Virgin Australia Holdings Limited · ASX:VGN
Virgin Australia — Virgin Blue Holdings — FY2008 Earnings Presentation
13 slides from Virgin Australia's earnings presentation, Aug 19, 2008
Slide 1: Financial Results Year Ended 30 June 2008
Financial Results Year Ended 30 June 2008 Brett Godfrey Chief Executive Officer 19 August 2008
Slide 2: Key Highlights
Key Highlights Underlying Net Profit after Tax $140.5 million New Initiatives $42.8 million, principally VAustralia RASK up 0.7% despite competitive environment New Initiatives Premium Economy introduced Domestic New Zealand launched Embraer jets introduced, re entered CBR market V Australia imminen
Slide 3: Summary Results
Summary Results Year ended 30 June 2008 2008 2007 Increase / $m $m Decrease Revenue 2,352 2,169 + 8.4 % EBITDAR 422 548 -23.0% EBIT 168 324 -48.1% Net Profit after tax – Total 98 216 -54.6% business New initiatives, after tax 43 6 n/a Net Profit after tax – Underlying 141 222 -36.5% business
Slide 4: Operating Results
Operating Results % Year ended 30 June 2008 2008 2007 Increase/ Decrease ASK’s – capacity 23.3bn 21.6bn +7.9% Sector Length – average kms 1,115 1,157 -3.6% Aircraft – average in fleet 59.4 53.0 +12.1% RPK’s – demand 18.8bn 17.6bn +6.8% Guests carried 16.7m 15.3m +9.2% Revenue Load factor 80.5% 81.2%
Slide 5: Investment in New Initiatives
Investment in New Initiatives Exceptional Items Investment in New Initiatives VAustralia Embraer fleet - 3xEMB 170, 6xEMB 190 Pacific Blue Domestic Launch Premium Economy Lounge expansion Total cost in FY08 $42.8m, compared to prior year $6.5m (pre tax cost $61.1m and $9.6m respectively)
Slide 6: Virgin Blue – Domestic Market
Virgin Blue – Domestic Market Market share maintained at around 31% Fleet re-deployment (6x Boeing 737) effective 1H09 Capacity growth forecast – domestic market FY09 – 8.1% FY10 – 4.4% ‘Go Fares’ - launch 18 August, in conjunction with baggage charges $50 million cost savings on track for FY09
Slide 7: Pacific Blue
Pacific Blue Domestic Operations Performance in line with budget Break even within 12 month of operations Yield improvement of 20 % since launch International Operations Expansion into new markets and higher frequency Pacific Islands and Trans Tasman up well Four 737’s about to be deployed into new
Slide 8: V Australia
V Australia Status On track for 15 December launch Key milestones ahead Distribution Aircraft financing AOC, expected early December Key challenges Remain with seat and galley production
Slide 9: Fleet Update
Fleet Update At 30 June 2007 2008 2009 Future* Deliveries 737- 700 NG 22 22 21 - 737- 800 NG 31 37 38 19 EMB-170 LR - 4 6 - EMB-190 LR - 5 13 5 777-300ER - - 4 3 53 68 82 Virgin Blue 49 62 67 Pacific Blue 4 6 11 V Australia 4 53 68 82 * 2009-2013
Slide 10: Capital Management
Capital Management No Final dividend Capital expenditure for FY08 is $1bn, including pre- delivery payments for aircraft. Forecast for FY09 $275 million, principally aircraft and related assets Gearing, including operating leased aircraft, was 66%, against 58% for 2007 Average days cash operating co
Slide 11: Risk Management - Hedging
Risk Management - Hedging Currency Hedging – FY09 Operating costs 63% covered using swaps and options at circa 0.89 worst case Fuel Hedging – FY09 Circa 72% fuel requirements covered using principally options, with crude oil price capped at US$112 bbl Further cover taken in FY10 against crude price,
Slide 12: Outlook
Outlook Current market Most challenging environment to date Product positioning to ensure VB remains relevant to target markets, both corporate/government and core leisure Capacity growth reduced significantly, in line with expected demand averaged over next two years Focus on ancillary and value ad
Slide 13: Thank you
y >) Thank you