Capital A Berhad · MYX:CAPITALA
Capital A Berhad — AirAsia Berhad — FY2012 Earnings Presentation
26 slides from Capital A Berhad's earnings presentation, 2013
Slide 1: Fourth Quarter & Full Year 2012 Analyst Presentation
AirAsia Berhad & Asia Aviation PCL Fourth Quarter & Full Year 2012 Analyst Presentation
Slide 2: Disclaimer
Disclaimer Information contained in our presentation is intended solely for your reference. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the Company. Neither we nor our advisors make any representation
Slide 3: 4Q12 Key Financial Highlights
4Q12 Key Financial Highlights
Slide 4: 4Q12 Results - Key Highlights
4Ql2 Results - Key Highlights Revenue =" Malaysia - RM 1.41 billion up 10% y-o-y " Thailand - THB 5.62 billion up 29% y-o-y " Indonesia - IDR 1,261.88 billion up 31% y-o-y Q = Operating profit =" Malaysia - RM 430.64 million down 9% y-o-y =" Thailand* - THB 969.4 million up 57% y-o-y " Indonesia - I
Slide 5: Results - Key Highlights
20 12 Results - Key Highlights Revenue = Malaysia = Thailand = Indonesia - RM 5.00 billion up 1% y-o-y - THB 19.35 billion up 20% y-o-y - IDR 4.36 billion up 18% y-o-y Q == Operating profit = Malaysia = Thailand* = Indonesia Q Net Profit = Malaysia = Thailand = Indonesia - RM 1.158 billion unchanged
Slide 6: 4Q12 & 2012 Summary
4Q12 & 2012 Summary
Slide 7: 4Q12 & 2012 - Financial Results - Malaysia
4Q12 & 2012 - Financial Results - Malaysia 4Q12 High load factor of 82% due to seasonally strong quarter Passenger growth of 7% YoY matched capacity growth 2012 Full Year Load factor of 80% Strong passenger demand growth of 9% YoY despite average fare up 6% RASK up 1% due to increase in average fare
Slide 8: 4Q12 & 2012 - Financial Results - Thailand
4Q12 & 2012 - Financial Results - Thailand 4Q12 Load factor of 82% up 4ppt YoY due to peak season 2012 Full Year Load factor of 82% up 2ppt YoY Passenger carried up 25% YoY exceeding capacity growth Passenger carried up 21% YoY exceeding capacity growth RASK up 12% YoY due to increase average fare R
Slide 9: 4Q12 & 2012 - Financial Results - Indonesia
4Q12 & 2012 - Financial Results - Indonesia 4Ql12 * Load factor of 76% down 2ppt YoY due to capacity management 2012 Full Year Load factor of 77% unchanged YoY * Passenger carried up 29% YoY Passenger carried up 17% YoY * RASK up 14% YoY due to increase average fare and ancillary income RASK up 11%
Slide 10: Looking Ahead: Strategy and Issues
Looking Ahead: Strategy and Issues
Slide 11: Strategy: Maintain Cost Leadership
1. Strategy Maintain Cost Leadership Further improvement of cost reduction to provide low fares: QO) Aircraft Savings First airline to take A320 with sharklets. One to MAA and one to TAA so far Fuel Savings of approximately 3% and all remaining deliveries this year are sharklets, Expected fuel savin
Slide 12: Continue to be Asia's most identifiable brand - Malaysia
Strategy 2. Continue to be Asia’s most identifiable brand with highest safety excellence MALAYSIA * Cash balance of RM2.3 billion = Strength to compete with all competitors =» Approving special dividends of 18 sen per share to reward long term shareholders =" Approved proposed ordinary dividend of 6
Slide 13: Continue to be Asia's most identifiable brand - Thailand
Strategy 2. Continue to be Asia’s most identifiable brand with highest safety excellence THAILAND Adding 7 aircraft in 2013 ” To maximise capacity in Don Mueang - “Goldmine Reduce further airport tax charges On time performance of 90% since the move To dominate domestic market, Indochina and China T
Slide 14: Continue to be Asia's most identifiable brand - Indonesia
Strategy 2. Continue to be Asia’s most identifiable brand with highest safety excellence INDONESIA Adding 8 aircraft in 2013 = New and focused management in place =» Re-focus on domestic market and growing organically = Strengthen distribution channels and capture a larger demography = Over 3500 dis
Slide 15: Continue to be Asia's most identifiable brand - Philippines and Japan
Strategy 2. Continue to be Asia’s most identifiable brand with highest safety excellence PHILIPPINES " To focus on China markets and regional connectivity * Continue developing Clark and ride on the Special Economic Zone status or tax free JAPAN * Adding 4 aircraft in 2013 » Announce Nagoya as its s
Slide 16: Defending our position with strong balance sheet
Strategy 5. Defending our position with strong balance sheet MAA * Net gearing of 1.17times * Net Cash * Cash position of RM2.2 billion * Cash position of Baht 6.2 billion * Free Cash flow of RM765.8 mil * Free cash flow of Baht 4,450 million Note : Free Cash flow : (Cash operating activities - Cape
Slide 17: Dividend payout
Strategy 5. Defending our position with strong balance sheet Dividend payout * Special dividend of 18 sen per share declared and approved to return excess cash to loyal shareholders = 6 sen per share final dividend proposed in conjunction with a formal dividend policy to be applied in future years =
Slide 18: Defending our position with a dynamic revenue management strategy
Strategy 4 Defending our position with a dynamic revenue management strategy * Demand still strong despite increase in yields * Ability to push load factor despite competition * Passenger carried & load factor increased despite fares growth " Higher ratio of unique routes contributes higher margins
Slide 19: Defending our position with a profitable Ancillary Income model
Strategy 5. Defending our position with a profitable Ancillary Income model High margins business =" Medium term target of 23-25% of revenue = To target RM50 per pax in 1-2 years " Baggage revenues and Assigned seating/Hot seats seen double growth = New introduction of Red carpet service - Good take
Slide 20: Ancillary Income model - Proposed New Initiatives
Strategy 5. Defending our position with a profitable Ancillary Income model - Proposed New Initiatives (con’t) =" Duty Free business o To operate duty free service and have full control of products and concepts o Allow AirAsia to dictate prices and capture higher revenues and margins o Create new di
Slide 21: Defending our position with our unique adjacency business
Strategy 5. Defending our position with our unique adjacency business AirAsia Expedia Profit of RM3.1 million in 4Q12 equity accounted Profit reinvested for expansion phase Online transactions showed growth for hotels (+64%) and flights (+123%) Management change - Former regional head of commercial
Slide 22: New Markets: India
Strategy 6. New Markets a) India Applied for approval to Indian foreign investment promotion board to invest in 49% into a proposed joint venture Strong and reputable partners in India being Tata Group and Bhatia family To focus on South India being Chennai and ride on existing network from MAA and
Slide 23: New Markets: India (con't)
6. New Markets a) India (con’t) = Positive response from India media and market to typify the strength of the Tata and AirAsia brand == Times 7M eee AirAsiatakesTatasbacktoskies =... oa : Anticon sVirnditne Sen ‘Terrrroment Tomy os Seer ale of connactty create See =
Slide 24: Issues: High Speed Train impact
Strategy 7. Issues a) High Speed Train impact =" Targeted start is in 2020 =" Cost of investment for the project is RM3O billion hence the breakeven could potentially be very high = Fares still high for trains due to exclusivity of the product. See below:- Assume London - Business Class Economy flex
Slide 25: Undervalued
Strategy 8.Undervalued Hidden Values in AirAsia Balance sheet = Net Book Value of aircraft conservative compared to market value = Balance sheet investment in Thai AirAsia is held at discount to IPO price of Baht 3.70 compared to current share price = Current share of AAV is 6.70 = No balance sheet
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