Qantas Airways Limited · ASX:QAN
Qantas Airways — H1 2002/03 Earnings Presentation
15 slides from Qantas Airways's earnings presentation, Feb 20, 2003
Slide 1: 2002/03 Interim Results
2002/03 Interim Results Presentation to Investors 20 February 2003 Geoff Dixon Chief Executive Officer \Noawra Ss Overview e Financial results « Fleet strategy « Risk management « Sustainable future program « Air New Zealand « Summary and outlook fio
Slide 2: Highlights
Highlights Six months to. Six months to increase/ December December (decrease) 2002 2001 % Sales and operating revenue * $m §,883.2 §,383.0 9.3 Expenditure $m (5,346.4) (5,112.5) 4.6 EBIT $m §36.8 270.5 98.4 Net interest $m (23.7) (39.2) (39.5) Profit before tax $m §13.1 231.3 121.8 Net profit after
Slide 3: Expenditure
Expenditure Manpower and staff related $bn up 16.2% 6.0 Variable aircraft operating down 0.6% 5.0 Fuel and oil down 7.9% 40 Depreciation and amortisation up 0.1% 3.0 Tour and travel cost of sale up 10.9% 2.0 Selling and marketing 40 up 3.7% , Capacity hire down 11.1% 00 Non-cancellable operating = D
Slide 4: International and Domestic
2oowo2 4H $(15.5)m 2002/03 International EBIT of $263.9m, or 49.2% of Group EBIT RPKs up 2.5% ASKs down 3.3% Seat factor up 4.6% pts to 80.6% Yield excluding exchange increased by 4.3% 2001/02 hoanras 2002/03 Domestic EBIT of $160.1m, or 29.8% of Group EBIT RPKs up 24.5% ASKs up 24.9% Seat factor do
Slide 5: Subsidiaries
$m 260 5 450 4 400 4 50 4 2001/02 2002/03 Subsidiaries EBIT of $112.8m, or 21.0% of Group EBIT Reflects improved results for QantasLink, Qantas Holidays, Qantas Defence Services and Air Pacific 2001/02 hoanras 2002/03 Qantas Holidays EBIT up by 14.2% to $19.3m Reflects an improvement in Australian o
Slide 6: QantasLink
2001/02 2002/03 QantasLink EBIT up by 78.3% to $37.8m RPKs up 3.5% ASKs up 2.5% Seat factor up 0.7% pts to 73.3% Yield excluding exchange decreased by 3.5% Store 2 2001/02 hoanras 2002/03 Qantas Flight Catering EBIT down by 3.7% to $36.6m Current year result reflects inclusion of SnapFresh for six m
Slide 7: Other Subsidiaries
Other Subsidiaries » EBIT down by 35.9% to $19.1m » Prior year comparative includes a cumulative equity accounting adjustment on initial recognition of associate net profit of $18.1 million Chart represents EBIT contribution by other subsidiaries and associates to 2002/03 interim results Balance She
Slide 8: Fleet Strategy
Fleet Strategy Aircraft retired during six months to December 2002: - one B747-200 - two BAe146, one Shorts 360 and twelve Beechcraft 1900 Aircraft delivered during six months to December 2002: — three B747-400ER - six B737-800 — two A330-200 Store hoanras Fleet Strategy Aircraft to be delivered dur
Slide 9: Fleet Strategy
Fleet Strategy Progress on roll-out of product initiatives: — IFE upgrade in 24 B747-400 aircraft by March 2003 — Installation of business class sleeper seat commencing mid-2003, with completion during 2004 — Reconfiguration of ten two-class B747-400 aircraft by mid-2003 Fe | Risk Management Active
Slide 10: Risk Management
Risk Management Cost reduction initiatives: — Reduction in planned flying from March 2003 — Freeze on discretionary expenditure — Use of accumulated leave to reduce staff by equivalent of 1,500 full time employees between now and 30 June 2003 Current round of EBA negotiations: — Agreements reached w
Slide 11: Sustainable Future Program
Sustainable Future Program Increased operational efficiency and reduced unit costs through: - Cross-functional change to operations — Repositioning of the business model within functional areas — Process redesign of activities within functional areas Sustainable Future Program Savings will be realis
Slide 12: Air New Zealand
Air New Zealand Formally lodged application with ACCC and NZCC on 9 December 2002 Subscribed for convertible notes equal to 4.99 per cent of Air New Zealand's issued capital on 31 December 2002 Lodged summary of undertakings to the ACCC on 24 January 2003 Draft determination expected in April 2003 F
Slide 13: Summary and Outlook
Summary and Outlook @ Insuch an environment, our profit target would become more difficult to achieve @ Whatever the outcome of the Iraq situation, Qantas is well positioned to maximise its opportunities when the global travel market recovers Ses SN oanrTas 13
Slide 14: Appendix: Variances to Prior Year
Appendix Variances to Prior Year (excluding exchange) increase/ (decrease) % Sales and operating revenue 10.5 Net passenger revenue 12.0 Net freight revenue 7.2 Tour and travel sales 20.2 Contract work revenue 14.2 Revenue from other sources (18.0) Group yield per RPK 2.3 Freight yield per RFTK 8.6
Slide 15: Variances to Prior Year
Variances to Prior Year (excluding exchange) increase/ (decrease) % Expenditure 6.5 Manpower and staff related 16.4 Selling and marketing §.0 Variable aircraft operating 2.3 Fuel and oil {1.6} Property 12.5 Computer and communication 7.0 Depreciation and amortisation 0.1 ee hoanras Variances to Prio