Transat A.t. Inc. · TSX:TRZ
Transat A.t — Investor Presentation (September 2010)
27 slides from Transat A.t's investor presentation, Sep 13, 2010
Slide 1: September 13, 2010
September 13, 2010
Slide 2: Erratum
Erratum Slide 12: Outgoing market from France: Market The percentage for Transat and Thomas Cook has been corrected as follows: Transat - 8% Thomas Cook - 10%
Slide 3: 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 4: Agenda
Agenda Introduction to Transat Vision and strategy Review by market Destination and airlift strategy Financial Review Summary and outlook Appendix: Valuation metrics 3
Slide 5: 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 CE
Slide 6: 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 7: Our Vision for 2014
Our Vision for 2014 To be a leader in the Americas with a solid competitive position in several European countries 6
Slide 8: Strategies for the 2009-2011 period
Strategies for the 2009-2011 period 1 Focus on product differentiation 2 Optimize input costs (airlift, hotels, …) 3 Increase control over distribution of our sales 4 Open new outgoing markets (Americas and Southern Europe) 5 Invest in technologies (inventory & yield, distribution) 6 Capitalize on o
Slide 9: Transatlantic Market: Overview
Transatlantic Market: Overview Europe, especially France and UK, remains the number one regional market for international tourism (incoming and outgoing) New liberalization agreements could bring challenges and growth opportunities Easy for travellers to compare rates; fair proportion of air-only an
Slide 10: Transatlantic Market: Market
Transatlantic Market: Market 2006 2010 UK 21,6% 25,7% Transat Air Canada 8,7% Air India 3,6% British Airways 22,8% MyTravel 43,4% Zoom Airlines 22,2% 1,5% 50,0% Other 0,6% FRANCE 26,8% 34,2% Transat Air Canada 4,4% Air France 7,4% 6,9% Zoom Airlines 25,2% Other 20,2% 36,7% 38,3% 9
Slide 11: Transatlantic Market: Strategy
Transatlantic Market: Strategy Unique value proposition to the traveller Only player with a point-to-point strategy between 9 Canadian and 34 European destinations Offering uniquely suited to the leisure traveller (no connection, possibility of open jaws, etc.) Only major tour operator with a
Slide 12: Outgoing market from France: Overview
Outgoing market from France: Overview Fragmented market, with market consolidating 5 tour operators represent 55% of the market, vs 10 five years ago Nearly 250 tour operators share the remaining 45% Large players growing their market share International travel has recorded slow growth (1.4% C
Slide 13: Outgoing market from France: Market
Outgoing market from France: Market Tour operators: Distribution: €6 M market 5,100 travel agencies in France 1170 10% 23% 10% 8% 820 16% 7% 620 20% 12% 3% 540 11% 210 1740 42% 4% 34% Transat Thomas Cook AFAT Selectour Tourcom Kuoni FRAM NF + Havas + CWT Other Club Med TUI/NF Thomas Cook FRAM Other
Slide 14: Outgoing market from France: Strategy
Outgoing market from France: Strategy Added efficiency and lower costs through Use of an Air Transat aircraft for long-haul during winter (XL Airways) New agreement for medium-haul flying with Transavia (B737-800) Creation of Transat France Broad portfolio of products Long-haul (Vacances Tra
Slide 15: Canada to Sun destinations: Overview
Canada to Sun destinations: Overview Growth market Commoditized market with positive growth pattern (2.9 million packages sold last winter) Highly competitive market, intensified presence of scheduled carriers Use of Internet Majority of customers use it to retrieve information, but up to 60%
Slide 16: Canada to Sun Destinations: Market
Canada to Sun Destinations: Market Market share based on deployed capacity at end of season (all inclusive packages, Mexico/Caribbean, winter) 2009 - 2010 32,0% 1,7% 4,1% Sunwing Sunwing 17.3% 24,0% 18% 11,9% Signature Signature 6.7% (TUI) 9.5% 9,3% 17,0% Transat Sunwing Signature ACV TMR Others Sun
Slide 17: Canada to sun destinations: Strategy
Canada to sun destinations: Strategy Approach for the coming winter A product for everyone : • Doubling air-only sales (by legs on certain markets) • Including a ‘’luxury package’’ collection Products available earlier New yield management approach Giving a price guarantee on certain exclusi
Slide 18: Airlift capacity management
Airlift capacity management More holistic approach with embedded flexibility Objectives Ability to expand and contract depending on demand fluctuations or external events, per market Have the most efficient aircraft for a given route Air Transat fleet strategy: replace A310s by A330s by 2013 (
Slide 19: Destination Strategy
Destination Strategy Pursue vertical integration in high-margin destination services in high-potential markets Already present in Florida, Dominican Republic, Mexico, and Greece Potential in Southern Europe, North Africa Add outgoing tour operator from countries where we fly from Canada Mexico
Slide 20: Financial Review: Historical Performance
Financial Review Historical Performance Revenues Profitability (in billions of $) (in millions of $) Adjusted margin Adjusted income after taxes (1) Before impact of fuel hedge accounting, ABCP revaluation, repurchase of preferred shares and restructuring costs (2) Restated for new accounting polici
Slide 21: Financial Review: Statement of income & cash flow
Financial Review Statement of income & cash flow Winter Q3 2010 2009 Variance 2010 2009 Variance Revenues 1 853 2 006 -8% 867 819 6% Margin (4.2) 30.6 -114% 53.9 27.2 98% Net income(1) (20.9) 8.9 -335% 26.8 7.0 283% EPS diluted(1) (0.55) 0.27 -304% 0.70 0.21 233% $ flow - Operations 106.7 119.7 -11%
Slide 22: Financial Review: Statement of income & cash flow
Financial Review Statement of income & cash flow Q3 Year-to-date 2010 2009 Variance 2010 2009 Variance Revenues 867 819 6% 2 720 2 826 -4% Margin 53.9 27.2 98% 49.7 57.8 -14% Net income(1) 26.8 7.0 283% 5.9 15.9 -63% EPS diluted(1) 0.70 0.21 233% 0.16 0.48 -7% $ flow - Operations 48.2 24.9 94% 154.9
Slide 23: Financial Review: Cash and Balance Sheet
Financial Review Cash and Balance Sheet (at July 31) July 2010 July 2009 Cash ABCP Cash ABCP $ and investments 217 70 215 70 Drawn credit line 0 0 0 (60) Other debt (21) (41) Sous-total 196 70 175 10 Net $ 266 185 Cash flow from operations 56 Highlights Shares issue 62 Proceeds from shares issue imp
Slide 24: Financial Review: Outlook for Q4 2010
Financial Review Outlook for Q4 2010 % of revenues Transat main markets trends Transatlantic - Capacity up 15%, average fares also up 65 % Southern routes – Same as Q3 15% France – Same as Q3 20% Globally vs 2009 Anticipate higher revenues and margins 23
Slide 25: Financial Review: Outlook for winter 2011
Financial Review Outlook for winter 2011 Southern routes It has just started … Offer deployed (actual vs end of the season) • Global capacity is ± 15% higher • Transat capacity is ± 15 % higher As of today • Adjustments were made vs 2010 (wider offer for everyone) • Bookings ahead of last year
Slide 26: Summary
Summary Strong market share in our three markets A solid performance on the transatlantic market Ready for the coming winter A sound cash position 25
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