Kenya Airways Plc · NSEKE:KQ
Kenya Airways — FY2010/11 Earnings Presentation
40 slides from Kenya Airways's earnings presentation, Jul 9, 2011
Slide 1: Business and Financial Review – 2010/11
Business and Financial Review – 2010/11
Slide 2: Agenda
Agenda Global Economy Airline Industry Overview KQ Business & Financial Review – Past 10 Years – Year 2010/11 Next Year Q&A Chairman’s Remarks
Slide 3: Global Economy
Global Economy Strong Global Economic growth in 2010. Economic growth remains strong in 2011, World GDP forecast to rise by 3.1% Strong Business Confidence On the downside 2011 dented by:- Upward pressure on Energy prices Political turmoil in M-East and N. Africa Earthquake and Tsunami in Japan Sour
Slide 4: Airline Industry
Airline Industry Airlines globally expected to make US$ 16bn profit in 2010 High fuel prices will squeeze profits in 2011 Outlook for 2011 – Profit will slip down by half to US$ 8.6bn Capacity expected to grow by 6% in 2011 - Load factors and yields under pressure to mitigate high fuel prices in 201
Slide 5: Global Commercial Airline Profitability
Global Commercial Airline Profitability
Slide 6: Premium Travel Growth & Business Confidence
Premium Travel Growth & Business Confidence
Slide 7: Industry Statistics Jan-Dec (2010 vs 2009)
Industry Statistics Jan- Jan-Dec (2010 vs 2009) RPK% ASK% PLF % FTK% ATK% Growth Growth Growth Growth Africa 12.9 9.6 69.1 23.8 12.1 Asia/Pacific 9.0 3.6 77.6 24.0 14.3 Europe 5.1 2.6 79.4 10.8 0.5 Latin America 8.2 2.9 76.7 29.1 12.6 Middle East 17.8 13.2 76.0 26.7 15.7 North America 7.4 3.9 82.2 2
Slide 8: Business & Financial Review: The Past Years
Business & Financial Review The Past 10 Years
Slide 9: 10 Year Pax & C/F% Trend
10 Year Pax & C/F% Trend 100.0% 3,500 3,137 90.0% 2,890 3,000 2,762 2,824 2,601 80.0% 75.4% 2,386 2,500 73.6% 69.5% 70.2% 2,041 70.4% 70.8% 68.0% 69.2% 70.0% 74.2% 66.5% 2,000 1,701 1,621 1,540 60.0% 1,500 50.0% 1,000 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
Slide 10: 10 Year Cargo Volume & Rate Trend
10 Year Cargo Volume & Rate Trend 1.60 1.54 70,000 1.49 60,000 1.40 1.31 1.31 1.27 1.28 50,000 1.20 1.14 1.09 1.05 40,000 1.03 60,932 62,596 1.00 55,093 55,606 55,201 56,401 30,000 44,405 0.80 32,147 28,497 20,000 23,574 0.60 10,000 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 200
Slide 11: Business & Financial Review: Year 2010/11
Business & Financial Review Year 2010/11
Slide 12: Fleet in Service
Fleet in Service 2011 2010 Wide Body Boeing 767 - 300 6 7 Boeing 777 - 200 4 4 Narrow Body Boeing 737 - 300 6 4 Boeing 737 - 700 4 4 Boeing 737 - 800 5 5 Embraer 170 5 3 Embraer 190 1 - Total Fleet 31 27 Total Seats 4,925 4,669
Slide 13: Network
Network Routes launched in the year Muscat, Oman Juba, Sudan Luanda, Angola Rome, Italy Nampula, Mozambique Malindi, Kenya
Slide 14: Pride Centre 2
Pride Centre 2 Hon. Amos Kimunya - Minister of Transport officially opens Pride Center 2
Slide 15: Simulator
Simulator Hon. Amos Kimunya - Minister of Transport gives a Thumbs up to the new simulator as he officially opens Pride Center 2
Slide 16: People Development Programmes
People Development Programmes Course Name Target Group Number of Staff Attended World Class Operations All staff 2,639 Training (All modules) Personal Effectiveness & All new staff 647 Personal Finance Learning to Lead Team Leaders and Supervisors 159 Business Leadership Lead other leaders 16 Stress
Slide 17: Total Employees and Pilots Headcount
Total Employees and Pilots Headcount 400 377 5,000 338 337 4,500 350 316 4,000 300 279 3,500 240 250 3,000 211 200 177 183 183 2,500 4,154 4,267 4,179 4,133 4,355 150 2,000 3,427 3,418 3,599 2,977 3,222 1,500 100 1,000 50 500 - - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 18: Information Systems
Information Systems kenya) Airways «- Dricle of V\fricer
Slide 19: Systems Implemented
Systems Implemented • Integrated Operations Control Centre System (Sabre IOCC) – Modules implemented • Crew Scheduling • Operations Control • Ground Staff rostering and management • Pricing (Fares management & Contract Composer) • Flight Explorer • Maintenance Planner • Maintenance Control
Slide 20: Systems Implemented
Systems Implemented • PROS (Pricing and Revenue Optimisation Software) • E-Freight • Online Annual Report • MPESA and ZAP Payment for air tickets
Slide 21: Systems under Development
Systems under Development – Modules in development • Flight Recovery Manager • Flight Planning System • Crew Vacation Management • Airport Gate Management
Slide 22: Corporate Social Responsibility
Corporate Social Responsibility Broken down into 4 major categories Education Water Environment Health
Slide 23: Education
Education Kshs 8.4m Kenya Airways, has partnered with the Zambian Ministry of Education to promote the “Education for All Campaign”. The partnership will see Zambian pupils fly to Nairobi from Lusaka for an education exchange programme.
Slide 24: Environment
Environment Kshs 28m The “Plant-a-Future” initiative was launched in April 2007, and has so far seen over 500,000 indigenous trees planted in the Ngong Hills Forest. This year, a further 250,000 trees have been planted bringing the total to 750,000 trees.
Slide 25: Carbon Emission
Carbon Emission KQ has announced the launch of a new voluntary Carbon offsetting tool aimed at providing a channel for its customers to contribute towards reducing the effect of carbon emissions by supporting environmental sustainability initiatives.
Slide 26: 2010/11 Financial Results
2010/11 Financial Results Alex Mbugua Group Finance Director
Slide 27: Operating Statistics
Operating Statistics 2011 2010 Var Var % ASK's (mil) 12,854 12,143 711 5.9 RPK's (mil) 8,896 8,071 825 10.2 Cabin Factor % 69.2% 66.5% 2.7% B/Even C/F% 63.6% 62.0% 1.6% Passengers ('000s) 3,137 2,890 247 8.5 Yield per RPK incl YR(USc) 9.79 9.13 0.7 7.2 Yield per RPK incl YR( KShs) 7.80 7.00 0.8 11.5
Slide 28: Consolidated Income Statement
Consolidated Income Statement KShs Mil. 2011 2010 Var. Var. % Turnover 85,836 70,743 15,093 21.3 Direct operating costs (53,419) (44,376) (9,043) (20.4) Fleet ownership costs (9,622) (9,102) (520) (5.7) Gross profit 22,794 17,265 5,529 32.0 Overheads (16,980) (15,426) (1,554) (10.1) Operating profit
Slide 29: Group Turnover
Group Turnover KShs mil 2011 2010 Var Var % Pax Turnover 75,355 62,838 12,517 19.9% Cargo 6,522 5,434 1,088 20.0% Handling 1,492 1,312 180 13.8% Others 2,467 1,159 1,308 112.9% Group Turnover 85,836 70,743 15,093 21.3%
Slide 30: Direct Operating Costs
Direct Operating Costs 2011 2010 Var % Var Aircraft Fuel 24,778 18,819 (5,959) (31.7) Landing, Handling & Navigation 8,486 8,530 44 0.5 Aircraft Maintenance 6,835 5,028 (1,807) (35.9) Catering 4,683 4,445 (238) (5.4) Commission on Sales 2,785 3,246 461 14.2 Aircraft, Pax & Cargo Ins 487 366 (121) (3
Slide 31: Fleet Ownership Costs
Fleet Ownership Costs 2011 2010 Var Var % Hire of aircraft and engines 5,902 5,920 18 0.3% Depn on aircraft & engines 3,622 3,094 (528) (17.1%) Depn on rotables 272 262 (10) (3.6%) Aircraft Purchase Subsidy (174) (174) 0 0.0% Total Fleet Ownership Costs 9,622 9,102 (520) (5.7%)
Slide 32: Statement of Financial Position
Statement of Financial Position KShs Mil ASSETS Mar-11 Mar-10 Var Var% Aircraft 44,096 44,864 (768) (1.7%) Properties, Plant & Equip 6,698 6,625 73 1.1% Intangible Assets 1,029 899 130 14.5% Prepaid Lease Rentals 5 6 (1) (12.3%) Aircraft deposits 2,797 2,351 446 19.0% Investments in Ass co & others
Slide 33: Statement of Financial Position
Statement of Financial Position KShs Mil EQUITY AND LIABILITIES Mar-11 Mar-10 Var Var % to Capital 2,308 2,308 - 0.0% Revenue Reserve 20,714 17,641 3,073 17.4% Hedge Reserve 68 (26) 94 361.5% Minority interests 53 50 3 6.0% 23,143 19,973 3,170 15.9% Aircraft Loans 25,449 26,920 (1,471) (5.5%) Deferr
Slide 34: Statement of Cash Flows
Statement of Cash Flows KShs Mil Mar-11 Mar-10 Var Var% Profit before tax 5,002 2,671 2,331 87.3% Non operational items 6,875 (676) 7,551 (1,116.9%) Movt in working capital (1,341) 5,806 (7,147) (123.1%) Operating activities 10,535 7,801 2,734 35.0% Income taxes paid (116) (209) 93 (44.5%) Net Cash
Slide 35: Benchmark on 2010/11 Results
Benchmark on 2010/11 Results EK LH KLM/AF KQ Turnover (USD mil) 14,806 35,497 30,678 1,077 Operating Profit 1,481 1,138 526 73 Op Margin% 10.0% 3.2% 1.7% 6.8% Net Profit 1,463 1,469 796 44 Net margin% 9.9% 4.1% 2.6% 4.1%
Slide 36: Dividend
Dividend Proposed dividend at 1/50 per share = KShs 693m
Slide 37: Next Year
Next Year
Slide 38: Network
Network Upcoming Routes Abuja, Nigeria N’djamena, Chad Kilimanjaro, Tanzania Ouagadougou, Burkina Faso Port Louis, Mauritius Jeddah, Saudi Arabia Asmara, Eritrea Beirut, Lebanon New Frequencies Double daily to Juba up from daily Zanzibar from 3 times weekly to 10 times weekly 2 additional flights to
Slide 39: Major Initiatives
Major Initiatives Target Date Communication ,Efficiency & Growth on going 10 Year Plan Dec 11 B787 Entry Preparations on going EASA Certification Mar 12 Integrated Ops & Maint. Control Syst. (IOCS &MCS) on going Carbon Emission Trading Scheme on going ACARS (Automatic communication Alert & Recording
Slide 40: Q&A
Q&A &® Kenya Airways ) Che JO uile of African