Qantas Airways Limited · ASX:QAN
Qantas Airways — FY2005 Earnings Presentation
14 slides from Qantas Airways's earnings presentation, Aug 18, 2005
Slide 1: 2004/05 Full Year Results Presentation to Investors
2004/05 Full Year Results Presentation to Investors Geoff Dixon Chief Executive Officer 18 August 2005 h.eanTas Group Highlights Sales and operating revenue 12,648.8 Increase/ 12 months to (decrease) June 2004 % 42 months to June 2005 EBIT _ Net borrowing costs Profit before tax Net profit after tac
Slide 2: Group Strategy
Group Strategy e To return the Qantas Group to a position where it generates a positive spread to its cost of capital by — Developing our flying portfolio to provide the most competitive business models in all major markets and segments — Extending reforms to achieve permanent unit cost reductions a
Slide 3: Flying Strategy - Domestic
Flying Strategy - Domestic e Segmented approach to deliver most competitive customer proposition and economics in premium, leisure and regional markets e Defend optimal Group market share of 65% — Estimated market share of 65.9% for the year to May e Improve connectivity to preserve network integrit
Slide 4: Qantas
Qantas e Profitably grow integrated full service network, covering major domestic and international markets — Aggressively pursue permanent unit cost reductions and improved operating efficiency — Simplifying dealing models — Streamlining cost to serve customers ~ Improving inflight supply chain eff
Slide 5: Jetstar
Jetstar hoeawras Improve profitability on and grow leisure routes as lowest cost operator — 10 A320s introduced, with remaining 13 by June 2006 — Costs ahead of target — Lowest cost domestic airline in second half with unit cost of 7.62c/ASK — One of Australia’s most recognised new brands — Product/
Slide 6: Value-based International
Value-based International e Achieve step change in economics in price-sensitive markets — Jetstar’s launch of Christchurch services — Complementary brand offering — Opportunity to grow leisure markets — Gold Coast-Christchurch — Continuing to evaluate opportunities hoeawras Asian Value-based Airline
Slide 7: Fleet Strategy
Fleet Strategy e Aircraft added to service during 2004/05 — 4A330-300s — 6B737-800NGs — 9A320-200s — 3Dash 8-Q300s — 2 Bae146-100s e Aircraft retired/released from service during the year — 2B767-200s — 6B737-300s — 3Dash8-100s — 3BAe146s (2 x 200/1 x 100) hoanwras Fleet Strategy e Major fleet inves
Slide 8: Sustainable Future Program
Sustainable Future Program TOTAL BENEFIT TOTAL BENEFIT TARGET 3 YEAR Achieved in Achieved in 2005/06 CUMULATIVE $ million oe 200804 0 2004/05 TOTAL Labour productivity 156 150 169 475 Fleet simplification, product initiatives and overheads 211 279 269 Distribution initiatives 145 116 85 8G Total SO
Slide 9: Sustainable Future Program II
Sustainable Future Program Il e Extending Program, with a target of $3 billion of savings over five years to June 2008 — Management leading the way —15% headcount reduction — Lean Sigma to be rolled out across Group — Continued process simplification hoeawras Business Reorganisation e Delivering a b
Slide 10: Freight
Freight e Profitably grow the business and increase revenues to Qantas flying segments — Introduction of three dedicated freighters — Sydney to US and Frankfurt via Shanghai, Sydney to Hong Kong — Charters — Australian air Express and Star Track Express continuing to strengthen position in domestic
Slide 11: Qantas Catering
Qantas Catering e Restructuring to improve profitability — Performance affected by price reductions and change in revenue mix — Flight catering market remains very competitive — Focus on cost and efficiency improvements through process redesign and new business models hoeawras Capital Management e M
Slide 12: Capital Management
Capital Management e Full year dividend of 20 cents per share (up 17.6%) — Reflects confidence in ability to fund future growth and reinvestment — Inline with active capital management strategy to maximise shareholder value e No plans to raise equity other than the continued operation of the Dividen
Slide 13: A-IFRS
A-IFRS e In June 2005, Qantas announced preliminary impacts of A-IFRS, which results in a reduction in retained earnings of $842.0 million — Numbers have been updated for June 2005 actual results — June 2005 Financial Report and this announcement are prepared using existing Australian Accounting Sta
Slide 14: Outlook
Outlook e Considering these factors, the current year will be challenging Do not expect to fully recover higher fuel costs Second haif will be more difficult than first Therefore, will not achieve the same levels of profitability in the current financial year However we are confident our strategies