Aegean Airlines Sa · ATHEX:AEGN
Aegean Airlines Sa — Investor Presentation (June 2007)
39 slides from Aegean Airlines Sa's investor presentation, June 2007
Slide 1: Company Presentation
Company Presentation June 2007
Slide 2: Forward Looking Statements
Forward Looking Statements FORWARD LOOKING STATEMENTS Except for historical information, the statements made or information contained in this presentation are forward-looking in nature and, as such, are subject to certain risks and uncertainties, many of which are beyond the Company’s control, which
Slide 3: Aegean Overview
Aegean Overview
Slide 4: Who We Are
Who We Are Aegean is a Profitable, Dynamic and Innovative Greek Airline with a Leading Market Position Our product: Revenue Breakdown (2006) – Full service carrier since 1999 We fly: Scheduled – To domestic and international destinations Other Passenger 5% 82% – Out of the 3 largest Greek airpor
Slide 5: Our Network
Our Network Extensive Domestic and Growing International Network Domestic (1) International (2) Dusseldorf Kavala Frankfurt Alexandroúpolis Thessaloniki Stuttgart Munich Ioannina Milan Bucharest Kerkyra Sofia Mytilini Chios Rome Thessaloniki Athens Samos Mykonos Athens Kos Heraklion Rhodes Larnaca S
Slide 6: Investment Case Summary
Investment Case Summary Sustained Profitable Growth: A Compelling Shareholder Value Proposition Highlights Strategy Attractive Market Focused International Expansion Leading Domestic Market Position Fleet Renewal Quality Product Offering Results Strong Brand Recognition in Greece Enhance Domestic Le
Slide 7: Greek Market Offers Attractive Growth
Greek Market Offers Attractive Growth Well Positioned to Exploit Growth in Domestic and International Passenger Traffic Historic Passenger Growth GDP Growth AIA passenger traffic is up 10% in Q1 2007 5% 4.1% 4% 3.5% 3.2% 3.0% 3% 35 CAGR : 4.9% 2% 32.7 2.7% 30.8 2.2% 2.1% 2.1% 29.7 1% 30 0% 25 14.8
Slide 8: Athens International Airport
Athens International Airport AIA is Modern and Functional but is Among the Most Expensive Airports in the World Good growth at AIA despite high airport charges High airport charges have disproportionate effect on short stage length domestic routes Airlines operating out of AIA have been lobbyi
Slide 9: Leading Domestic Market Position
Leading Domestic Market Position Aegean Has Developed A Leading Domestic Position In Greece Domestic Market Share Dynamic Development – Propensity to Travel % of Greek population surveyed that has used the airline for a domestic 60% flight in… 100% 89.1% 50% 80% 60% 53.5% 50.2% 50.3% 40% 40% 20% 30%
Slide 10: Substantial Market Share at Key Airports
Substantial Market Share at Key Airports Established Positions at Main Airports Aegean at AIA Aegean at Heraklion 25% 20% Market Share 15% by PAX 20% 10% Market Share by PAX 5% 15% 2001 2002 2003 2004 2005 2006 Aegean at Thessaloniki 10% 40% Market Share 35% by PAX 30% 5% 2001 2002 2003 2004 2005 20
Slide 11: Quality Product Offering
Quality Product Offering Premium Level of Service Increases Brand Awareness and Customer Loyalty Aegean Services History of Punctuality at AIA First to introduce Business Class in domestic market 100% Loyalty programme E-services / web check-in 90% Awards 80% 70% Lufthansa Partnership Aegean A
Slide 12: Strong Positive Image and Brand Association in Greece
Strong Positive Image and Brand Association in Greece Despite its Short Operating History, Aegean has Developed a Strong Brand in Greece Unprompted Awareness AIA Passengers’ Favorite Airline (Q1 2007)(1) Iberia 7% Greek Residents Cyprus 8% Aegean Airlines 43% Olympic Airlines 24% Easyjet 8% Lufthans
Slide 13: Lean Cost Structure
Lean Cost Structure Lean Cost Structure LTM EBITDAR Margin LTM Personnel Costs 40% 35% Including Handling Excluding Handling 30% 29% 29% 30% 27% 30% 26% 25% Personnel Costs / Total Revenue 25% 23% 19% 20% EBITDAR Margin 20% 18% 17% 16% 16% 16% 16% 16% 15% 14% 12% 12% 13% 12% 11% 4% 11% 11% 11% 10% 1
Slide 14: Proven Track Record
Proven Track Record Management Team with Proven Track Record of Growth and Success Against Competition 2003 2005 First Year of Airbus A320 Positive Net Re-Fleeting Income before 2005 Order tax 2003 Lufthansa 2001 LCCs enter Regional 5.0 Partner Merger Greek Agreement 4.45 with 2002–2003 internationa
Slide 15: Strategy
Strategy Established Strategy Focused on Generating Shareholder Value Highlights Strategy Attractive Market Focused International Expansion Leading Domestic Market Position Fleet Renewal Quality Product Offering Results Strong Brand Recognition in Greece Enhance Domestic Leadership Position Lean Cos
Slide 16: Focused International Expansion
Focused International Expansion Leverage Brand Strength in Home Market to Accelerate International Growth Expansion Criteria Potential International Expansion Strategy Destinations within 4 hour flight radius Moscow Balance of traffic originating in Greece Manchester Amsterdam Warsaw High shar
Slide 17: Fleet Evolution and Renewal
Fleet Evolution and Renewal Fleet Modernisation and Expansion 2007 to 2010 Total Fleet Size at Summer Peak Airbus British Average Total Boeing A-320 Aerospace Number Number of 737-300/400 Family RJ-100 Turboprops Total of Seats Seats 2006 15 ― 6 ― 21 134 2,814 2007 15 3 6 ― 24 142* 3,408 2008 9 / 10
Slide 18: Benefits of Fleet Renewal
Benefits of Fleet Renewal Aegean Expects To Realise Significant Benefits From a New, Homogeneous Fleet Anticipated Average Aegean Fleet Age 9 Improved customer appeal / product appearance 12.0 9 Business class product upgrade 9 Improved fuel efficiency and range 8.0 9 Increased capacity / flight Yea
Slide 19: Enhance Domestic Leadership Position
Enhance Domestic Leadership Position Focused Domestic Growth Strategy to Stimulate Demand and Maximise Profitability Illustrative Pricing Policy - Domestic (Thessaloniki) Enhanced Product Offering & Awareness Web check-in Advertising C 140 Y 112 M 101 Pricing Class K 80 X 59 V 40 Self check-in New F
Slide 20: Reduce Distribution Costs
Reduce Distribution Costs Distribution Costs are Expected to Decrease Going Forward Direct Bookings Evolution of Web Bookings 40% 40% 36% % of Total Segments % of Total Segments Agents 30% 30% Individuals 14% 19% 20% 37% 20% 31% 7% 26% 28% 9% 10% 10% 4% 22% 3% 13% 1% 3% 6% 0% 0% 2004 2005 2006 Q1 20
Slide 21: Financial Results
Financial Results Proven Business Model that has Consistently Generated Shareholder Value Highlights Strategy Attractive Market Focused International Expansion Leading Domestic Market Position Fleet Renewal Quality Product Offering Results Strong Brand Recognition in Greece Enhance Domestic Leadersh
Slide 22: Summary of Financial Performance
Summary of Financial Performance Strong Track Record of Revenue Growth and Profitability (€mm) 2004 2005 2006 CAGR Passenger Revenue 249.3 299.0 350.3 18.5% Other Revenue 37.3 43.4 51.9 17.9% Total Revenues 286.6 342.4 402.2 18.5% Operating Costs (excl. depreciation & 252.6 289.3 332.3 14.7% lease e
Slide 23: Operating Cost Summary
Operating Cost Summary Growth Achieved with Tight Cost Control (€mm) 2004 2005 2006 CAGR Personnel 43.5 48.3 54.7 12.1% % Revenue 15.2% 14.1% 13.6% Fuel 47.4 63.7 79.2 29.2% % Revenue 16.6% 18.6% 19.7% Maintenance 35.8 38.1 40.9 6.9% % Revenue 12.5% 11.1% 10.2% Distribution 28.6 33.0 34.7 10.1% % Re
Slide 24: Summary of Cash Flows
Summary of Cash Flows History of Strong Cash Flow Generation (€mm) 2004 2005 2006 Profit (loss) of the period(1) (3.6) 15.0 26.7 Adjustments for depreciation, taxes, 19.5 16.7 31.0 change in working capital etc. Net cash flows from operating activities 16.0 31.8 57.7 Net cash flows from investing ac
Slide 25: Revenue Growth and Net Income Margin
Revenue Growth and Net Income Margin Strong Growth and Profitability Relative to Peers Revenue Growth (2004 - 2006) 40% Revenue CAGR (2004 - 2006) 70% 66% 30% 20% 31% 10% 23% 22% 18% 10% 9% 9% 7% 7% 7% N/A 6% 0% 2% vueling Lufthansa Iberia easyJet Ryanair Finnair SkyEurope Air Berlin Aegean Air Fran
Slide 26: Summary of Operating Statistics
Summary of Operating Statistics Operations Improving in Terms of Breath and Efficiency 2004 2005 2006 Passengers (mm) 3.58 4.01 4.45 Load Factor (Scheduled Flights) 61% 69% 70% Passengers / Flight 78 88 92 Revenue / ASK (€ cents) 7.8 9.2 10.0 Average Fare (€)(1) €67.0 €71.9 €75.6 Note: (1) Scheduled
Slide 27: Summary of Financial Performance – Q1 2007
Summary of Financial Performance – Q1 2007 Strong Growth Continued in Q1 2007 (€mm) Q1 2006 Q1 2007 Gross Revenues 64.0 80.3 % Growth -- 25.3% EBITDAR(1) (0.4) 5.8 EBITDAR Margin (0.7%) 7.2% EBITDA (5.7) (1.6) EBITDA Margin (8.9%) (2.0%) EBIT (7.2) (2.6) EBT (8.6) (3.8) Net Income (6.4) (2.6) Note:
Slide 28: Summary of Operating Statistics – Q1 2007
Summary of Operating Statistics – Q1 2007 Operations Improving in Terms of Breadth and Efficiency Q1 2006 Q1 2007 Passengers (mm) 0.78 0.96 Load Factor (Scheduled Flights) 65% 66% Passengers / Flight 83 88 Average Fare (€)(1) €69.9 €71.0 Note: (1) Scheduled services average fare derived from schedul
Slide 29: Investment Programme / Dividend Policy
Investment Programme / Dividend Policy Focused Expansion Programme with Clear Use of Proceeds Fleet renewal programme over next 3 years – value of aircraft to be added to the fleet to exceed $1 billion Anticipated equity requirement for fleet of c.€60-70 million from IPO proceeds IPO proceeds
Slide 30: Appendix
Appendix
Slide 31: Average Stage Length
Average Stage Length The Average Aegean Segment is Shorter than any of its Peer Group 3,500 3,000 2,500 2,000 (km) 1,500 3,139 2,703 1,000 2,111 1,965 1,942 1,209 1,091 500 1,029 989 980 921 588 0 Ryanair Lufthansa Finnair SkyEurope Easyjet Vueling Aegean AF-KLM Air Berlin BA SAS Iberia Note: Averag
Slide 32: CASK vs. Stage Length – Illustrative Example
CASK vs. Stage Length – Illustrative Example Despite Our Short Stage Length, Aegean Compares Favourably to Other Full Service Carriers 12.0 737-300 (310 km) 10.0 8.0 CASK (cents) 6.0 737-300 (1,250 km) 737-300 (2,100 km) 4.0 2.0 0.0 250 750 1,250 1,750 2,250 2,750 3,250 Average Stage Length (km) LCC
Slide 33: International Performance – Thessaloniki Routes
International Performance – Thessaloniki Routes Established and Growing Market Share on Key German Routes Düsseldorf / Stuttgart Frankfurt Munich Cologne 80% Market Share 60% 40% 20% 0% Competitors Other German Charters 33 Source: Company.
Slide 34: International Performance – Athens Routes
International Performance – Athens Routes Strong Momentum In a Number of Key Routes Rome / FCO Milan MXP and Larnaca Sofia Bucharest LIN Route Opened Route Opened 80% Jul. ‘06 Nov. ‘06 Market Share 60% 40% 20% 0% 2006 2006 2006 YTD 2007 YTD 2007 Competitors 34 Source: Company.
Slide 35: Partnership
Partnership The Lufthansa Partnership is a Vote of Confidence for Aegean’s Level of Service Benefits Hamburg Amsterdam 9 Generates additional passenger traffic from Brussels Hannover Berlin Paris Düsseldorf Lufthansa network, especially business traffic Frankfurt Stuttgart 9 Improves attractiveness
Slide 36: Summary Financials – Income Statement
Summary Financials – Income Statement Year ended December 31, (€ millions) 2004 2005 2006 Income statement data: Revenues 283.5 340.6 401.1 Other operating income 3.1 1.8 1.1 Total Revenues 286.6 342.4 402.2 Personnel expenses (43.5) (48.3) (54.7) Depreciation and Amortization (6.2) (6.6) (6.2) Expe
Slide 37: Summary Financials – Balance Sheet
Summary Financials – Balance Sheet Year ended December 31, (€ millions) 2004 2005 2006 Current assets Cash and cash equivalents 3.8 7.6 24.4 Other current assets 41.8 44.8 70.6 Total current assets 45.6 52.4 95.0 Non-current assets Tangible fixed assets 65.6 61.9 26.5 Other non-current assets 18.9 1
Slide 38: Summary Financials – Cash Flow Statement
Summary Financials –Cash Flow Statement Year ended December 31 In € millions 2004 2005 2006 Cash flows from operating activities Profit (loss) of the period -3.6 15.0 26.7 Adjustments for: Taxes 8.5 7.9 9.8 Losses from sale of affiliates 0.0 0.0 3.0 Depreciation of tangible assets 5.9 6.2 5.9 Intere
Slide 39: Summary of Financial Performance – Operating Statistics
Summary of Financial Performance – Operating Statistics Year ended December 31, 2004 2005 2006 Capacity: Number of aircraft (at period end) 19 18 21 Average number of aircraft in operation 18.0 18.2 20.0 ASKs (in millions) 3,692.3 3,717.1 4,024.5 Total Block Hours 56,501 55,708 60,077 Total Sectors