Transat A.t. Inc. · TSX:TRZ
Transat A.t — Investor Presentation (March 2011)
27 slides from Transat A.t's investor presentation, Mar 23, 2011
Slide 1: March 23, 2011
transat March 23, 2011
Slide 2: Forward-looking Statements
Forward-looking Statements This presentation contains certain forward-looking statements with respect to the Corporation. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the
Slide 3: A vertically-integrated holiday travel tour operator
A vertically-integrated holiday travel tour operator ACCOMODATION CRUISE DESTINATION AIRLINES COMPANIES SERVICES TRANSAT OUTGOING & INCOMING TOUR OPERATORS WIDE RANGE OF PACKAGED PRODUCTS, AIRLINE SEATS, FIT* TRAVEL INTERNATIONAL MULTI-CHANNEL DISTRIBUTION NETWORK TRAVEL AGENCIES • INTERNET & CALL C
Slide 4: A vertically-integrated holiday travel tour operator (markets by season)
A vertically-integrated holiday travel tour operator WINTER SEASON SUMMER SEASON Nov - April May - October M A R South (80%) South (10%) K Transatlantic (10%) Transatlantic (65%) E T France (10%) France (25%) S MULTI-BRAND, MULTI-CHANNEL 4
Slide 5: General comments
General comments Market conditions depend on Global capacity deployed (supply) Global demand from consumers Price reductions to stimulate demand Forecasting One should use the corresponding quarter Assess market conditions. Keep in mind that: • Significant portion of bookings within 30 day
Slide 6: Financial Review
Financial Review Financial Results Q1 Q2 In millions of dollars, except per-share amounts 2011 2010 2011 2010 Revenues 810 793 1 060 Margin (EBITDA) (14.6) (12.4) 8.2 Net income (financial statements) (13.5) (13.9) 6.2 Net income (adjusted) (19.4) (18.2) (2.7) EPS (adjusted) (0.51) (0.48) (0.07) 6
Slide 7: Sun market Winter 2011 Indications
Sun market Winter 2011 Indications Surveys from the Conference Board of Canada Consumers’ confidence level up Travel intentions up (+6.8%) Travel intentions to U.S. up (+6.3%) Capacity (Current vs Actual 2010) Fall: Global +28%; Transat +0% • Sunwing (+71%) and Westjet (+49%) Winter: Globa
Slide 8: Sun market Winter 2011 Market share
Sun market Winter 2011 Market share Market share based on deployed capacity vs end of season last year (for all inclusive packages, Mexico/Caribbean, winter) 2009 - 2010 2010 - 2011 32.0% 32.3% 1.7% 2.6% 4.1% 3.5% 24.0% 22.1% 11.9% 13.6% 9.3% 10.0% 17.0% 15.9% Transat Sunwing Signature ACV TMR Other
Slide 9: Sun market Winter 2011 Indications Actions taken
Sun market Winter 2011 Indications Actions taken No hedging Products made available June 1 Added seat-only capacity More extensive line up of products* Yield approach (per destination, more aggressive group prices and price guarantees) Improved aircraft utilization Incentive program fo
Slide 10: Sun market Winter 2011 Q2 indications vs last year
Sun market Winter 2011 Q2 indications vs last year As of March 10 Capacity up 9% (no reduction planned) Bookings up Load factor slightly ahead Fares similar Lower USD offset by higher fuel Hotel cost to follow 10
Slide 11: Financial Review
Financial Review Financial Results Summer Annual In millions of dollars, except per-share amounts 2011 2010 2011 2010 Revenues 1 646 3 499 Margin (EBITDA) 131.8 127.6 Net income (financial statements) 73.3 65.6 Net income (adjusted) 74.6 53.7 EPS (adjusted) 1.96 1.41 11
Slide 12: Transatlantic market
Transatlantic market 25.7% Leadership position on the UK two largest transatlantic Transat Air Canada 22.8% holiday markets, and selling British Airways seats and products Other 1.5% in 12 European countries 50.0% 2010 34.2% FRANCE Transat 7.4% Air Canada Air France 20.2% Other 38.3% 12
Slide 13: Transat: competitive advantages on transatlantic market
Transat: competitive advantages on transatlantic market Unique value proposition for leisure travelers 34 European & 8 Canadian destinations (nearly 70 city-pairs) Affordable car rentals, hotels, coach tours, etc. Sell from Canada and Europe Multi-channel distribution* *Travel agents, web and call c
Slide 14: Summer 2011 highlights
Summer 2011 highlights Transatlantic (65% of our activities) Capacity up 10% Bookings up Load factor similar Fares similar Currently significant uncertainty surrounding oil prices additional fuel surcharges continue to use hedging instruments Sunwing initiating a program 14
Slide 15: Summer 2011 highlights France
Summer 2011 highlights France (25%) North Africa events Bookings still slightly ahead 1 A330 from Air Transat operated by XL Airways in winter only New agreement with Transavia in place 15
Slide 16: Cash and Balance Sheet (at January 31)
Financial Review Cash and Balance Sheet (at January 31) January 2011 January 2010 Cash ABCP Cash ABCP $ and investments 199 75 148 73 Drawn credit line 0 0 0 (77) Other debt (14) (29) Sous-total 185 75 119 (4) Net $ 260 115 Highlights Cash flow from operations 184 Cash flow from operations improveme
Slide 17: In conclusion
In conclusion Q2 – Sun destinations (90%) Several players, with many aiming at increased market share Prices are similar Higher fuel costs will offset the favourable impact of weaker USD Results should be similar to last year Next summer – Transatlantic (65%) Transat capacity up 10% Oil
Slide 18: Appendix
Appendix 18
Slide 19: A vertically-integrated holiday travel tour operator
A vertically-integrated holiday travel tour operator Among the largest tour operators worldwide (by revenue and number of travellers) Main source markets: Canada, France, United Kingdom, and other European countries 3 million travellers annually, to more than 60 destination countries In Canada, we a
Slide 20: Vision for 2014
Vision for 2014 A leader in the Americas with a solid competitive position in several European countries 20
Slide 21: Objectives for 2011
Objectives for 2011 1 Continue developing IT systems 2 Southern market Development plan for Ontario and Western Canada Line up of products (expand and adapt to market trends) 3 Transatlantic market Maintain competitive position Increase our presence in Europe (Spain and Germany) 4 France mar
Slide 22: Airlift capacity: More holistic approach with embedded flexibility
Airlift capacity: More holistic approach with embedded flexibility Objectives Ability to expand and contract (use of third party suppliers): Depending on demand fluctuations or external events Per market Air Transat fleet strategy: Replace A310s by A330s by 2013 Sourcing of aircraft Air Transa
Slide 23: Destination Strategy
Destination Strategy Pursue vertical integration in high-margin destination services and/or in high-potential markets Already present: Florida, Dominican Republic, Mexico, and Greece Potential in Spain, Italy, Tunisia … Develop/Add outgoing tour operator towards destinations we already serve or
Slide 24: Historical Performance
Financial Review Historical Performance Revenues Profitability (in billions of $) (in millions of $) 3,51 3,55 3,50 164 3,05 138 2,60 127 127 128 121 2,37 2,20 93 80 74 66 50 55 54 34 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Adjusted margin Adjusted income after taxes (1
Slide 25: Statement of income & cash flow
Financial Review Statement of income & cash flow Winter Summer 2010 2009 Variance 2010 2009 Variance Revenues 1 853 2 006 -8% 1 646 1 539 7% Margin (4.2) 30.6 -114% 131.8 62.8 110% Net income(1) (20.9) 8.9 -335% 74.6 24.8 201% EPS diluted(1) (0.55) 0.27 -304% 1.96 0.74 165% $ flow - Operations 106.7
Slide 26: Statement of income & cash flow
Financial Review Statement of income & cash flow Summer Year 2010 2009 Variance 2010 2009 Variance Revenues 1 646 1 539 7% 3 499 3 545 -1% Margin 131.8 62.8 110% 127.6 93.4 37% Net income(1) 74.6 24.8 201% 53.7 33.7 59% EPS diluted(1) 1.96 0.74 165% 1.41 1.01 40% $ flow - Operations 12.4 (74.5) 117%
Slide 27: Y<transat
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