Kenya Airways Plc · NSEKE:KQ
Kenya Airways — H1 2012/13 Earnings Presentation
34 slides from Kenya Airways's earnings presentation, 2012
Slide 1: KQ 2012-13 Half Year Investors Brief
KQ 2012-13 Half Year Investors Brief 1
Slide 2: Agenda
Agenda Global Economy Airline Industry Overview KQ Business Review Financial Results Chairman’s Remarks Q&A 2
Slide 3: Global Economy
Global Economy Global growth at a slower pace in 2012 World trade growth slowed from above 13% in 2010 to slightly more than 3% in 2012 Asia Pacific remain stable, Japan recovery still below pre- earthquake Carriers in China, Latin America and the Middle East are growing strongly. Europe’s airlines
Slide 4: Airline Industry
Airline Industry Fragile outlook in Industry Profitability Forecast 2012 global GDP standing at 2.1% Factors impacting 2012 include: Sharp rise in oil prices since Dec 2011, and Euro zone crisis Industry’s future outlook: 2013 will be moderately better with slightly faster growth and slightly lower
Slide 5: Airline Industry Statistics Cont…
Airline Industry Statistics Cont… Year RPK ASK FTK ATK YTD 2012/13 Growth Growth Growth Growth CF Africa 10.1% 8.8% 4.2% 9.3% 65.2 Asia/Pacific 7.8% 5.4% (4.4%) (1.5%) 77.2 Europe 6.8% 3.7% (4.6%) 0.8% 77.6 Latin America 10.1% 8.4% 0.2% 4.1% 78.6 Middle East 18.6% 12.9% 14.6% 14.4% 78.2 North Americ
Slide 6: Airline profits forecast to fall further in 2012
Airline profits forecast to fall further in 2012 5.0 30 4.0 25 Net Margin 3.0 20 (left Scale) 15 2.0 Net Margin % Net Profit $B 10 1.0 5 - 0 -1.0 Net Profit -5 (Right scale) -2.0 -10 -3.0 -15 -4.0 -20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F 2013F
Slide 7: Premium Travel and Business Confidence
Kenya Airways <7. The Oracle of Africa * Premium Travel and Business Confidence 20 - Source: IATA, the JP Morgan/Markit 15 Business Confidence r 60 10 + . L 55 G 5 > o 0 T T T T Py T [ 50 3 os J o L 45 D 5 -10 5 Oo -15 5 t 40 x °o -20 5 Premium travel 35 -25 J growth ; -30 - L 30 SPS FS Fs FH Eg sss
Slide 8: KQ 2012-13 Half Year Business Review
KQ 2012-13 Half Year Business Review
Slide 9: Fleet in Service as at September
Fleet in Service as at September Category Fleet Type Seats 2011 2012 No. of No of No of Wide body Seats Aircraft No. of Seats Aircraft No. of Seats Boeing 777-200 322 4 1,288 4 1,288 Boeing 767-300 235 - - 1 235 Boeing 767-300 216 3 648 3 648 Boeing 767-300 209 1 209 1 209 Boeing 767-300 206 1 206 1
Slide 10: Network: Routes launched in the Half Year
Network Routes launched in the Half Year Delhi Kilimanjaro Eldoret route commenced in October 2012
Slide 11: Destination Growth
Destination Growth Strategic Planning/MG
Slide 12: Processes Improvement
Processes Improvement France Spain ON ItPASSENGER SALES AIRPORT BOARD ARRIVAL U.S. Next two years strategy include processes improvement India - To support growth as per 10 year plan China Customer journey map identified as starting point - Align KQ processes to meet & deliver customer Mongolianeeds
Slide 13: Customer Journey Map
Customer Journey Map Reclaim Baggage Customer Search for Purchase PAX On Board PAX Arrives Service Identifies service PAX Check In PAX Holding PAX Boarding Ticket Experience @ Destination Recovery Need providers PAX Transfer We have mapped the customer journey All the customer pain points have been
Slide 14: Processes Improvement
Processes Improvement France Spain It STANDARDISE OPTIMISE WITH OPERATIONAL STABILISE PROCESSES LEAN SIX SIGMA EXCELLENCE U.S. Team of 13 Black Belts and 40 Yellow Belts formed Indiafrom all Dept.’s - To drive process improvement across the business China - Initiate and sustain process improvement -
Slide 15: Corporate Social Responsibility
Corporate Social Responsibility Broken down into 3 major categories Education Water Environment 15
Slide 16: Education
Education Maasai Mara Marathon proceeds for construction of Dining hall and biogas project at Namunyak Girls.
Slide 17: Education
Education KShs 1.4m Completion of Maasai Mara Namunyak Girls Dormitory. This School Dormitory was funded by Kenya Airways & KLM.
Slide 18: Education
Education KShs 3.6m Completion of Classrooms for Ongora Primary School in South Nyanza.
Slide 19: Water
Water Gaigedi Water Project in Vihiga KQ – KShs 1.5m PTA Gaigedi sch.– KShs 0.5m & CDF – KShs 0.5m Samburu – Lesidai Water Project in Samburu to serve over 8,000 people in the region KShs 4m
Slide 20: 2012/13 Financial Results
Kenya Airways «2 (K) kenya airways :5 2012/13 Financial Results
Slide 21: Consolidated Income Statement
Consolidated Income Statement KShs Mil. 2012/13 2011/12 Var Var % Turnover 49,832 54,932 (5,100) (9.3) Direct Operating Costs (39,877) (39,521) (356) (0.9) Fleet Ownership Costs (5,345) (4,934) (412) (8.3) Gross Profit 4,610 10,477 (5,867) (59.9) Overheads (10,143) (9,458) (685) (7.2) Operating (Los
Slide 22: Revenue KShs mil
Passenger Turnover Movement Traffic down by Yield down in 3.0% in network Unfavorable ROX network by Actual KShs /USD 2.6% rate of 84.05 vs PY 87.91 55,000 Revenue KShs mil 48,587 - 1,231 50,000 - 1,175 - 1,988 - 441 43,645 45,000 40,000 -4,942 35,000 2011/12 RPKs Yield ROX Others 2012/13
Slide 23: Statement of Financial Position
Statement of Financial Position KShs Mil Actual Actual Var to Var % to ASSETS Sep-12 Mar-12 PY PY Aircraft 47,167 42,904 4,263 9.9% Properties, plant & equip 8,100 7,892 208 2.6% Leasehold land & buidings 5 5 0 5.2% Deferred expenditure 179 94 85 90.4% Aircraft deposits 10,347 4,364 5,983 137.1% Inv
Slide 24: Statement of Financial Position
Statement of Financial Position KShs Mil Actual Actual Var to Var % to EQUITY AND LIABILITIES Sep-12 Mar-12 PY PY Share capital 7,482 2,308 5,174 224.2% Share premium 8,629 - 8,629 100.0% Reserves 14,068 20,280 (6,212) (30.6%) Proposed dividend 374 374 - 0.0% Non controlling interest 56 61 (5) (8.2%
Slide 25: Statement of Cash Flows
Statement of Cash Flows Actual Actual Var to Var % to KShs Mil Sep-12 Sep-11 PY PY Profit before tax (6,589) 2,826 (9,415) (333.2%) Non operational items 2,683 2,678 5 0.2% Movt in working capital 4,158 (1,393) 5,551 (398.5%) Cash generated from operations 252 4,111 (3,859) (93.9%) Interest received
Slide 26: Future Outlook
& Kenya Airways <3. The Oracle of Africa * Future Outlook
Slide 27: Fleet Expansion
Fleet Expansion
Slide 28: Fleet Development
Fleet Development APR TO SEP 2011/12 Aircraft Type No of Aircraft Date of acquisition Embraer E -190 1 Leased May - 11 2 Leased Sep - 11 APR TO SEP 2012/13 Aircraft Type No of Aircraft Date of acquisition Embraer E -190 1 Leased May - 12 2 Owned Aug & Sep -12 Boeing 767-300 ER 1 May - 12 OCT TO MAR
Slide 29: KQ Dreamliner Update
KQ 787 Dreamliner Update KQ has 9x 787 aircraft on order with the following features: • “game-changing” aircraft; • significantly lower fuel burn and maintenance costs • Ultra-long range • Enhanced passenger comfort • New interior product (seats, In-Flight Entertainment) • First delivery to KQ expec
Slide 30: Opportunities
Opportunities France Increase Revenues Spain It Schedule Changes Bamako/Dakar x3 weeklyU.S. effective Nov12 Ouagadougou/Contonou x3 weekly effective Nov12 India Delhi morning departure ex NBO effective Nov12 Entebbe 3x Additional frequencies (early morning departures) effective Nov12 China Johannesb
Slide 31: Opportunities Cont..
Opportunities Conti.. Business Processes Review Process Mapping to improve efficiency in service delivery Cost Cutting Initiatives Stringent measures to reduce costs
Slide 32: Major Challenges
Major Challenges Competition JKIA infrastructure constraints Volatile Fuel Prices Double Taxation Agreements negotiations Kenya political climate Security situation in Kenya Euro zone Crisis
Slide 33: Update on Airport Development
Update on Airport Development 1. Minister for transport has appointed a steering committee for new developments, KQ is a member. 2. Greenfield terminal contract signed, but confirmation of duration still outstanding. 3. Consideration ongoing for a temporary terminal as a stop gap measure. 4. Termina
Slide 34: Q&A