Air New Zealand Limited · NZX:AIR
Air New Zealand — FY2005 Earnings Presentation
25 slides from Air New Zealand's earnings presentation, Aug 29, 2005
Slide 1: Air New Zealand 2005 Annual Result — Analyst Briefing
We're Rea ARNE EALAND Air New Zealand 2005 Annual Result — Analyst Briefing
Slide 2: John Palmer, Chairman
Slide 3: Introduction, Full Year Results, Outlook, Questions
Introduction — John Palmer Full Year Results — Rob McDonald Outlook — John Palmer Questions AIR NEW ZEALAND
Slide 4: is x og i me a AIMS oe iii SIM
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Slide 5: Progress since 2002
Progress since 2002 La. = AIR NEW ZEALAND Profitability (pBut)/ Gearing > $200m 23 point improvement improvement Dividend Cash 5 cents > $470m fully imputed improvement
Slide 6: Result highlights
AIR NEW ZEALAND Underlying profit up 8% from June 04 PBUT 3% lower from June 04 Cash up $50m to $1.1 billion Gearing improved 5 pts to 51% from June 04
Slide 7: Final dividend of 2.5 cents per share
La. = AIR NEW ZEALAND Final dividend of 2.5 cents per share, fully imputed Full year dividend of 5 cents per share, fully imputed Record date 16th of September Payment date 29th of September
Slide 8: Core Network
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Slide 9: Rob McDonald, Chief Financial Officer
Slide 10: Full Year Results
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Slide 11: Financial results summary
Jun 05 Jun 04 Variance $m $m_ Fav / (Unfav) Total revenue 3,616 3,498 3% EBITDRA 697 699 - EBIT 212 235 (10%) PBUT 235 243 (3%) NPAT 180 166 8% Operating cash flow 437 467 (6%)
Slide 12: EBITDAR by segment
oO AIR NEW ZEALAND Variance June 05 June 04 Fav / (Unfav) $m $m $m Airline 638 610 28 Engineering 52 68 (16) Other (Airport + 24 (14) Services) Total 697 699 (2)
Slide 13: Revenue by region
Europe Revenue Load Factor Yield Flat Asia/Japan Revenue Load Factor Yield North America, Revenue By — Load Factor Tasman/Pacific :. Yield Islands ~~ g Revenue». ‘Domestic Revenue Load Factor Yield Load Factor aE Yield | . 5 Adjusted for currency impact
Slide 14: Costs as % of flight revenue
% of Flight Revenue June June Variance 05 04 Fav/ (Unfav) Labour 16% 16% - Fuel 20% 16% (4 pts) Maintenance 10% 12% 2pts Operations & Pax Svcs 21% 22% 1 pt Sales & Marketing 11% 12% 1 pt Other 7% 8% 1 pt
Slide 15: Jet Fuel Price (per barrel)
Jet Fuel Price (per barrel) $80 $30 Zz 2003 2004 2005 Q1 06 Q4 06 Fuel hedge gains: 2003 2004 2005 $18m $33m $103m
Slide 16: Improving fleet age profile
# iy ae7 ee Improving fleet age profile (28% Airline > 10 Years 5 —10 Years s 39% 44% 2005 2006 2007 Weighted by aircraft seat numbers || < 5 Years
Slide 17: Year-on-Year Capacity Growth
Year-on-Year Capacity Growth 13-15% BH Actual Forecast 5% 5-6% 0.2%) Mill (0.2% ( Vox | ) (5%) 97 98 99 00 01 02 03 04 05 06 O07
Slide 18: $90m cost savings delivered
* $90m delivered (> $65 million target) ¢ Main projects that delivered in 2005 — Loyalty revamp — improved yields from external point sales — New Tasman service — IT — Cargo operations outsourced at LA airport — Improved productivity — Reduced cost of sales * $100m savings target for 2006 — Benefits
Slide 19: Engineering
& 5 ee “ no perorme 1 Engineering Engineering June 05 June 04 Fav/ $m $m (Unfav) Revenue 526* 537 (2%) Operating Expenses 474 469 (1%) EBITDAR 52* 68 (24%) EBIT 30* 45 (33%) || Internal Revenue External Revenue * includes $9 million impairment write-back of investment in Christchurch Engine Centre
Slide 20: Other (Airport Services)
Pp mo ie Pa ee - Utner (Airport Services & Other June 05 June 04 = Fav/ $m $m (Unfav) Revenue 155 156 (1%) Operating Expenses 148 135 (10%) EBITDAR 7 21 (67%) EBIT (5) 10 - || Internal Revenue External Revenue
Slide 21: EBITDAR to NPAT
June 05 June 04 Variance $m $m ‘Fav / (Unfav) EBITDRA 697 699 (3%) Depreciation (250) (236) (6%) Rental & Lease (235) (228) (3%) Net Interest 23 8 nia Revenue Unusual Items (3) (3) - Taxation (52) (74) 30% NPAT 180 166 8%
Slide 22: Total Cash and Gearing
hme oO AIR NEW ZEALANC Total Cash ($m) Gearing (%) 1,070 1,020 Wi 01 O02 03 04 01 O02 03 04 #4905 * Includes capitalised operating leases
Slide 23: Outlook
Slide 24: Outlook: 2006 fuel price increase
* 2006 fuel price increase of around $300m — Hope to recover close to $200m ° If fuel price persists at current levels, then the potential exists for the current year performance to be around 40% below 2005 * Past actions have proven Air NZ has the ability to cope with adversity * Positioned well to
Slide 25: Summary
AIR NEW ZEALAND NPAT up 8% to $180m Cash of $1.1billion Gearing improved 5 points to 51% Full year dividend of 5 cents per share, fully imputed Cost savings on track