inc. bef. depr. Gain on sales Pre-tax profit
1999
Change
11 799 1 184 276
11 260 924 46
+5% +28%
1 029
507
+103%
SAS IR/STU
2000-08-15
SAS Group
Operating results with market depreciation- 1st Half 2000 MSEK
2000
EBITDAR 2 075 Gain on sales +289 Depreciation -895 ∆ MV aircraft +732 Leasing (40%) -293 EBIT, market 1908
1999
Change
1 769 +433 -964 +679 -268 1649
+17%
+16% SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS Group
CFROI - approaching set hurdle rate
35% 30% 25% 20% 15% 10% 5%
96 03 96 09 97 03 97 09 98 03 98 09 99 03 99 09 00 06
0%
CFROI
Hurdle rate CFROI
SAS Group's key financial metric Focus on operating cash flow (EBITDAR) CFROI H1/2000 15% Hurdle rate through cycle >17-20% SAS IR/STU
2000-08-15
ROCE - passed through the bottom of the cycle
SAS Group
30% 25%
SAS market based ROCE H1/2000 10%
20% 15% 10% 5%
95 12 96 06 96 12 97 06 97 12 98 06 98 12 99 06 99 12 00 06
0%
ROCE, Market based
Hurdle rate through cycle >12%
Hurdle rate ROCE
SAS IR/STU
2000-08-15
SAS International Hotels
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Continued strong development Income before taxes (MSEK) 600
500
500
400
400
300
300
200
200
100
100
0
0
H1/2000
PBT
-100 -200
H1/1999
Gains
1993 1994 1995 1996 1997 1998 1999
SAS IR/STU
2000-08-15
SIH
Radisson SAS Hotels & Resorts - one additional hotel sold 1st Half 140
No. of hotels
120 100 80 60 40 20 0 1992 1993 1994 1995 1996 1997 1998 1999 Owned
Leased
Managed
Franchised
7 new hotels added 132 hotels in total Increased demand in most markets except Norway Radisson SAS Scandinavia Hotel Oslo sold All new hotels developed well
SAS IR/STU
2000-08-15
SIH
Radisson SAS Hotels & Resorts continuous positive value creation ROCE SAS International Hotels 16% 13% 10% 7% 4% 1994
1995
1996
1997 1998
1999 H1/00
GOP up from 29,9 to 30,9% ROCE up from 11,6% to 15,4% Strategy of reducing capital employed successful
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Business review SAS Airline
SAS IR/STU
2000-08-15
SAS
Business highlights - 1st Half Increased traffic growth - Business Class recovery Modest capacity increase Improved passenger load factors Strengthened home market position Strengthened position in Business Class segment Result improvement program as planned SAS IR/STU
2000-08-15
SAS
Other highlights in 2nd Quarter Air Botnia out of the "red" Successful turn-a-round in Norwegian regional carrier Widerøe British Midland develops Joint Venture with SAS and Lufthansa Spanair - strengthened position on Madrid
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Increased passenger load factors and growth trend in Business Class
SAS
RPK Business Class 1998-2000
Passenger load factor total system 1995-2000
Year on Year values
Moving 12 months values
25%
67%
20%
66%
15% 10%
65%
5%
64%
0% -5%
63%
-10%
62%
-15% JAN98
JUL
JAN99
JUL
JAN00
DEC94MAR JUN
SEP DEC95 MAR JUN SEP DEC96MAR JUN SEP DEC97 MAR JUN
SEP DEC98 MAR JUN SEP DEC99MAR JUN
JUL
SAS IR/STU
2000-08-15
Intercontinental routes return to 90% passenger load factors 1999- July 2000
Passenger load factors North Atlantic/ Asia Passenger load factor
100 90 80 70
JU L
M AY
JA N
M AR
NO V
JU L
SE P
M AY
JA N
M AR
60 Month
North Atlantic
Asia
SAS
Growth in Business Class on North Atlantic Traffic to/ from Chicago strong - important hub Passenger load factors back to "normal" peak levels Traffic "spill off" New capacity essential on long haul SAS IR/STU
2000-08-15
European routes - a breaking trend
SAS
1999- July 2000
130 120 110 100 90
Month
L JU
AY M
N
AR
JA
Economy Class
M
V NO
P SE
L
AY
JU
M
N JA
AR
80 M
G ro w th vs LY Inde x
Business Class/ Economy Class
Strong traffic growth Recovery in Business Class Increased market shares overall and in Business Class Modest capacity increase "boost" passenger load factors
Business Class SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Danish routes affected by aircraft introductory problems
SAS
1999 - July 2000 Passenger load factor
Continued capacity reductions Passenger load factor significantly improved Introductory problems deHavilland Q400
Passenger load factor
80 70 60
L JU
AR
AY M
JA N
M
NO V
L
P
JU
SE
AY
AR M
M
JA N
50 Month
Dansih domestic SAS IR/STU
2000-08-15
SAS
Reduced over-capacity on Norwegian domestic routes 1999 - July 2000 Passenger load factor
Passenger load factor
70
60
50
JU L
M AY
M AR
JA N
NO V
P
JU L
SE
M AY
JA N
M AR
40 Month
Norwegian domestic
Total market marginally down Continued capacity adjustments Passenger load factor still too low Seating reservation implemented SAS gain market shares SAS IR/STU
2000-08-15
SAS
Swedish domestic routes strong 1999- July 2000 Business Class/ Economy Class 125 115 105
JU L
M AY
M AR
JA N
NO V
JU L
SE P
M AY
M AR
95 JA N
Growth vs LY Index
135
Month
Economy Class
Business Class
Strong Swedish economy Continued strong growth Arlanda-Gothenburg and Arlanda-Malmö gain shares from secondary airport Bromma Arlanda Express Train stimulates traffic Boeing 737-800 introduced 08MAY SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS
SAS affiliates continue to add traffic growth 2000 vs 1999:
Q2/2000 Q2/2000 vs vs Q2/1999: Q2/1999: 9,0 8,0 RPK Growth
7,0 6,0 5,0
SAS RPK up 8% Total RPK growth SAS & Partners 12%
4,0 3,0 2,0 1,0 0,0
6m 2000
SAS Total SAS & Partners (excl STAR)
SAS IR/STU
2000-08-15
SAS
Yields marginally up in 2nd Quarter Total system - currency adjusted
Overall yields up 0,4% in Q2 Overall yields down 0,1% in H1 Growth in Business Class but still negative mix Continued yield pressure in Economy Class
0%
-1%
-2%
-3% H1/99
H1/00
SAS IR/STU
2000-08-15
SAS has not contributed to the recent over-capacity throughout 1999/2000
SAS
ASK SAS vs AEA Geographical Europe 14% Change month vs last year
12% 10% 8% 6%
AEA
4%
SAS
2% 0% -2%
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
-4% -6%
Month SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS
Creation of a Cargo subsidiary under evaluation New Global Cargo has been initiated Creation of a new SAS Cargo subsidiary in progress 1st Half 2000
Revenue tonnes Revenues
up 6% up 8%
SAS IR/STU
2000-08-15
SAS
Favorable cost development except jet fuel Index Last Year
Increase of 1,2% in 1st Half Down 2,6% adjusted for fuel costs
3% 2% 1%
Positively affected by
0%
– Result Improvement program
-1% -2% -3% H1/99
H1/00 SAS IR/STU
2000-08-15
SAS
Slightly increased unit cost January - June 2000 vs 1999
Adjusted H1/99
Commissions Fuel Government charges Personnel Other oper. net costs
TOTAL
1 1 1 6 4
089 130 751 546 628
H1/00
1 1 1 6 4
049 699 690 493 392
Var. %
3.7% (50.4%) 3.5% 0.8% 5.1%
Share of total var %
0.3% (3.8%) 0.4% 0.4% 1.6%
15 144 15 323 (1.2%) (1.2%)
Volume = average growth in ASK and RPK = 4,1% SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS
Estimated jet fuel expense for 2000 raised to MSEK 3 500 Brent Crude vs. Jet Fuel August 1997 - August 2000
35 30 25 20 15
Brent 1st Nearby Close
Jet CIF Cargoes NWE
00-08
00-06
00-04
00-02
99-12
99-10
99-08
99-06
99-04
99-02
98-12
98-10
98-08
98-06
98-04
98-02
97-12
97-10
10 97-08
US D ollar per B arrel
40
Spot Jet Fuel up 20 % since prognosis given in May 2000 Crude oil /Jet Fuel differential has not decreased as anticipated Further strengthening of USD vs SEK SAS IR/STU
2000-08-15
Result Improvement Program
SAS IR/STU
2000-08-15
SAS
Result Improvement Program 1999/00 MSEK 1550 achieved as of 2nd quarter 2000 Target by early 2001: 3 000 MSEK Area Cargo Catering & In-flight service IT & communications Distribution & Electronic channels Air crew Ground handling Technical maintenance Overhead & other Total
Targeted effect vs. 1998 100 MSEK 300 MSEK 250 MSEK 815 MSEK 610 MSEK 300 MSEK 310 MSEK 360 MSEK 3045 MSEK SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS
Approaching 2 million EuroBonus members Steady Steady growth Number Number of members during 2nd quarter increased by 3,9% to 1 959 000
SAS IR/STU
2000-08-15
Commissions to travel agencies - sale in Scandinavia 1997-2000
SAS
10 9 Commision (%)
8 7
Domestic
6 5
Intrascan
4 3
Europe
2 1
Intercont
0 1997
01-sep-97
01-jan-99
01-jan-00 SAS IR/STU
2000-08-15
Star AllianceTM -extending global lead United Airlines, SAS, Thai Airways, Air Canada, Varig, Air New Zealand, Ansett Australia, All Nippon Airways Singapore Airlines, Austrian Airlines Group, British Midland, Mexicana
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
A firmer organization of Star Alliance implemented Supervisory Function
Strategic Development Areas Fields of Responsibility
Alliance Management Board Chairman: Friedel Rödig (LH) Deputy Chairman: Bruce Harris (UA) Global Network
Market Presence
Seamless Service & Product Development
Ross MacCormack (AC)
Dieter Grotepass (LH)
Per Stendebakken (SK)
• Network Connectivity • Revenue Management • Regulatory Issues
• Marketing • Customer Communication Relations • Sales Strategy • Ground • Frequent Flyer Services Programs • Product • Third Market Development Strategies
Automation
Support
Management Function
Chief Executive Board
Tim Moore (UA)
• IT Integration • Automation Development
SAS IR/STU
2000-08-15
Electronic Channels current volumes of total sales 1st Half 2000
SAS
Travel Pass TPC (new in 1999) E-TIX Other Internet Total volume E-channels MSEK 1 500 10% of total passenger sales SAS IR/STU
2000-08-15
Aircraft fleet
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS
Major changes in SAS' production capacity - very modern fleet Seats Seats 190 190 -275 -275 180 180 75 75 -160 -160 90 90 -140 -140 50 50 -- 75 75
No. No. aircraft aircraft 14 14 (12) (12) 100 100 40 40 29 29
Aircraft Aircraft type type Boeing Boeing 767/ 767/ Airbus Airbus AA 330/340 330/340 Airbus Airbus A A 321 321 DC9/MD DC9/MD 80-90 80-90 Boeing Boeing 737 737 series series FF 50/ 50/ SAAB SAAB 2000/ 2000/ Q400 Q400
Aircraft Aircraft being being phased phased in in SAS IR/STU
2000-08-15
SAS
CAPEX 2.6 Billion USD Aircraft CAPEX1)1) as of June 2000 MUSD
1) 1)
2000
2001
2002
2003-
520
740
650
680
10 Airbus A340/330-300 12 Airbus A321 16 Boeing 737 16 deHavilland Q400 Other investments in SAS 800-900 MSEK annually
Not reduced by prepayments to manufacturers SAS IR/STU
2000-08-15
Outlook 2000
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Continued favorable macroeconomic outlook SAS' main markets Sweden: • Export, consumption and GDP stronger
UK: • GDP +3%
US: • GDP +3% (down.)
Norway: • GDP 2.5-3% • Int. rates uncertain
Euroland: Euroland: • Strong growth Germany & Italy catching up
Japan: • Slightly better but from low level
Denmark: • Better growth
Asia excl. excl. Japan: • Continued recovery in most regions SAS IR/STU
2000-08-15
July traffic figures- strong Strong growth and sharply increased load factors Business Class +13,5% - Economy Class +8,0%
SAS Total Intercontinental Europe Domestic and Intrascandinavian
Passengertraffic (RPK) +8,8% +10,2% +9,5% +5,9%
Seat capacity (ASK) +1,0% +1,9% +1,7% -1,1%
Cabinfactor +5,5 p.u.
SAS IR/STU
2000-08-15
Operating key figures - year 2000 Increased traffic growth scenario Reduced yield pressure Underlying unit costs down Key figure ASK Frequencies
2000 Up approx 3% Up 1%
RPK Passenger yield (currency adjusted) Unit costs
Up approx. 8% +/- 0 Marginally up
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
The Board of Directors Assessment for full year 2000: Full year forecast from February 17 maintained Reduced unit cost except jet fuel Jet fuel expense estimated at MSEK 3500 for 2000 as a whole Income before taxes ex gains - around MSEK 1000 SAS IR/STU
2000-08-15
SAS IR/STU
2000-08-15
APPENDICES
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Long haul business case
SAS IR/STU
2000-08-15
Decision to expand long haul business Order of 10 Airbus A 340/330
First delivery 2nd Quarter 2001
6 A 340-300's and 4 A 330300's Cost / ASK down 12-15% vs. B 767 (ex. cargo contr,) Seat capacity up 45% on long haul routes Cargo capacity up 40-45% Investment approx 10 BSEK SAS IR/STU
2000-08-15
Low market share on intercontinental traffic - large natural catchment area
SAS market share Scandinavia- Asia/ North America is 25%
Natural catchment area 80 mill. people higher on routes to Asia
Scandinavia 18 mill. people
Home market 80-100 mill. people
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Fastest connectivity between Oslo and most European cities SAS London Paris Helsinki Brussels Frankfurt Zurich Nice Munich Manchester Hamburg
KLM Amsterdam
Dusseldorf Prag Malaga Rome Barcelona Milan Reykjavik Alicante Vienna
SK KL
Based on the twenty largest traffic flows between Oslo and Europe (APM) SAS IR/STU
2000-08-15
Fastest connectivity between Oslo and USA support long haul business case
SAS New York Minneapolis San Francisco Miami Chicago Orlando Boston Seattle
KLM Los Angeles Houston
SK KL
Based on the ten largest traffic flows between Oslo and USA (APM) * Oslo = Gardermoen & Torp SAS IR/STU
2000-08-15
Punctual and efficient hub supports long haul decision (Major hubs AEA punctuality statistics) Delay >15 minutes
Copenhagen Stockholm Helsinki Oslo London LHR Amsterdam
18,3% 18,5% 18,9% 22,3% 25,7% 30,3%
Zurich Frankfurt Brussels Paris CDG Rome Madrid Milan Malpensa
32,5% 33,5% 35,4% 36,4% 37,4% 48,4% 54,0%
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Long haul - natural growth for SAS Current market share artificially low - 25% Capacity increase to absorb target market share of about 30% 40-45 more Economy Class passengers needed to break-even vs B 767
Positive cargo contribution Generic growth in traffic system - positive feeder effects SAS IR/STU
2000-08-15
Almost 30% of SAS traffic flows are within Scandinavia North America 21% Scandinavia 30%
UK
10%
15%
Asia
24%
Rest of Europe SAS IR/STU
2000-08-15
New larger short haul aircraft Decision to purchase 12 Airbus A321-100
First delivery 2nd Quarter 2001
Natural link to long haul business expansion Cost / ASK down 13% vs. MD 80's Seat capacity up 33% Ideal for peak periods and constrained airports 4,5 BSEK total investment SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
TM Star AllianceTM and other partnerships
SAS IR/STU
2000-08-15
SAS
SAS equity linked regional partners owned 25-100%
Traffic system Partners 20%
49%
SAS IR/STU
2000-08-15
Increased alliance turbulence BRITISH MIDLAND MEXICANA KLM
'WINGS'
?
NORTHWEST
?
SAS LUFTHANSA UNITED AIR CANADA VARIG THAI
ALITALIA
BRITISH AIRWAYS AMERICAN CANADIAN QANTAS CATHAY
CONTINENTAL
? IBERIA FINNAIR LAN CHILE
?
TAP AOM
SWISSAIR SABENA
CROSSAIR TURKISH AIR LITTORAL
ANSETT AIR NEW ZEALAND ALL NIPPON SINGAPORE
AUSTRIAN TYROLEAN LAUDA AIR AIR EUROPE
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
British Midland Added to SAS' Joint Ventures SAS capacity allocated Between Finland/Scandinavia and Germany Non-SAS capacity Continued positive development Toronto -Copenhagen MAY/JUN cabin factor 90% Established LHR -MPX/FCO/MAD SAS IR/STU
2000-08-15
British Midland has joined STARTM Alliance SAS to sell 20% to Lufthansa Joint ventures established Total sales proceed 91,4 MGBP Gain on Sale approx. MSEK 1000 (Pre-tax) during 2000 SAS IR/STU
2000-08-15
Electronic channels
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS
www.scandinavian.net SMS SMS Co-surf Co-surf
Voice Voice
WAP WAP
Contact Center Center Contact
D-TV TV D-
Call back back Call
SAS IR/STU
2000-08-15
SAS
A marketplace with very high online penetration
%
Online penetration of individuals, 2000-2003 70 60 50 40 30 20 10 0
Sweden Norway Denmark Finland 2000
2001
2002
US
2003
Source: 1999 Jupiter Strategic Planning Services/MMSC99-V1 SAS IR/STU
2000-08-15
www.scandinavian net surpassing 300 000 profiles as of July 2000 306 265 profiles registered 650 000 - 800 000 visitor sessions per month >200 000 unique visitors per month Quality standards met
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Travel Pass Corporate - further positive developments
Total No of TPC-Cards
Ju n
Ap r
Fe b
De c
Ok t
Au g
Ju n
35 000 30 000 25 000 20 000 15 000 10 000 5 000 0
Total
30 000 cards outstanding Domestic Norway and Sweden largest volumes Skyways implemented as partner SAS IR/STU
2000-08-15
Financials and aircraft fleet data
SAS IR/STU
2000-08-15
SAS Group
SAS Group Result Before depreciation and Before taxes MSEK 1 400 1 200 1 000 800 600 400 200 0 JAN-JUN99 Income bef depreciation
JAN-JUN00 Income bef taxes SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS Group
Balance Sheet MSEK
30JUN00
Liquid funds Other interest-bearing assets Aircraft Other assets
31DEC99
6 232 3 979 13 410 20 141
8 3 11 19
368 356 302 601
Total assets
43 762
42 627
Operating liabilities Interest-bearing liabilities Subordinated debenture loan Minority interests Equity
12 892 12 555 782 18 17 515
13 143 11 626 772 25 17 061
Total liabilities and equity
43 762
42 627
Net debt
3 126
674 SAS IR/STU
2000-08-15
SAS Group Investments MSEK
JAN-JUN00
Aircraft and spare parts Prepayments aircraft, net Other
2 650 1 396 431
Total
4 477
SAS IR/STU
2000-08-15
SAS Group
Changes in Financial Position MSEK Cash flow from operations Change in working capital
Net financing from operations Investments, advance payments Sales of fixed assets, etc. Payment to mother companies
Financing surplus Changes in external financing, net
Change in liquid funds
January - June 2000
1999
1 057 + 69
833 - 317
1 126
516
- 4 477 + 1 673 - 770
- 3 003 + 866 - 957
- 2 448
- 2 578
+ 312
- 26
- 2 136
- 2 604 SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Unit Cost Effected by Fuel January - June 2000 vs 1999 MSEK Adjusted H1/99
Commissions Fuel Government charges Personnel Other oper. net costs
TOTAL
1 1 1 6 4
089 130 751 546 628
H1/00
1 1 1 6 4
049 699 690 493 392
Var. %
3.7% (50.4%) 3.5% 0.8% 5.1%
Share of total var %
0.3% (3.8%) 0.4% 0.4% 1.6%
15 144 15 323 (1.2%) (1.2%)
Volume = average growth in ASK and RPK = 4,1% SAS IR/STU
2000-08-15
SAS
Result Improvement Program 1999/00 MSEK 1550 achieved as of 2nd quarter 2000 Increased pace during rest of year 2000 Area Cargo Catering & In-flight service IT & communications Distribution & Electronic channels Air crew Ground handling Technical maintenance Overhead & other Total
Achived effect vs. 1998 70 MSEK 0 MSEK 100 MSEK 580 MSEK 300 MSEK 160 MSEK 190 MSEK 150 MSEK 1550 MSEK SAS IR/STU
2000-08-15
Improved Productivity Development +5% +4% +3% +2% +1% +0% -1% -2% -3% -4% JAN-JUN99
JAN-JUN00
Measure is average change of RPK /ASK over change in number of full time employees SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS Airline
Currency Effects 2000 vs 1999 (MSEK) JAN-JUN
Total revenues Total costs Forward cover costs & working cap.
- 186 + 230 - 70
Income bef. depr.
- 26
Financial items
+ 52
Income before tax
+ 26 SAS IR/STU
2000-08-15
SAS Airline Currency Effects JAN-JUN 2000 vs 1999
Total revenues & costs: (Total +44 MSEK) Major approx. effects: USD -81 DKK +107 NOK -35 EUR -61 Asian curr. +96 All others +18
Working capital:
(Total -63 MSEK) 1999 2000
+49 -14
Financial items:
(Total +52 MSEK)
Forward cover costs: (Total -7 MSEK)
1999 2000
1999 2000
Grand total: +26 MSEK
-26 -33
+6 +58
SAS IR/STU
2000-08-15
SAS Group
Income by Business Unit (MSEK)
January - June 2000
1999
SAS SAS International Hotels Other operations/Group elim.
335 386 + 11
277 229 - 10
Income before taxes
732
496 SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS Group Development of Income before Taxes 2 000 +235
+1 003
MSEK
1 500
1 000
496 500
+157
-940
+26
732
-235
-10
Change in revenues: +1 228 MSEK
0 JANJUN99
Curr
Yield
Traffic
Oth rev Costs etc Gain on sales
SIH
JANJUN00
SAS IR/STU
2000-08-15
SAS Group Development of Equity/Assets Ratio 45% 40% 35% 30% 25% 20%
00-06
99-12
99-06
98-12
98-06
97-12
97-06
96-12
96-06
95-12
95-06
94-12
94-06
93-12
93-06
10%
92-12
15%
SAS IR/STU
2000-08-15
SAS Group
Income before taxes 4 000
Bars = Quarterly inco me
Line = Mo ving 12 m onths result
3 000
1 000 0 -1 000
Bars = quarterly
Q1-00
Q3-99
Q1-99
Q3-98
Q1-98
Q3-97
Q1-97
Q3-96
Q1-96
Q3-95
Q1-95
Q3-94
Q1-94
Q3-93
Q1-93
-3 000
Q3-92
-2 000
Q1-92
MSEK
2 000
Line = moving 4 quarters SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS (incl. SAS Trading)
Revenues (as is) MSEK
JAN-JUN00
JAN-JUN99
curr adj 99
Passenger revenues Cargo revenues Other traffic revenues Other revenues
15 747 1 173 476 3 257
14 638 1 088 457 3 376
14 436 1 130 478 3 329
TOTAL REVENUES
20 653 19 559 19 373
SAS IR/STU
2000-08-15
SAS (incl. SAS Trading)
Operating Costs (as is) MSEK
JAN-JUN00
JAN-JUN99
curr adj 99
6 655 732 1 072 1 739 1 720 921 979 1 136 4 650
6 653 679 1 060 1 027 1 739 835 937 1 018 4 803
6 447 717 1 050 1 093 1 688 812 915 1 021 4 848
Personnel costs Leasing costs (aircraft) Sales costs Fuel Governmental charges Meals costs Handling costs Maintenance costs Other costs
TOTAL COSTS
19 604 18 751 18 591 SAS IR/STU
2000-08-15
Financial net January - June 2000SAS Group (MSEK) 00-06-30 99-06-30 Difference Interest net and others
-68
-91
23
Exchange rate differences 63
19
44
-5
-72
67
-0,4%
-3,8%
3,4%
Financial net (in % p.a. of average net debt)
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Development and Break Down of Net SAS Group
Debt 00630 (MSEK) 000630 Cash 6 232 Other interest bearing assets 4 012 Interest bearing liabilities
990630 Difference 5 425 807 2 223
1 789
-13 370
-12 174
-1 196
-3 126
-4 526
1 400
Net debt
SAS IR/STU
2000-08-15
Gross interest income / expenses on liquidity and debt (MSEK) Average liquidity Interest income Return (% p.a.) Average gross debt Interest expenses and others Interest cost (% p.a.) Average net debt Interest net and others Interest net (% p.a.) Exchange rate differences Exchange rate differences (% p.a.) Financial net Financial net (% p.a.)
SAS Group
0001-06 9 887 235 4,8% 12 312 -303 -4,9% 2 425 -68 -5,6% 63 5,2% -5 -0,4% SAS IR/STU
2000-08-15
SAS Group
Development of net debt 9112-0006
Average Average -92 -92 MSEK13.000 MSEK13.000
Average Average -93 -93 MSEK MSEK15.900 15.900
Average Average -- 94 94 MSEK MSEK 9.700 9.700
Average Average -95 -95 MSEK MSEK 4.750 4.750
Average Average -96 -96 MSEK MSEK2.350 2.350
Average Average -97 -97 MSEK MSEK 1.870 1.870
Average Average -98 -98 MSEK MSEK 1.950 1.950
Average Average -99 -99 Average Average -0006 -0006 MSEK MSEK4.310 4.310 MSEK MSEK2.425 2.425
18 18 000 000 16 16 000 000 14 14 000 000
MSEK MSEK
12 12 000 000 10 10 000 000 88 000 000 66 000 000 44 000 000 22 000 000 00 91-12 91-12
92-12 92-12
93-12 93-12
94-12 94-12
95-12 95-12
96-12 96-12
97-12 97-12
98-12 98-12
99-12 99-12 SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS Aircraft Fleet Aircraft in SAS Traffic 30JUN00
31MAR00
31DEC99
13 49 18 8 29 6 5 3 19 3 0 4 20 5
13 49 18 8 29 6 0 8 19 3 4 3 20 5
13 49 18 8 29 1 0 8 20 4 5 0 20 5
182
185
Boeing 767-300 MD-81/82/83 MD-87 MD-90 Boeing 737-600 Boeing 737-700 Boeing 737-800 DC-9-81 DC-9-41 DC-9-21 Fokker F28 de Havilland Q400 Fokker F50 SAAB 2000
TOTAL
180 SAS IR/STU
2000-08-15
Fleet phase out in progress three less units during Q2 Change in Q2
Boeing 767-300 MD-80 MD-90 Boeing 737 DC-9-81 DC-9-41 DC-9-21 Boeing 737-300 Fokker F28 Fokker F50 DeHavilland Q400 SAAB 2000
TOTAL
+5 -5 -4 +1 -
SAS
Changes until end year 2000
Unchanged Unchanged Unchanged 10 new deliveries Phase out 2000 Phase out 2001 Phase out 2000 Flexible capacity, wet lease Completely phased out Gradual phase out 10 new deliveries Gradual phase out
-3 SAS IR/STU
2000-08-15
Operating data
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Regularity Performed flights of total scheduled (axis shows internal standard) 100% 98% 96% 94% 92% 90% 88% JAN
FEB
MAR
APR
1997
MAY
JUN
JUL
1998
AUG
SEP
OCT
1999
NOV
DEC
2000 SAS IR/STU
2000-08-15
Punctuality Flights delayed less than 15 min (axis shows internal standard) 100% 95% 90% 85% 80% 75% 70% 65% JAN
FEB
1997
MAR
APR
MAY
1998
JUN
JUL
AUG
SEP
OCT
NOV
1999
DEC
2000 SAS IR/STU
2000-08-15
Share of Fullfare Traffic Total System Moving 12 months values 34% 33% 32% 31% 30% 29% 28%
DEC94 MAR JUN SEP DEC95 MAR JUN SEP DEC96 MAR JUN SEP DEC97 MAR JUN SEP DEC98 MAR JUN SEP DEC99 MAR JUN
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Monthly Change in Total M-class Traffic JAN98 - JUN00
25% 20% 15% 10%
5% 0% -5% -10%
JAN98
JUL
JAN99
JUL
JAN00
JUL
SAS IR/STU
2000-08-15
Partner Synergies Code-Sharing with 24 Partners Number of destinations 31DEC99
30JUN00
94 +47 +111 252
92 +43 +115 250
10-16JAN00
07-13AUG00
434 568 1 077 2 079
404 553 1 071 2 028
SAS network SAS code-shared with LH SAS code-shared with other TOTAL Number of frequencies/day SAS operated, no code-sharing Partner flts on SAS SAS comm. flts on partners TOTAL
SAS IR/STU
2000-08-15
SAS Airline
Currency Distribution 2000 Revenues
Costs Major deficiency currencies: USD,DKK
9%
10% 31%
14%
11%
14%
21%
SEK NOK DKK USD EUR other
6% 26%
19% 16%
SEK NOK DKK USD EUR other
23%
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Traffic and Yield 2nd Quarter 2000 vs 1999
SAS Total Scheduled Production (mill ASK) Traffic (mill RPK) Cabin factor (%) C-class share (%) Yield (öre/RPK) Currency adj. yield
2nd Quarter
Index, variance
2000
1999
8 492 6 008 70,7 29,9 138,7 138,7
8 466 5 571 65,8 30,7 141,7 138,1
100 108 + 4,9 - 0,7 98 100 SAS IR/STU
2000-08-15
Production and Traffic 2nd Quarter 2000 vs 1999 Route Sector Scheduled
Production ASK
Traffic RPK
Cabin factor %
SAS Total
100
108
+ 4,9
100 101 93 90 92 115
109 107 102 98 103 116
+ 7,0 + 3,6 + 5,7 + 5,8 + 6,9 + 0,6
Intercontinental Europe Intrascandinavian Denmark/Greenland Norway Sweden
SAS IR/STU
2000-08-15
Traffic Analysis 2nd Quarter 2000 vs 1999 Route Sector Scheduled
Fullfare RPK-C
SAS Total
105
109
108
109 106 100 87 94 114
110 107 103 108 109 118
109 107 102 98 103 116
Intercontinental Europe Intrascandinavian Denmark/Greenland Norway Sweden
Discounted Total traffic RPK-M RPK
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Passenger Yield 2nd Quarter 2000 vs 1999 Route Sector Scheduled
Nominal yield
Currency effect
Adjusted yield
SAS Total
98
103
100
103 98 96 90 100 96
98 103 104 108 106 100
101 101 100 97 106 97
Intercontinental Europe Intrascandinavian Denmark/Greenland Norway Sweden
SAS IR/STU
2000-08-15
Traffic and Yield JAN-JUN 2000 vs 1999
SAS Total Scheduled Production (mill ASK) Traffic (mill RPK) Cabin factor (%) C-class share (%) Yield (öre/RPK) Currency adj. yield
1st Half
2000
Index,
1999
variance
16 744 16 528 11 000 10 283 65,7 62,2 30,5 31,1 139,8 141,9 139,8 139,9
101 107 + 3,5 - 0,5 99 100 SAS IR/STU
2000-08-15
Production and Traffic JAN-JUN 2000 vs 1999 Route Sector Scheduled
Production ASK
Traffic RPK
Cabin factor %
SAS Total
101
107
+ 3,5
99 102 96 89 95 116
107 106 102 95 104 117
+ 5,9 + 2,1 + 3,1 + 4,1 + 4,6 + 0,3
Intercontinental Europe Intrascandinavian Denmark/Greenland Norway Sweden
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Traffic Analysis JAN-JUN 2000 vs 1999 Route Sector Scheduled
Fullfare RPK-C
SAS Total
105
108
107
105 105 102 84 101 115
108 107 101 107 105 118
107 106 102 95 104 117
Intercontinental Europe Intrascandinavian Denmark/Greenland Norway Sweden
Discounted Total traffic RPK-M RPK
SAS IR/STU
2000-08-15
Passenger Yield JAN-JUN 2000 vs 1999 Route Sector Scheduled
Nominal yield
Currency effect
Adjusted yield
SAS Total
99
101
100
102 97 99 90 104 97
98 102 102 107 103 100
100 99 101 96 107 97
Intercontinental Europe Intrascandinavian Denmark/Greenland Norway Sweden
SAS IR/STU
2000-08-15
SAS Gross Profit Margin Moving 12 months values 16% 14% 12% 10% 8% 6% 4% 2% 0% DEC94
JUN
DEC95
JUN
DEC96
JUN
DEC97
JUN
DEC98
JUN
DEC99
JUN
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
Unit Cost Definition The unit cost change is calculated as follows: ● Costs: Operating expenses excluding depreciation and lease costs for aircraft and reduced with other external revenue Last year figure is for comparison adjusted with currency effect ●
Volume growth rate: Average growth rate of ASK and RPK
●
Net unit cost change: Growth rate of comparable costs in relation to volume growth rate SAS IR/STU
2000-08-15
Redefinition of Passenger Revenues From 01JAN00 some earlier passenger revenue deductions are classified as costs To make yield comparisons, passenger revenues JAN-JUN00 should be reduced by 200 MSEK when comparing with the revenues reported last year The full year effect for year 2000 will be around 400 MSEK The figures and comparisons reported now are adjusted and comparable SAS IR/STU
2000-08-15
SAS Group
SAS Investor Relations on the Internet
http://www.scandinavian.net SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS Group
Summary recent analyst's recommendations Buy/ Strong buy Alfred Berg -Aros Securities- Aragon - Goldman Sachs- Gudme Raaschou- Handelsbanken Markets -First Securities -Den Danske Bank - BG Bank - Sundal Collier & Co. - Dresdner Kleinworth Benson Neutral Morgan Stanley dean Witter - Merril Lynch -Karl Johan Fonds Christiania Markets - Julius Bär - Carnegie Sell Enskilda Securities SAS IR/STU
2000-08-15
SAS Group
Discount to book - increase in spite surplus values Surplus values of a/c fleet MSEK 4 800 Strategic stakes SIH SMART Flight Academy British Midland Other
m
ar -9 ju 6 lno 96 v9 m 6 ar -9 7 ju l-9 no 7 v97 m ar -9 ju 8 lno 98 v9 m 8 ar -9 ju 9 lno 99 v9 m 9 ar -0 0
25 000 23 000 21 000 19 000 17 000 15 000 13 000 11 000 9 000 7 000 5 000
Book Equity
Market Cap
SAS IR/STU
2000-08-15
SAS Group
Swedish share still at significant discount SAS Share Prices (SEK)
1998 - 2000
4-aug-00
Deviation from Mathematical Parity
30% 25% 20% 15% 10% 5% 0% -5% j -10% -15% -20% -25% -30%
m
m
j
a
o
SAS Danmark A/S
j
m
m
j
s
SAS Norge ASA
n
j
m
m
j
SAS Sverige AB SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
SAS Group
SAS lagging behind peers SAS Market Capitalization vs. European Peers (Rebase 01 JAN 1999)
115
Index
105
Peers SAS
95
85
75
jan-99
mar-99
maj-99
jul-99
sep-99
no v-99
jan-00
mar-00
maj-00
jul-00
SAS IR/STU
2000-08-15
Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail:
[email protected] --- Homepage: www.scandinavian.net -- Results Jan - Jun 2000
