Singapore Airlines Ltd. · SGX:C6L

Singapore Airlines — FY2008-09 Earnings Presentation

40 slides from Singapore Airlines's earnings presentation, May 15, 2009

  1. Slide 1: Singapore Airlines Group Analysts / Media Briefing FY2008-09 Results

    SINGAPORE AIRLINES GROUP ANALYSTS / MEDIA BRIEFING FY2008-09 RESULTS 15 MAY 2009

  2. Slide 2: The Group FY2008-09 Results

    THE GROUP FY2008-09 RESULTS

  3. Slide 3: Group Revenue – FY2008/09

    GROUP REVENUE – FY2008/09 ($ million) ($ million) 17,000 15,973 15,996 16,000 Group 15,000 14,494 Revenue 0.1% 14,000 13,341 13,000 12,013 12,000 5-Year CAGR + 7.4% 0 2005 2006 2007 2008 2009 Slide 3

  4. Slide 4: Group Expenditure – FY2008/09

    GROUP EXPENDITURE – FY2008/09 ($ million) ($ million) 16,000 15,093 13,848 14,000 13,180 Group Expenditure 12,128 12,000 9.0% 10,696 10,000 5-Year CAGR 8,000 + 9.0% 0 2005 2006 2007 2008 2009 Slide 4

  5. Slide 5: Group Operating Profit – FY2008/09

    GROUP OPERATING PROFIT – FY2008/09 ($ million) ($ million) 2,800 2,400 2,125 Operating 2,000 Profit 57.5% 1,600 1,317 1,314 1,213 1,200 904 800 400 0 2005 2006 2007 2008 2009 Slide 5

  6. Slide 6: Group Operating Profit and Margin – FY2008/09

    GROUP OPERATING PROFIT – FY2008/09 ($ million) ($ million) (%) 2,800 13.3 14 2,400 11.0 12 Operating 2,000 9.1 9.1 10 Profit 57.5% 1,600 8 5.6 1,200 6 Operating 800 4 Profit Margin 7.7% pts 400 2 0 0 2005 2006 2007 2008 2009 Slide 6

  7. Slide 7: Contribution to Group Operating Profit – FY2008/09

    CONTRIBUTION TO GROUP OPERATING PROFIT – FY2008/09 ($ million) SIA $2,125M 2,100 3.4% $821M 4.8% (-49.9%) 1,800 8.2% 1,500 SATS Group $904M $3M 1,200 77.4% Others 4.6% (-2.0%) SIAEC 12.5% 900 SATS 18.9% SIAEC 600 $10M SIA (+9.4%) 300 91.1% 6.2% 0 SIA Cargo SIA Cargo -27.1% -300 $377M 2008 2009 Slide

  8. Slide 8: Group Revenue by Quarter – FY2008/09

    GROUP REVENUE – FY2008/09 ($ million) 2007-08 2008-09 ($ million) 4,500 4,379 4,250 4,132 4,164 4,000 3,750 3,500 3,321 3,250 3,000 0 Q1 Q2 Q3 Q4 Slide 8

  9. Slide 9: Group Revenue Quarterly Change – FY2008/09

    GROUP REVENUE – FY2008/09 ($ million) 2007-08 2008-09 ($ million) 4,500 4,250 +412 -112 4,000 +510 3,750 -786 3,500 3,250 3,000 0 Q1 Q2 Q3 Q4 Slide 9

  10. Slide 10: Group Expenditure by Quarter – FY2008/09

    GROUP EXPENDITURE – FY2008/09 ($ million) 2007-08 2008-09 ($ million) 4,500 4,250 4,148 4,000 3,788 3,807 3,750 3,500 3,350 3,250 3,000 0 Q1 Q2 Q3 Q4 Slide 10

  11. Slide 11: Group Expenditure Quarterly Change – FY2008/09

    GROUP EXPENDITURE – FY2008/09 ($ million) 2007-08 2008-09 ($ million) 4,500 4,250 4,000 3,750 +699 +206 3,500 +630 -290 3,250 3,000 0 Q1 Q2 Q3 Q4 Slide 11

  12. Slide 12: Group Operating Profit by Quarter – FY2008/09

    GROUP OPERATING PROFIT – FY2008/09 ($ million) 2007-08 2008-09 ($ million) 700 600 500 400 343 357 300 232 200 100 0 -28 -100 Q1 Q2 Q3 Q4 Slide 12

  13. Slide 13: Group Operating Profit Quarterly Change – FY2008/09

    GROUP OPERATING PROFIT – FY2008/09 ($ million) 2007-08 2008-09 ($ million) 700 600 500 -318 400 -120 -287 300 200 -496 100 0 -100 Q1 Q2 Q3 Q4 Slide 13

  14. Slide 14: Group Net Profit by Quarter – FY2008/09

    GROUP NET PROFIT – FY2008/09 ($ million) 2007-08 2008-09 ($ million) 600 500 FULL YEAR 2008-09 400 359 324 337 $1,062M 300 200 100 42 0 Q1 Q2 Q3 Q4 Slide 14

  15. Slide 15: Group Net Profit Quarterly Change – FY2008/09

    GROUP NET PROFIT – FY2008/09 ($ million) 2007-08 2008-09 ($ million) 600 500 -253 FULL YEAR -184 2008-09 400 -65 $1,062M 300 -486 200 $988M c (-48.2%) 100 0 Q1 Q2 Q3 Q4 Slide 15

  16. Slide 16: Group Net Profit Bridge – FY2008/09

    GROUP NET PROFIT – FY2008/09 ($ million) 2,400 2,049 2,049 2,000 -1,221 1,600 - 988 1,200 1,062 -128 800 +362 1,062 Lower Lower Tax 400 operating interest writeback profit receivable & of $138m others & others 0 2008 Operating Non- Tax and 2009 Profit operating Others items Slide 16

  17. Slide 17: The Parent Airline FY2008-09 Results

    THE PARENT AIRLINE FY2008-09 RESULTS

  18. Slide 18: The Parent Airline Company Results – FY2008/09

    THE PARENT AIRLINE COMPANY RESULTS – FY2008/09 ($ million) 2008-09 2007-08 % Change Total Revenue 13,049.5 12,759.6 + 2.3 Total Expenditure (12,226.6) (11,115.6) + 10.0 - Fuel Cost (5,043.1) (4,240.3) + 18.9 - Fuel Hedging (Loss)/Gain (306.3) 185.4 n.m. - Ex-fuel Cost (6,877.2) (7,060.7) - 2.6 Opera

  19. Slide 19: Parent Airline Operating Performance – FY2008/09

    THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE – FY2008/09 2008-09 2007-08 % Change Passenger Yield 12.5 12.1 + 3.3 (¢/pkm) Unit Cost 9.2 8.4 + 9.5 (¢/ask) Passenger 73.6 69.4 + 4.2 pts Breakeven Load Factor (%) Slide 19

  20. Slide 20: Parent Airline Operating Performance – Capacity and Traffic

    THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE – FY2008/09 (Billion KM) 130 120 Capacity (ASK) 3.4% 110 100 ASK Passenger 80.3 Carriage (RPK) 90 76.5 PLF 1.5% 80 70 Pax. Load RPK Factor (%) 3.8% pts 0 2008 2009 Slide 20

  21. Slide 21: Parent Airline Operating Performance – Load Factors

    THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE – FY2008/09 2008-09 2007-08 % Change Passenger Load 76.5 80.3 – 3.8 pts Factor (%) Passenger 73.6 69.4 + 4.2 pts Breakeven Load Factor (%) Passenger Load 2.9 pts 10.9 pts – 8.0 pts Factor Spread (%) Slide 21

  22. Slide 22: Parent Airline Passenger and Breakeven Load Factor Trend

    THE PARENT AIRLINE COMPANY OPERATING PERFORMANCE – FY2008/09 (%) Passenger Load Factor Breakeven Load Factor 84 80.3 79.2 80 76.5 75.6 76 74.1 6.7 10.9 73.6 2.9 72.5 4.8 72 4.8 70.8 69.3 69.4 68 0 Slide 22 2005 2006 2007 2008 2009

  23. Slide 23: Parent Airline Monthly Passenger-KM

    THE PARENT AIRLINE COMPANY MONTHLY PASSENGER-KM (%) Year-on-Year Percentage Change in PKM 15 10 4.8 5 0 -5 -10 -15 -20 -25 -21.8 -30 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Slide 23

  24. Slide 24: Parent Airline Monthly Passenger Load Factor

    THE PARENT AIRLINE COMPANY MONTHLY PASSENGER LOAD FACTOR (%) 2007-08 2008-09 86 84 82 80.8 79.7 80 78 76 76.4 74 72 70 68 69.4 66 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Slide 24

  25. Slide 25: Parent Airline Cost Composition – FY2008/09

    THE PARENT AIRLINE COMPANY COST COMPOSITION – FY2008/09 Others 17.9% (-3.6% pts) Sales Cost Fuel 5.0% 43.8% (-0.9% pt) (+7.3% pts) Airport Handling 6.8% (-0.1% pt) Staff 12.5% Aircraft (-4.1% pts) Depreciation & Rentals 14.0% (+1.4% pts) Slide 25

  26. Slide 26: Parent Airline Fuel Expenditure

    THE PARENT AIRLINE COMPANY FUEL EXPENDITURE – FY2008/09 ($ million) 5,500 5,349 5,000 -202 +491 +1,294 4,500 +860 4,055 +145 4,000 Higher Higher Weaker Hedging volume weighted US Dollar Losses 3,500 uplifted average Vs Gains fuel price 0 2008 Volume Price Exchange Hedging 2009 Slide 26

  27. Slide 27: Dividends

    DIVIDENDS

  28. Slide 28: Dividends – FY2008/09

    DIVIDENDS – FY2008/09 2008-09 2007-08 Earnings Per Share (¢) 89.6 168.5 Interim Dividend Per Share Paid (¢) 20.0 20.0 Proposed Final Dividend Per Share (¢) 20.0 80.0 Total Ordinary Dividend Per Share (¢) 40.0 100.0 Slide 28

  29. Slide 29: Dividend In-Specie of Shares in SATS

    DIVIDEND IN-SPECIE OF SHARES IN SATS

  30. Slide 30: Objectives

    OBJECTIVES „ Unlock Shareholder Value „ Enable SIA to Concentrate on Airline and Aircraft Maintenance, Repair and Overhaul (MRO) Businesses „ Give SIA Shareholders Direct Interest Without Additional Cash Outlay Slide 30

  31. Slide 31: Unlocking Shareholder Value

    UNLOCKING SHAREHOLDER VALUE „ Boosts SATS public float upwards from less than 20% Ö improve trading liquidity in SATS shares. „ Flexibility to separately manage portfolio holdings of SIA and SATS. „ Benefit directly from any future corporate actions of SATS, for example, dividends, bonus issues and

  32. Slide 32: Rationale

    RATIONALE „ Enables SIA to concentrate on airline and aircraft MRO businesses. 1 SIA share „ SATS increased its exposure to Non-aviation free of businesses. retains cost SATS Revenue1 Non‐ Overseas Up to 0.73 * aviation 28% 1 SIA share 43% SATS shares * Fractional entitlements to be disregarded. 1 P

  33. Slide 33: Continuity of Operations

    CONTINUITY OF OPERATIONS „ New agreements signed on 8 May 2009 provides assurance to SIA that SATS will continue to supply ground handling and in-flight catering services for the next three to five years from 1 October 2009. „ Provide SATS with assurance of revenue from SIA for three to five years f

  34. Slide 34: Financial Effects

    FINANCIAL EFFECTS EPS ROE Gross Gearing 100 89.6 15.0% 15.0% 79.6 12.0% Gearing Ratio (%) 80 12.0% 12.0% 11.0% ROE (%) EPS (cents) 60 9.0% 7.3% 7.0% 9.0% 40 6.0% 6.0% 3.0% 3.0% 20 0.0% 0.0% 0 Before After Before After Before After Distribution Distribution Distribution Distribution Distribution Dist

  35. Slide 35: Approvals

    APPROVALS „ Shareholders’ approval at an extraordinary general meeting; and „ Regulatory approvals1. 1 For further information, please refer to paragraph 5.1.2 of the announcement dated 14 May 2009. Slide 35

  36. Slide 36: Looking Ahead

    LOOKING AHEAD

  37. Slide 37: Looking Ahead – FY2009/10

    LOOKING AHEAD – FY2009/10 „ Fleet Development „ Capital Expenditure „ Outlook Slide 37

  38. Slide 38: Passenger Fleet Development – FY2009/10

    PASSENGER FLEET DEVELOPMENT – FY2009/10 No. of Aircraft Operating Fleet at 1 April 2009 103 Aircraft Deliveries/(Disposals) „ Airbus A380-800 5 „ Airbus A330-300 7 „ Boeing 747-400 (3) Surplus Aircraft (13) Operating Fleet at 31 March 2010 99 Slide 38

  39. Slide 39: Group Capital Expenditure for Next 5 Years

    GROUP CAPITAL EXPENDITURE FOR NEXT 5 YEARS ($ million) FY09/10 FY10/11 FY11/12 FY12/13 FY13/14 Aircraft 1,600 2,800 1,700 2,000 3,700 Other Assets 100 100 100 100 100 Total 1,700 2,900 1,800 2,100 3,800 Slide 39

  40. Slide 40: Outlook – FY2009/10

    OUTLOOK – FY2009/10 „ Drop in Demand for Air Travel „ Outlook – Advance Bookings „ Jet Fuel Prices „ Capacity and Cost Management Slide 40

Singapore Airlines — FY2008-09 Earnings Presentation on 6ix