Capital A Berhad · MYX:CAPITALA

Capital A Berhad — AirAsia — Q1 2007 Earnings Presentation

36 slides from Capital A Berhad's earnings presentation, Nov 30, 2006

  1. Slide 1: Now Everyone Can Fly: First Quarter 2007 Results

    “Now Everyone Can Fly” First Quarter 2007 Results 30 November 2006

  2. Slide 2: Disclaimer

    Disclaimer Now Everyone Can Fly Information contained in our presentation is intended solely for your personal reference and is strictly confidential. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the c

  3. Slide 3: The only Asian Low Cost Airline that made money in the last 5 years

    The only Asian Low Cost Airline that made money in the last 5 years Now Everyone Can Fly q Lowest cost airline in the World q Strong brand established q Hardware secured (130 Airbus for delivery up to 2012) q AirAsia Academy secures quality skilled manpower requirements q Distribution model across a

  4. Slide 4: Key Highlights

    Key Highlights Now Everyone Can Fly q Pretax profit of RM11.8 million – growth of 32% YoY on the back of 29% revenue growth – 29% EBITDAR margin q Strong growth profile maintained – passenger numbers grew 63% YoY – average fare decreased by 28% YoY q Cost improvement of 9% YoY q Full quarter turnaro

  5. Slide 5: Consistent passenger growth

    Consistent passenger growth Now Everyone Can Fly Passengers Flown by AirAsia Group (‘ (‘000) 000) 9,312 6,289 oY w t hY g r o 75% 3,169 2,839 1,811 1,481 611 291 M ar­2001 Jun­2002 Jun­2003 Jun­2004 Jun­05 Jun­06 Q12006 Q12007 è There is no stopping the LCC phenomenon 4

  6. Slide 6: Dominating ASEAN

    Dominating ASEAN Now Everyone Can Fly Period Destinations Served Jan 2002 6 Jun 2003 11 Jun 2004 26 Jun 2005 52 Jun 2006 65 NOW 71 Latest Routes KL – Palembang Bangkok – Yangon Upcoming Routes Bangkok – Langkawi KK – Macau KL – Jogjakarta 5

  7. Slide 7: Base Network

    Base Network Now Everyone Can Fly Bangkok 18 Routes Q 11 Penang / Alor Star Kota Kinabalu Kuala Lumpur 7 Routes Q 2 33 Routes Q 25 Johor Bahru Kuching 8 Routes Q 2 6 Routes Q 2 - 6 bases O 71 routes Q 48 aircraft Jakarta Existing bases 9 Routes Q 6 Potential New base 6

  8. Slide 8: Impact of Domestic Rationalization

    Impact of Domestic Rationalization Now Everyone Can Fly AirAsia Passenger Market Share in Domestic Malaysia 5 1% 27% 25% 20% 12 % 2002 2003 2004 2005 NOW q Domestic rationalization enables us to capture significant market share q AirAsia is now Malaysia’s largest domestic airline,,,, and growing! 7

  9. Slide 9: Results Commentary

    CONFIDENTIAL Now Everyone Can Fly Results Commentary

  10. Slide 10: Operational Statistics – Malaysia

    Operational Statistics – Malaysia Now Everyone Can Fly q Strong passenger growth – 63% growth q Capacity growth reflects new routes – 39% growth q Cost improvement despite record high oil prices – 2.20/ASK US cents, 9% improvement YoY – 1.17/ASK US cents ex fuel, 6% improvement YoY q Lower average f

  11. Slide 11: Profitability – Malaysia

    Profitability – Malaysia Now Everyone Can Fly Margins (%) (RM ‘000) Q1­2007 Q1­2006 ∆ (%) Q1­07 Q1­06 Revenue 239,574 186,277 29% EBITDAR 69,250 34,324 102% 28.9% 18.4% EBIT 23,731 7,460 218% 9.9% 4.0% Pretax Profit 11,772 8,934 32% 4.9% 4.8% q Profit margin improvement – increased business scale –

  12. Slide 12: Operational Statistics – Thailand

    Operational Statistics – Thailand Now Everyone Can Fly q Strong passenger growth – 67% growth q Capacity growth reflects frequency and new routes addition – 58% growth q Cost increase due to forex and high oil prices – 2.60/ASK US cents, 6% increase YoY – fuel forward swap contract has been squared

  13. Slide 13: Profitability – Thailand

    Profitability – Thailand Now Everyone Can Fly Margins (%) (THB ‘000) Q1­2007 Q1­2006 ∆ (%) Q1­07 Q1­06 Revenue 986,364 562,843 75% EBITDAR 144,661 67,200 115% 14.7% 11.9% EBIT 13,922 (19,292) n/a 1.4% (3.4%) Net Income 4,691 1,812 159% 0.5% 0.3% q Profit margin improvement – 15% EBITDAR margins – in

  14. Slide 14: Operational Statistics – Indonesia

    Operational Statistics – Indonesia Now Everyone Can Fly q Strong passenger growth – 179% growth q Capacity growth reflects frequency addition – 111% growth q Aggressive marketing and promotions increased cost – 2.95/ASK US cents, 22% increase YoY q Higher average fare and yields due to aggressive ma

  15. Slide 15: Profitability – Indonesia

    Profitability – Indonesia Now Everyone Can Fly Margins (%) (IDR million) Q1­2007 Q1­2006 ∆ (%) Q1­07 Q1­06 Revenue 163,341 51,161 219% EBITDAR 22,462 (5,645) na 13.8% (11.0%) EBIT 3,567 (16,215) na 2.2% (31.7%) Net Income 1,918 (6,155) na 1.2% (12.0%) q Turnaround achieved – ability to advertise far

  16. Slide 16: Ancillary Income Progress

    Ancillary Income Progress Now Everyone Can Fly Ancillary Income % Revenue q Significant growth over the quarter ­ excess baggage 12.5% ­ admin and changes ­ Go­Holiday ­ cargo contributions 8.4% q Go­Insure is very popular ­ will be available Thai & Indonesia 5.4% ­ making promotions to increase con

  17. Slide 17: Robust Cash Generation

    Robust Cash Generation Now Everyone Can Fly Shareholder Equity (RM millions) Cash from Operations (RM millions) 1,021 1,028 953 282 145 47 2005 2006* Q1­2007* 2006 Q1­2006 Q1­2007 * In Compliance with Malaysian FRS on deferred tax 16

  18. Slide 18: Solid Balance Sheet

    Solid Balance Sheet Now Everyone Can Fly Net Debt (RM millions) Net Gearing (Net Debt / Equity) 1.05 1,077 0.77 787 2005 2006 Q1­2007 2005 2006 Q1­2007 ­329 ­0.35 * In Compliance with Malaysian FRS on deferred tax 17

  19. Slide 19: Cost Management

    CONFIDENTIAL Now Everyone Can Fly Cost Management

  20. Slide 20: Lowest Cost in the World

    Lowest Cost in the World Now Everyone Can Fly Cost / ASK (US cents) Cost / ASK (ex fuel surcharge) Cost / ASK Cost / ASK (ex fuel) 2 .8 3 2 .6 3 2 .5 3 2 .3 7 2 .4 1 2 .2 0 1.3 5 1.2 4 1.17 2006 Q12006 Q12007 Malaysian Operations Superior cost containment despite fuel price impact 19

  21. Slide 21: Cost / ASK – what changed from last year to this year?

    Cost / ASK – what changed from last year to this year? Now Everyone Can Fly 2.20 (Q1­2007) vs. 2.41 (Q1­2006) {8.7% cost improvement} (US cents) Cost per Change Reasons ASK (%) Staff 0.31 (20%) Productivity gains, LCT Fuel & oil 1.03 (12%) Fuel efficient Airbus A320 Good User station charges 0.14 (1

  22. Slide 22: Fuel Hedge & Surcharge

    Fuel Hedge & Surcharge Now Everyone Can Fly q Currently purchasing fuel on the spot market ­ likely to remain status­quo until 31 December 2006 q Partial hedge in 2007 ­ 54% volume cover from 1 Jan to 30 June 2007 ­ 45% volume cover from 1 July to 30 September 2007 ­ upside protection at US$62.25/bb

  23. Slide 23: Airbus A320

    CONFIDENTIAL Now Everyone Can Fly Airbus A320

  24. Slide 24: Airbus A320 – WE WANT MORE!

    Airbus A320 – WE WANT MORE! Now Everyone Can Fly q 130 aircraft on tap: 100 firm orders + 30 options q Secures aircraft pipeline until 2012 q Received 14 aircraft to date, exceptionally popular by our guests q Reduces operational cost and enhances reliability 23

  25. Slide 25: Fleet Plan to Facilitate Strong Profitable Growth and Fleet Rejuvenation

    Fleet Plan to Facilitate Strong Profitable Growth and Fleet Rejuvenation Now Everyone Can Fly 100 Airbus A320 (180 seats) Boeing 737­300 (148 seats) 83 80 74 N LY) MO (FIR 60 4 4% 54 R= C AG 45 60 Fl eet 42 21 40 7 20 35 33 29 27 23 3 17 7 0 2002 2003 2004 2005 2006 2007E 2008E 2009E q Boeing 737­30

  26. Slide 26: Projected Passenger Growth (million pax)

    Projected Passenger Growth (million pax) Now Everyone Can Fly 40 es) v e ri d e li raft rm airc 30 nf i ed o 25% % (bas 33 R= er CAG 50% e ng 20 P ass 60% 29 23 10 15 9 0 2006A 2007E 2008E 2009E q Strong consistent growth with current fleet expansion q Trying to expedite aircraft delivery schedule f

  27. Slide 27: Airbus vs. Boeing Cost Comparison (KL to Kuching)

    Airbus vs. Boeing Cost Comparison (KL to Kuching) Now Everyone Can Fly Assumptions: q Fuel Cost: $75 / bbl q USD:MYR: 3.65 q Ticket Fare: RM150 (ticket + surcharge + admin) q Load Factor: 80% q Airbus A320 # seats: 180 q Boeing 737 # seats: 148 26

  28. Slide 28: Airbus vs. Boeing Cost Comparison (KL to Kuching)

    Airbus vs. Boeing Cost Comparison (KL to Kuching) Now Everyone Can Fly Airbus Boeing Per Seat Operating Expenses A320 737­300 Airbus Boeing Revenue 21,600 17,850 120.0 120.6 - Staff Cost 2,570 2,392 14.3 16.2 - Fuel and Oil 8,390 8,589 46.6 58.0 - User & Station Charges 822 722 4.6 4.9 - Maintenance

  29. Slide 29: Fleet Plan for FY2007

    Fleet Plan for FY2007 Now Everyone Can Fly 60 54 49 48 8 6 6 40 13 12 12 20 31 33 30 0 NOW End Q2 FY2007 End FY2007 Malaysia Thailand Indonesia Group Total 28

  30. Slide 30: AirAsia - Concluding Remarks

    AirAsia ­ Concluding Remarks Now Everyone Can Fly q World’s lowest cost carrier q Level playing field and equal status q LCC is now a way of life in Asia q Government supports the LCC q Airbus improves reliability and performance q Aircraft order secures growth pipeline until 2012 q AirAsia Academy

  31. Slide 31: Appendix

    CONFIDENTIAL Now Everyone Can Fly Appendix

  32. Slide 32: Operational Statistics – Malaysia

    Operational Statistics – Malaysia Now Everyone Can Fly Operational Statistics Q1 ­2007 Q1 ­2006 ∆ (%) Average Load factor 79% 70% 9 ppt # Passengers 1,944,621 1,192,692 63% Average fare (RM) 104 144 (28%) RPK (mn) 2,152 1,358 59% ASK (mn) 2,713 1,953 39% Rev/RPK (US cents) 3.08 3.61 (15%) Cost/ASK (

  33. Slide 33: Operational Statistics – Thailand

    Operational Statistics – Thailand Now Everyone Can Fly Operational Statistics Q1­2007 Q1­2006 ∆ (%) Average Load factor 76% 76% # Passengers 742,899 445,505 67% Average fare (RM) 1,277 1,231 4% Average fare (THB) 131 113 16% RPK (mn) 694 437 59% ASK (mn) 907 574 58% Rev/RPK (US cents) 3.46 3.14 10%

  34. Slide 34: Operational Statistics – Indonesia

    Operational Statistics – Indonesia Now Everyone Can Fly Operational Statistics Q1­2007 Q1­2006 ∆ (%) Average Load factor 84% 72% 12 ppt # Passengers 480,980 172,655 179% Average fare (RM) 130 104 25% Average fare (IND) 311,256 272,819 13% RPK (mn) 493 199 147% ASK (mn) 586 278 111% Rev/RPK (US cents

  35. Slide 35: Operating Expenses – Malaysia

    Operating Expenses – Malaysia Now Everyone Can Fly Operating Expenses % Revenue Q1 2007 Q1 2006 (RM ‘000) Q12007 Q12006 Revenue 239,574 186,277 - Staff Cost (30,861) (28,996) 12.9% 15.6% - Fuel and Oil (102,435) (87,114) 42.8% 46.8% - User & Station Charges (13,658) (11,949) 5.7% 6.4% - Maintenance

  36. Slide 36: Net Income (IFRS vs. FRS)

    Net Income (IFRS vs. FRS) Now Everyone Can Fly First Quarter FY2007 Adoption of IFRS Compliance with Group RM ('000) (IAS 12) MASB (FRS 112) Profit after tax and minority interests 94,520 5,662 Shareholders’ Funds 1,270,573 1,028,126 Basic Earnings Per Share (sen) 4.0 0.2 Cash from Operations 145,00

AirAsia — Q1 2007 Earnings Presentation on 6ix