Air New Zealand Limited · NZX:AIR
Air New Zealand — H1 2007 Earnings Presentation
18 slides from Air New Zealand's earnings presentation, Feb 27, 2007
Slide 1: Air New Zealand Interim Result 31 December 2006
Slide 2: Strong growth in interim profitability
STRONG GROWTH SE IN INTERIM PROFITABILITY — PB UT Net profit | Revenue Growth EPS* AIR NEW ZEALAND &”
Slide 3: Revenue growth across all major routes
ACROSS ALL MAJOR ROUTES stu GROWTH Loi Europe a 12% “Asia/Europe 15% "Australia & Pl # 10% 1 $522m “Domestic rok $554m # 3 7 S200rn SAORI > SGOOI ‘Dec 05 revenue IDec 06 increase. W ZEALAND 3”
Slide 4: Network changes: exited routes
Auckland - Singapore exited October 06) Auckland — Nagoya (exited March 06).~ _ Auckland Taipei : _ fexited March 06). - Christchurch = Los Angeles exited July 06) ~ EW ZEALAND 04
Slide 5: Business Transformation
« Business Transformation (simplify processes) fine service model . in new aircraft > $87 ora... new markets. and amazing customer ; experiences - : * Invest in-new alvcratl and product Grow/align network : Brand Personality’ - » Deliver new service model in the air.and on the ground Environmental P
Slide 6: Gearing is at the low end of our target range
GEARING IS AT THE LOW END OF OUR TARGET ~ GE DUE TO HEALTHY CASH RESERVES AND — A ROBUST BALANCE SHEET S sanasiananng RANGE : Brooted free: cash will result i in financial position becoming even stronger. a Capital expenditure retreats to around $200m i in. FYO8 from $550m ir in FYO? “Wt this stage
Slide 7: Interim dividend lifted and special dividend declared
RIM DIVIDEND LIFTED AND , SPECIAL DIVIDEND DECLARED & After taking into account the improved profitabit ity and outlook, the interim dividend was increased to three. _ cents per share. SS po ~ » Review of current medium- term financial and > Cash projections has resulted ina — special dividend of 10
Slide 8: Rob McDonald, Chief Financial Officer
Slide 9: A good result - 12% revenue growth, 61% NPAT growth
- AGOOD RESULT - | 12% REVENUE GROWTH: 61% NPAT GROWTH & ‘Gearing includes net:capitalised aircraft operating leases trested as debt-and convertible notes treated as eqiity. ', Be at 30 June 2006 + Prlorte accounting forcash losses: relati _ contracts that hedge exposures in other
Slide 10: Soanm ~
Soanm ~ “Som ees Sune. “S180, a oe Si 200
Slide 11: Monthly yield and movement
Jul Aue oo Sep tek 0 New Big Ode 06 oe ‘08 O8 O88 OB OF MOY Ibniilacior i ptimovemaih ame ATR Weld MOVEMENT camo. YTD ylald mowdmnent EE ad)
Slide 12: Overall inflight experience / Business class scorecard
~ Qverail inflight experience -emme Crew, appearance Creve responsiveness ‘Chew dvaitability ° Helpful é attentive Welecine & trienally © Range of etiiantainiment Amiblanee i Seat Comfort : 26 et " ' iq fea Source: Ar Mew Zealand inflight Customer Survey. . .. BUSINESS CLASS YIELD & LOAD FACTOR SCOR
Slide 13: Strong domestic performance and Tasman return to profitability
= + Strong domestic performance particularly given growth j in capacity — 'n regional markets _* Tasman returns to profitability asa result of higher yields, traffic. “and cost savings Bar-on-board ; Domestic fare reductions Grab-a- seat
Slide 14: Incremental cost savings
" incremental cost savings - - Additional cost savings ; as at 31 Dec 06° was $63m with labour savings the largest contributor at $31m followed by distribution at $18m ALAND)
Slide 15: Operating cash down due to rollover of contracts
PERATING CASH DOWN DUE TO ROLLOVER OF x CONTRACTS RELATING TO OTHER PERIODS © ALAND =
Slide 16: Slide 16
Slide 17: Analysts range between $204m to $232m PBUT
» Analysts range between $204 to > $232 Tnillion PBUT - ° We note that the level of disclosure has allowed analysts to forma _ realistic expectation of the Company’s performance
Slide 18: Good improvement in profitability
« Good improvement in profitability = PBUTup 35% _ = NPAT up 61 % -EPS up 60% Garis “«. Gearing of 46.7%* is at the lower end of our target range * Interim divi dend lifted to.3 cents per share . Special dividend of 10.cents per share declared — ‘-Long-haul showing improvement, but: earings still we