Transat A.t. Inc. · TSX:TRZ

Transat A.t — BMO Capital Markets Investors Presentation (December 2008)

25 slides from Transat A.t's conference presentation, Dec 23, 2008

  1. Slide 1: Leading the Way in International Holiday Travel

    INVESTORS PRESENTATION BMO CAPITAL MARKETS LEADING THE WAY IN INTERNATIONAL HOLIDAY TRAVEL December 23, 2008

  2. 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

  3. Slide 3: Agenda

    Agenda  Transat Overview  Market and Industry Highlights  Financial Review and Cash Situation  Strategic Plan & Recent Developments 3

  4. Slide 4: Transat A.T. Inc.

    Transat A.T. Inc. A vertically-integrated, international holiday travel specialist CRUISE DESTINATION AND AIRLINES ACCOMODATIONS COMPANIES GROUND SERVICES TRANSAT OUTGOING & INCOMING TOUR OPERATORS WIDE RANGE OF PACKAGED PRODUCTS & AIRLINE SEATS INTERNATIONAL DISTRIBUTION NETWORK TRAVEL AGENCIES • I

  5. Slide 5: Core business: Outgoing Tour Operator

    Core business: Outgoing Tour Operator  Transat offers packages, tours and cruises by assembling its own services with those bought from thousands of suppliers across the world  In more than 60 destination countries from Canada, France, United Kingdom & other European countries  To over 2.5 millio

  6. Slide 6: Transat A.T. Inc.

    Transat A.T. Inc. One of the largest integrated international tour operators worldwide Main markets Source and destination markets Destination markets only Source countries only 6

  7. Slide 7: Incoming Tour Operator & Destination Services

    Incoming Tour Operator & Destination Services  Largest incoming tour operator in Canada with more than 260,000 travellers from abroad (2008)  Key player in Greece with 65,000 travellers  Transat sells packages in more than 50 countries (to Canada and/or Greece)  Transat offers destination servic

  8. Slide 8: Air Travel

    Air Travel  Air Transat (wholly-owned)  Largest international charter carrier in Canada  Solid performance (on-time, reliability, customer service)  Agreement with WestJet (from Canada)  Other agreements/other carriers  Agreement with Sunquest for 3 years in Canada  Agreements with Thomas Coo

  9. Slide 9: Accommodation and Cruises

    Accommodation and Cruises  Agreements with more than 2,000 hotels worldwide  35% equity ownership in 5 hotels located in Mexico and the Dominican Republic  28 all-inclusive Lookéa Clubs in 16 countries in 2008  Comprehensive portfolio of cruises all over the world 9

  10. Slide 10: Distribution

    Distribution  Multi-channel distribution in Canada, France, UK  Travel agencies (corporate, franchised, independent)  Web sites and call centers (B2C, B2B)  Network of partners and GSAs in Europe  437 travel agencies in Canada, 67 in France 10

  11. Slide 11: Canadian sales by distribution channel

    Canadian sales by distribution channel Fiscal 2008 year-to-date Controlled sales 28.6% Third party sales 71.4% Travel agencies 21.3% Internet B2C sales 7.3% 11

  12. Slide 12: Tourism: Challenges and Opportunities

    Tourism: Challenges and Opportunities  Market resilient & growing (good demographics), but evolving and very competitive  More diversified source and destination-markets, new expectations, powerful consumer  Pressure on margins resulting from the mix of rapid rise of fuel costs plus intense compe

  13. Slide 13: International Tourist Arrivals Growth

    International Tourist Arrivals Growth (In millions) 1,600 SOUTH ASIA MIDDLE EAST AFRICA ACTUAL FORECASTS EAST ASIA/ 1,200 PACIFIC AMERICAS 800 EUROPE 400 0 1950 1960average Expected 1970annual1980 growth 1990 rate 19952000 2010 - 2020: 4.1% 2020 Source: UNWTO 13

  14. Slide 14: Three-year Review (2006-2008)

    Three-year Review (2006-2008) (Year-end Oct 31. In millions of C$ except per share amounts) 2006 2007 2008 (Restated) REVENUES 2,603.7 3,045.9 3,512.9 MARGIN (% of revenues) 126.9 4.9% 138.1 4.5% 127.3 3.6% NET INCOME adjusted* 65.8 2.5% 70.5 2.3% 57.5 1.6% EPS (diluted) – adjusted* 1.85 2.06 1.74 C

  15. Slide 15: Margin

    Margin (In millions of dollars) 163.8 126.9 138.1 120.6 127.3 74.1 75.0 58.0 2001 2002 2003 2004 2005 2006 2007 2008 15

  16. Slide 16: Fourth Quarter Oct. 31 (Adjusted)

    Fourth Quarter Oct. 31 (Adjusted) (In millions of dollars) 2008 2007 (Restated) REVENUES 790.4 680.4 MARGIN 29.3 21.2 NET INCOME (adjusted)* 15.9 8.8 EPS (diluted) (adjusted)* 0.49 0.26 CASH FLOW (from operations) (61.1) (54.7) * Results in 2007 adjusted to exclude the impact of new accounting rules

  17. Slide 17: Fiscal Year (Adjusted)

    Fiscal Year (Adjusted) (In millions of dollars) 2008 2007 (Restated) REVENUES 3,512.9 3,045.9 MARGIN 127.3 138.1 NET INCOME (adjusted)* 57.5 70.5 EPS (diluted) (adjusted)* 1.74 2.06 CASH FLOW (from operations) 155.2 134.5 * Results in 2007 adjusted to exclude the impact of new accounting rules on fu

  18. Slide 18: Credit Facilities Available

    Credit Facilities Available  Facility with NBC: $ 150M  Increase in facility (Oct.31): $ 43M  Total facilities $ 193M  Drawn on Oct.31, 2008 $ 100M Available on Oct.31, 2008 $ 93M  New FSTQ facility $ 60M  ABCP restructuring $ 71M New facilities $ 131M 18

  19. Slide 19: 2006-2008 Strategic Plan

    2006-2008 Strategic Plan  Market leader for sun packages in all Canadian regional markets: 1.1 million packages sold in 2008  Acquired a 35% equity position in hotel partnership, including 5 hotels in Mexico and the Dominican Republic  Solid position and healthy performance across the board in Fr

  20. Slide 20: Hotel Venture with H10 Hotels

    Hotel Venture with H10 Hotels  US$55 million investment for 35% equity interest  Option to increase to 45% within 5 years  5 hotels  3 in Cancun, Mexico ( 906 rooms)  2 in Punta Cana, DR ( 708 rooms)  Additional investment in 2008 of US$8.35 M in the venture to purchase land in Punta Cana, DR

  21. Slide 21: Tour Operators: Valuation metrics

    Tour Operators: Valuation metrics (In C$ millions, except per share data) SHARE EQUITY ENTERPRISE ADJ. EV / EBITDAR PRICE VALUE VALUE TOUR OPERATORS 17 Sept. 08 C$ MILLION C$ MILLION LTM 2008E 2009E TUI Travel €2.11 4,393 9,660 5.4x 5.2x 5.0x Thomas Cook £1.74 2,647 3,179 4.3x 2.9x 2.7x Kuoni Travel

  22. Slide 22: Tour Operators: Valuation metrics

    Tour Operators: Valuation metrics (In C$ millions, except per share data) P/E EBITDAR EBITDA RENT NET INCOME TOUR OPERATORS LTM 2008E 2009E TUI Travel 12.0x 10.0x 8.1x 7.0% 4.3% 2.7% 1.5% Thomas Cook 4.9x 5.2x 4.2x 4.4% 4.4% 0.0% 3.2% Kuoni Travel Holding 5.8x 6.3x 6.8x 4.8% 4.1% 0.7% 3.2% GROUP AVE

  23. Slide 23: Outlook

    Outlook  Winter sales ahead in Canada  Margin pressure stemming from competition & rising costs, including fuel/hedging situation  We expect lower EBITDA in dollars for the winter  Prepared for the recession 23

  24. Slide 24: Transat A.T. Inc.

    Transat A.T. Inc.  Volatile & competitive, but growing market  International, vertically integrated platform  More efficient, agile and innovative  Solid financial position and cash generation  Emphasis on growth and profitability  Strong focus on strategic plan 24

  25. Slide 25: Transat Investors Presentation BMO Capital Markets

    TRANSAT INVESTORS PRESENTATION BMO CAPITAL MARKETS LEADING THE WAY IN INTERNATIONAL HOLIDAY TRAVEL December 23, 2008

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