Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — FY2012 Earnings Presentation
65 slides from Japan Airlines's earnings presentation, Apr 30, 2013
Slide 1: Mar/2013 (FY2012) Results
Mar/2013 (FY2012) Results Yoshiharu Ueki, President 30 April, 2013
Slide 2: Topics
Topics Overview of Mar/2013 (FY2012) Results and P.1 1 Dividend Policy Overview of Medium Term Management Plan P.5 2 2012-2016 Rolling Plan 2013 3 Details of Mar/2013 (FY2012) Result P.15 4 Earnings Forecast for Mar/2014 (FY2013) P.27 Supplemental References P.33 1
Slide 3: Overview of Full-Year Mar/2013 (FY2012) Results
Overview of Full-Year Mar/2013 (FY2012) Results Operating Profit for Mar/2013 (FY2012) is 195.2Bn JPY (y/y ▲4.7%) Equity ratio reached 46.4% (y/y +10.7pt) Operating Revenue Operating Profit （JPY Bn） （JPY Bn) Operating Profit Margin 204.9 1,238.8 200 195.2 20% 1,204.8 180 17.0% 15% 1,200 15.8% 16
Slide 4: Operating revenue and profit commentary
We achieved the aggregate operating revenue of 1,238.8 billion yen and the operating profit of 195.2 billion yen. The operating profit margin declined by 1.2% year-on-year to 15.8%, but we were able to keep it at a high level. We are accumulating capital steadily. Our equity ratio was 46.4% at
Slide 5: Dividend Policy
Dividend Policy Board declares cash dividend of 190.00 JPY per share for Mar/2013, increased by 10 JPY from our previous forecast. We will keep the dividend payout ratio of 20% of our Net Income for FY2013. Previously announced dividend per share 180.00 JPY 190.00 JPY per share Per share Increas
Slide 6: Dividend policy commentary
Passing on benefits to our shareholders is one of our greatest goals of the management. We aim to achieve stable revenues and pay dividends to our shareholders. At the announcement of our financial results for the 3rd quarter of FY2012, we explained that the dividend payout ratio would be about
Slide 7: Operations of Boeing 787
Operations of Boeing 787 New Launch Date Grounded all Boeing 787s Route Flight # Aircraft Date of Launch Weekly Flights from 16 Jan (total 7 aircraft) Narita=Helsinki JL413/414 787-8 01 Jul, 2013 7 Operations of Boeing 787 will Other 787 Operating Routes be resumed from June 1, 2013. Current Wee
Slide 8: 787 suspension and resumption commentary
As you may know, we suspended operations of our 787 fleet on January 16 due to battery failures, and we sincerely apologize to our customers and persons affected for the inconvenience. The Japanese Civil Aviation Bureau has issued TCD, which allows 787s to resume operations after the modificatio
Slide 9: Topics
Topics Overview of Mar/2013 (FY2012) Results and P.1 1 Dividend Policy Overview of Medium Term Management Plan P.5 2 2012-2016 Rolling Plan 2013 3 Details of Mar/2013 (FY2012) Result P.15 4 Earnings Forecast for Mar/2014 (FY2013) P.27 Supplemental References P.33 5
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TT oT JAPAN AIRLINES Intentionally Left Blank
Slide 11: Medium Term Management Plan – Overview of Rolling Plan 2013
Medium Term Management Plan – Overview of Rolling Plan 2013 Surviving Future Competition ●Enhancement of JAL Brand ●Route Network, Products and Services ●Cost Competitiveness We will maintain safety and provide We will build a highly convenient route We will continuously strive to customers with unp
Slide 12: Rolling Plan 2013 rationale
The JAL Group needs to seriously reflect on its past. While making well-thought-out plans, we managed the company without sufficiently reviewing the progress or achievement level of those plans, or analyzing or reviewing the results. Therefore, with regard to the JAL Group Medium Term Management
Slide 13: Medium Term Management Plan – Enhancement of JAL Brand
Medium Term Management Plan – Enhancement of JAL Brand International – High Quality and Full-Service Domestic – Convenience and Simplicity Completed to install Introduced new seats in all classes - First Class on all 777-200s (JAL SKY SUITE 777) - Class J on all 737-800s First Class New York ser
Slide 14: JAL brand commentary
On international routes, we launched JAL SKY SUITE 777 which offered greater comfort and high quality amenities in every class under the theme of “the highest quality, a class above”. These flights started on London route and will be progressively expanded to other US and Europe routes. We are a
Slide 15: Medium Term Management Plan – Route Network
Medium Term Management Plan – Route Network International Domestic Launched Narita=Boston and Narita=San Diego Launched (resumed): Fukuoka=Hanamaki, Niigata=Sapporo Osaka/Itami=Matsuyama, Hakodate, Misawa Launched: Haneda=Nagoya/Chubu Increased frequency: Osaka/Itami routes Increased frequ
Slide 16: Route network commentary
On international routes, we launched nonstop services from Narita to Boston and Narita to San Diego utilizing our 787 fleet. Both routes marked a good performance. The launch of Helsinki route was postponed due to the grounding of 787s, but is expected to be launched on July 1st, 2013. As for
Slide 17: Medium Term Management Plan – Route and Network
Medium Term Management Plan – Route and Network Alliance Strategy Launched Joint Business with British Airways Marked good performance in Joint Business with American Airlines Collaborate with our partners to maximize business partnerships for the sake of greater convenience and efficiency, ex
Slide 18: Joint business commentary
Our joint businesses with American Airlines over transpacific routes and with British Airways on European routes are going smoothly and steadily. Looking forward, we would like to further enhance our joint businesses hand in hand with our partners, as well as expand the range of business and see
Slide 19: Medium Term Management Plan – Cost Competitiveness
Medium Term Management Plan – Cost Competitiveness Unit Cost (JPY) FY2012 FY2013 FY2016 Total Cost (Before Expansion) 11.5 11.3 11.0 Original Medium Term Total Cost (After Expansion) - 11.4 11.1 Management Plan Excluding Fuel Cost - 8.3 8.0 Result / Plan / Total Cost (After Expansion) (*1) 11.5 12.0
Slide 20: Cost competitiveness commentary
Up till now, our cost indicator was derived from consolidated operating expenses and unit cost based on ASK of the group’s 6 operators respectively. However, as the cost structure of the air transport business encompasses the businesses of many Group companies, from fiscal year 2013, we will exp
Slide 21: Medium Term Management Plan – Cost Competitiveness
Medium Term Management Plan – Cost Competitiveness Divisional Profitability Management System Productivity per Person ASK / Number of Staff Introducing group companies (Thousand Seat km / Staff) <Result> Introduced 9 companies in FY2012 (Planned: 8 companies) 2,700 <Plan> Adding 9 new companies in
Slide 22: Divisional profitability management commentary
After launching of the divisional profitability management system in FY2011, which empowers business units to manage their individual businesses, we introduced the system to 9 companies, bringing the total number of companies with this system to 11. As for headcount, we achieved 63% in FY2012. I
Slide 23: Medium Term Management Plan – Productivity Improvement
Medium Term Management Plan – Productivity Improvement Review for the Productivity Improvement and Future Action Streamline back office Improve utilization of flight and cabin crew Efficient staff allocation measures at airport and maintenance divisions - Continue activities to improve product
Slide 24: Productivity improvement commentary
We have challenged to minimize the expenses from 3 points of view, one is “labor productivity improvement”, the other is “efficient use of resources” and “actions to environmental changes”. As for “labor productivity improvement”, we will continue to improve productivity in every division to ach
Slide 25: Mid-Term Management Plan – Aircraft investment
Mid-Term Management Plan – Aircraft investment Investment Amount in Aircraft Change of # of aircraft (JPY Bn) # of aircraft 140 250 Large Original Plan 216 220 218 222 222 120 Result and New Plan 200 100 Medium 150 80 100 Small 60 40 50 RJ 20 0 2012 2013 2014 2015 2016 0 * End of Fiscal Year 2012 20
Slide 26: Aircraft investment commentary
We have invested 103 billion yen in aircraft. Additional measures such as the purchase of our leased aircraft increased the amount of the capital expenditures in FY2012. We have changed the assumptions of FX rate from 85 yen to 95 yen per dollar. This may essentially increase the amount of capit
Slide 27: Mar/2013 (FY2012) Results
Mar/2013 (FY2012) Results [Details] Norikazu Saito, Executive Director
Slide 28: Topics
Topics Overview of Mar/2013 (FY2012) Results and 1 2013年3月期業績サマリー 及び 株主還元 P.1 Dividend Policy Overview of Mid-Term Management Plan P.5 2 2012-2016 - Rolling Plan 2013 3 Details of Mar/2013 (FY2012) Result P.15 4 Earnings Forecast for Mar/2014 (FY2013) P.27 Supplemental References P.33 15
Slide 29: Overview of Consolidated Financial Results
Overview of Consolidated Financial Results Revenue of JPY 1,238.8 Bn JPY and Operating Profit of JPY 195.2 Bn JPY Operating Profit Margin of 15.8% 4Q (Jan-Mar) (JPY Bn) Mar/2012 Mar/2013 % y/y % y/y Mar/2013(4) Revenue 1,204.8 1,238.8 +2.8% 296.7 +0.4% Air Transportation Segment 1,081.1 1,106.1
Slide 30: Consolidated results commentary
Operating revenues increased by 2.8% from the previous year to 1,238.8 billion yen, mainly because of an increase in passengers on both our domestic and international routes. Operating expenses increased by 4.4% from the previous year to 1,043.5 billion yen, due to product and service improvemen
Slide 31: Changes of Operating Profit
Changes of Operating Profit Mar/2013 (FY2012) ASK y/y: +3.3% RPK y/y: +8.5% Progress of cost improvement (JPY Bn) (JPY Bn) Minimized costs by expanding the Other Divisional Profitability Management Domestic Int’l Revenue Fuel System Passenger Cargo Operation Minimized costs by improving +4.2% ▲5.8%
Slide 32: Operating profit change commentary
Owing to an increase in revenue due to a greater number of passengers, aggregate revenue increased by 34.0 billion yen. As for expenses, fuel costs increased due to unfavorable fuel prices and currency markets, and an increase in supply. In addition, we saw increases in costs to improve products
Slide 33: International Passenger Operations (Operating Results)
International Passenger Operations (Operating Results) 4Q (Jan-Mar) International Passenger Mar/2012 Mar/2013 % y/y % y/y Mar/2013 Passenger Revenue (JPY Bn) 385.2 406.6 +5.5% 98.3 +2.1% ASK (MN seat km) 43,036 44,745 +4.0% 11,357 +3.5% RPK (MN passenger km) 30,313 34,036 +12.3% 8,605 +4.4% Passenge
Slide 34: International passenger commentary
On international routes, while ASK increased by 4.0%, RPK grew by 12.3% year-on-year. Thus, our load factors increased by 5.6 points year-on-year to 76.1%, showing a steady increase in demand. On the other hand, though demand increased, there was a large increase in leisure demand and inbound pa
Slide 35: International Passenger Operations (Changes of Revenue)
International Passenger Operations (Changes of Revenue) As the aggregate number of passengers increased, passenger revenue rose by JPY 21.3Bn y/y at Mar/2013. Mar/2013 (FY2012) +JPY21.3Bn Strong Demand on mid-long (+5.5%) haul routes; Europe, North 406.6 America, Southeast Asia <L/F> This Year (
Slide 36: International revenue commentary
Strong demand on mid-long haul routes such as Europe, North America and Southeast Asia continued into the fourth quarter. The revenue per passenger declined as the share of the leisure passenger increased, due to a recovery from Japan and inbound demand from overseas. JAL SKY SUITE 777 has con
Slide 37: Domestic Passenger Operations (Operating Results)
Domestic Passenger Operations (Operating Results) 4Q (Jan-Mar) Domestic Passenger Mar/2012 Mar/2013 % y/y % y/y Mar/2013 Passenger Revenue (JPY Bn) 481.1 485.2 +0.9% 111.7 ▲1.8% ASK (MN seat km) 35,523 36,443 +2.6% 8,756 ▲3.2% RPK (MN passenger km) 22,264 23,012 +3.4% 5,433 ▲1.5% Passengers (’000) 2
Slide 38: Domestic passenger commentary
On domestic routes, while ASK increased by 2.6%, RPK increased 3.4% year-on-year. This rose our load factor by 0.5 points to 63.1%, also showing a steady increase in demand. As with international passenger operations, domestic passenger operations also had a change in passenger mix due to a surg
Slide 39: Domestic Passenger Operations (Changes of Revenue)
Domestic Passenger Operations (Changes of Revenue) Revenue increased by JPY 4.1 Bn Mar/2013 (FY2012) Increased flights offering First Class service +JPY4.1Bn (+0.9%) Expanded First Class Service 485.2 to Haneda = Okinawa Increased Class J seats 481.1 Resumed: +16.5 Fukuoka = Hanamaki, ▲12.
Slide 40: Domestic revenue commentary
We have increased the number of flight with the First Class and Class-J services in FY2012. Also, we have resumed routes such as Fukuoka and Hanamaki and increased frequency such as Haneda and Izumo. We have introduced Sakitoku and Super Sakitoku discount fares during New Year holidays, and th
Slide 41: Major Operating Expense Items
Major Operating Expense Items Breakdown of Operating Expenses 4Q (Jan-Mar) （JPY Bn） Mar/2012 Mar/2013 % y/y % y/y Mar/2013(1) Fuel 232.9 246.3 +5.8% 60.7 +0.5% Landing fees and other rent 71.6 75.1 +4.8% 18.5 +1.7% Maintenance 23.5 30.4 +29.3% 6.7 +29.9% Sales Commissions (Air Transport) 22.3 20.3 ▲
Slide 42: Operating expense commentary
Fuel costs were pushed up by 5.8% due to the unfavorable fuel prices and exchange rate of JPY, and also increase in our supply. At the same time, an increase in supply pushed up navigational facility fees by 4.8%. Furthermore, regular maintenance works increased, and consequently maintenance cos
Slide 43: Major Balance Sheet Items
Major Balance Sheet Items The balance of interest-bearing debt is JPY 160.1Bn after repayment Shareholders' equity ratio increased by 10.7pt to 46.4%. End of FY2011 End of FY2012 (JPY Bn) Difference 2012/3/31 2013/3/31 Total Assets 1,087.6 1,216.6 +128.9 Cash and Deposits 272.4 347.9 +75.5 Balan
Slide 44: Balance sheet commentary
Repayment of long term loans and lease obligations progressed compared to the previous year, and the balance of interest bearing debts totaled 160.1 billion yen. Our equity ratio reached 46.4%, improved by 10.7 points, and we are closing in on the target of 50% in our Medium Term Management Plan
Slide 45: Major Cash Flow Items
Major Cash Flow Items End of FY2011 End of FY2012 (JPY Bn) Difference 2012/3/31 2013/3/31 Net income before income taxes and 199.9 190.4 ▲9.4 minority interests Depreciation 81.2 81.0 ▲ 0.2 Other ▲24.4 ▲6.6 17.8 Cash Flow from Operating Activities 256.6 264.8 8.1 Capital Expenditure (1) ▲98.6 ▲121.8
Slide 46: Cash flow commentary
Cash flow from operating activities was 264.8 billion yen. Cash flow for investing activities was 129.0 billion yen due to purchase of new and leased aircrafts, which resulted in free cash flow for the full year was 135.8 billion yen. Cash flow for financing activities was 60.6 billion yen, br
Slide 47: Supplemental Reference: Revenue of International Routes by Geographic segment
《Supplemental Reference》 Revenue of International Routes by Geographic segment Passenger Revenue (% of the whole int’l revenue) Passengers 4Q (‘000) FY2011 FY2012 y/y 4Q FY2012 y/y (%) FY2011 FY2012 y/y y/y FY2012 Trans Pacific 32.0% 34.0% +2.0pt 33.0% +1.5pt Trans Pacific 1,555 1,692 +8.8% 420 +2.4
Slide 48: Supplemental Reference: Number of Aircraft in Service
《Supplemental Reference》 Number of Aircraft in Service Number of Aircraft (Consolidated) End of Mar/2012 End of Mar/2013 2012/3/31 2013/3/31 Changes Owned Leased Total Owned Leased Total Boeing 777-200 15 0 15 15 0 15 -- Boeing 777-200ER 11 0 11 11 0 11 -- Boeing 777-300 7 0 7 7 0 7 -- Boeing 777-30
Slide 49: Topics
Topics Overview of Mar/2013 (FY2012) Results and P.1 1 Dividend Policy Overview of Mid-Term Management Plan P.5 2 2012-2016 - Rolling Plan 2013 3 Details of Mar/2013 (FY2012) Result P.15 4 Earnings Forecast for Mar/2014 (FY2013) P.27 Supplemental References P.33 27
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Slide 51: Earnings Forecast for Mar/2014 (FY2013, Consolidated)
Click toForecast Earnings edit Master title style(FY2013,Consolidated) for Mar/2014 FY2012 Result FY2013 Forecast (JPY Bn) Difference (Mar/2013) (Mar/2014) Revenue 1,238.8 1,272.0 +33.1 Operating Expense 1,043.5 1,132.0 +88.4 Operating Profit 195.2 140.0 ▲55.2 Ordinary Income 185.8 127.0 ▲58.8 Net I
Slide 52: FY2013 forecast commentary
Operating revenue for FY2013 is expected to increase by 33.1 billion yen from the previous year to 1,272 billion yen. Operating profit and ordinary income are expected to decline by 55.2 billion yen and 58.8 billion yen from the previous year to 140.0 billion yen and 127.0 billion yen respective
Slide 53: Mar/2014 Operating Forecast (Air Transport Business)
Mar/2014 Operating Forecast (Air Transport Business) International Domestic Passenger Passenger (*y/y %) Mar/2014 Mar/2014 [Forecast] [Forecast] ASK(*) +3.9% +4.5% RPK (*) +4.5% +1.5% Revenue Passengers Carried(*) +3.3% +1.8% L/F (%) 76.6% 61.4% Unit revenue (1)(*) +0.9% ▲3.0% Yield (2)(*) +0.2% ▲0.
Slide 54: Operating forecast commentary
As for international passenger business, we will increase the supply such as the launch of Helsinki route to meet the increase of the total demand originated in both Japan and Overseas. We expect the decline of our yield due to the increase of the long-range flights, but we keep trying to increa
Slide 55: Increased/Decreased Factors of Operating Profit
Increased/Decreased Factors of Operating Profit Mar/2013 (FY2012) to Mar/2014 (FY2013) （JPY Bn) 230 Revenue+33.1Bn Expenses+88.4Bn +7.8 220 +6.7 ▲17.3 • Increase in sales of products ▲0.8 210 • FX assumption 95JPY/USD etc. +19.3 ▲11.1 200 195.2 • Landing Fees • Recruitment etc 190 • Fuel consumption
Slide 56: Operating profit factors commentary
As for revenue, we expect the operating profit to increase on international routes by 19.3 billion yen due to the launch of Helsinki route, etc. and on domestic routes, by 6.7 billion yen due to additional flights from Osaka/Itami and flexible utilization of the aircraft to match the demand. For
Slide 57: Impact of Fuel and Currency Markets
Impact of Fuel and Currency Markets Hedging Ratio for Fuel Costs (As of End of Mar/2013) 100% 80% 80% Fuel FX 60% 40% 40% 20% 10% 10% 5% 5% 0% FY2013 FY2014 FY2015 Result and Assumptions Sensitivity for Fuel Costs (Without Hedge) FY2012 Result FY2013 Plan Crude Oil 2.0 Bn Yen Singapore Kerosene (USD
Slide 58: Fuel and currency hedging commentary
We hedge part of our fuel costs. For Jet Fuel, the hedging rate by each fiscal year as of March 31, 2013 is around 40% in FY2013, around 10% in FY2014, and around 5% in FY2015. Also, for US dollars, the hedging rate is around 80% in FY2013, around 10% in FY2014, around 5% in FY2015. Our assu
Slide 59: Mar/2014 Earnings Forecast (Consolidated Balance Sheet / Cash Flow)
Mar/2014 Earnings Forecast (Consolidated Balance Sheet / Cash Flow) Consolidated Balance Sheet Mar/2013 Mar/2014 (JPY Bn) Difference Result Forecast Total Assets 1,216.6 1,273.0 +56.3 Interest-bearing Debt 160.1 129.0 ▲31.1 Shareholders' Equity 565.0 644.0 +78.9 Shareholders' Equity Ratio (%) 46.4%
Slide 60: Balance sheet and cash flow forecast commentary
By posting our consolidated net income forecast, we will expect shareholders’ equity of 644.0 billion yen, and the equity ratio to reach 50.6%. As for forecast of cash flow, based on the forecast of 140.0 billion yen in operating profit, we expect cash flow from operating activities and for inve
Slide 61: Topics
Overview of Mar/2013 (FY2012) Results and P.1 1 Dividend Policy Overview of Mid-Term Management Plan P.5 2 2012-2016 - Rolling Plan 2013 3 Details of Mar/2013 (FY2012) Result P.15 4 Earnings Forecast for Mar/2014 (FY2013) P.27 Supplemental References P.33 33
Slide 62: Registration of Foreigners, etc. in Our Shareholders' List
Registration of Foreigners, etc. in Our Shareholders’ List Shareholder Structure at the end of March 2013 Shareholding Ratio(1) Foreigners, etc. (approx. 37.34%) Refused registration in our shareholders’ list pursuant to our Articles of Incorporation Voting Right(1) Foreigners, etc. (approx. 31.32%)
Slide 63: Annual Shareholders Meeting: Payment of Dividend to Foreigners, etc.
Payment of Dividend to Foreigners, etc. Considering our key policy to return proactively profits to our shareholders, we have determined that we will proceed with the preparations for making appropriate adjustments to our Articles of Incorporation. We will submit the proposal for changing our Ar
Slide 64: Fly into tomorrow.
Fly into tomorrow. Contact: Finance, Japan Airlines +81-3-5460-3068
Slide 65: Forward-looking statements disclaimer
This contents contains descriptions of the future expectations, outlooks, objectives and plans etc. of Japan Airlines Co., Ltd. (hereafter "the company") and related Group companies (hereafter "the Group"). These are based on information available at the time when these materials were created by the