sas ab:s interim report april 29th 2008 a very challenging ...€¦ · ¾scandinavian airlines was...

1

SAS AB:s interim reportApril 29th 2008

2

The airline industry under pressureRecord high fuel prices

Increased competition

Increased overcapacity

Profit warnings

Bankruptcies

Consolidation

EBT bef. non rec Jan-Mar 2008: -973 MSEK

Profit 2008 - Short term profit protection program to secure 2008 result 1.1 billion result effect

Capacity adjustments 11 aircraft + 1 long haul aircraft postponed

1000 FTE´s reduction

Focus on S11 implementation

A very challenging 1st Quarter

Yield pressure

3

GDP Forecasts loweredSlowdown of the economic cycle visible

02

46

810

12

Sweden Norway Denmark Finland Estonia Latvia Lithuania

20072008

GDP change % vs 2007

4

1st Quarter 2008 result

+94611 88712 833Revenues

2008

January-March

2007 Change

Result development

MSEK

-6.8 p.u. -0.8%-7.6%EBT-margin

-879-96-973EBT bef nonrecurring items (cont. operations)

EBT-margin (12 months rolling) 0,7%

EBT margin target 7%

5

Short term measures on top of Strategy 2011 to get us back ”on course”

Secure performance in 2008

Profit 2008 –a step up of program launched in Q4

6

1.1 Billion SEK in total program

• Price adaptations

• Traffic program changes

• Other efficiency measures

Capacity reduction of 11 aircraft as from autumn 2008 + one

postponed intercontinental aircraft

Profit 08 – Decisive cost and capacity measures

Approx 1000 FTE reduction

7

Continued focus on S11 strategy including long term cost program

P08 – Program to secure 2008

Cultural Turnaround

Focus and concentration

Harmonization and development of customer offer

Competitiveness

Profitable growth

8

Customer offer:Punctuality and regularity are improving

Both punctuality and regularity have improved vs last year

Punctuality is still not satisfyingTarget is 90% punctuality

Scandinavian Airlines was one of the most punctual European airlines in 2007 (AEA)

90,0%

92,0%

94,0%

96,0%

98,0%

100,0%

Jan Feb Mar 70,0%

75,0%

80,0%

85,0%

90,0%

Regularity 2007 Regularity 2008

Punctuality 2007 Punctuality 2008

Scandinavian AirlinesRegularity Punctuality

Gunilla BergCFO

10

Underlying result with negative trend

50050Q400 effects

-8113150ECA/bmi

-573

300

-973

2008

January-March

-37

-

-94

2007

-610

+300

-879

ChangeMSEK

Underlying result development

Easter

Income before nonrecurring items in

continuing operations

Reasons for result development

•Rapidly increased fuel prices to

record levels

•Increased competition

•Increased overcapacity

Yield pressure

11

Scandinavian Airlines affected by yield pressure and record oil prices

ChangeQ1 2008ChangeQ1 2008ChangeQ1 2008ChangeQ1 2008Results

+4.2 p.u.-8.4%-10.9 p.u.-3.3%-4.3 p.u.-4.3%-12.4 p.u.-6.0%EBIT margin

-151

SAS International

-233-192

SAS Norge

-125

SAS Danmark SAS SverigeScandinavian Airlines

-126 -69 +54-387EBIT before nonrec. (MSEK)

SAS International

SAS Sverige

SAS Danmark

SAS Norge

EBIT-margins, 12 months rolling

1.2%

4.5%

2.6%

4.8%

12

Mixed development for other group companies

-3.2%-53SGS

1.7%

-5.3%

-2.9%

5.6%

4.5%

EBIT Margin,

12 months rolling

Change vs.

last yearEBIT SubsidiaryBusiness Area

4

25

-107

2

10

SAS Cargo

STSSAS Aviation Services

SAS Individually Branded

Airlines

airBaltic

Blue1

Widerøe

1st Quarter

13

Fuel cost SEK 0,4 bn higher in the 1st Quarter- Expected to be appr SEK 10.7 bn in 2008 at current market levels

Fuel prices at all time high

More challenging but strategy intactHedging 40-60% of expected consumption (12 months rolling)Yield management Cost initiatives

Current hedges42% of the consumption hedged for 2008

– Of which appr. 10 p.u. with swaps– Of which appr. 22 p.u. with options– Remaining with 3-ways

0

200

400

600

800

1000

1200

1400

2003

-01-0

2

2003

-03-0

2

2003

-05-0

2

2003

-07-0

2

2003

-09-0

2

2003

-11-0

2

2004

-01-0

2

2004

-03-0

2

2004

-05-0

2

2004

-07-0

2

2004

-09-0

2

2004

-11-0

2

2005

-01-0

2

2005

-03-0

2

2005

-05-0

2

2005

-07-0

2

2005

-09-0

2

2005

-11-0

2

2006

-01-0

2

2006

-03-0

2

2006

-05-0

2

2006

-07-0

2

2006

-09-0

2

2006

-11-0

2

2007

-01-0

2

2007

-03-0

2

2007

-05-0

2

2007

-07-0

2

2007

-09-0

2

2007

-11-0

2

2008

-01-0

2

2008

-03-0

2

USD

/ To

n

14

MSEK 2008

Price adaptations 400-500

Changes in traffic program 250

Reduction regarding overhead admin and sales 150

Other activities 250

Total 1050-1150

Capacity reduction

11 aircraft

Distribution of Profit 2008

Traffic program changes

ASK: 6-7% vs.plan

+

15

Implemented

Gap vs. Plan

Remaining40% 44%

16%

0100200300400500600700800900

Procurement

Central a

dm.

Flight o

peratio

nalSales/adm

.

Ground/Technical

Remaining

Implemented

Structural cost program of SEK 2,8 bn by 2009– Despite several developments (NDP e.g.) in Q1, still

behind plan (as communicated in Q4)

Main reasons behind plan– Productivity– SGS

Cost GAP after this program 2010 onwards

Structural measures of SEK 2.8 bn being implemented, but still behind plan

16

Solid liquidity of MSEK 8 002

Available credit facilities of MSEK 5 990

Financial covenants unsecured

facilities (SEK 4.5 bn) linked to

earnings/ leverage and liquidity

Current performance provide good

headroom vs covenants

Interest bearing liabilities reduced by SEK

2.4 bn vs March 2007

Financial net debt 1,1 SEK billion

No financial covenants on gross debt

14 SEK billion in available funds

0%

50%

100%

150%

200%

250%

300%

350%

dec-98 mar-03 jun-04 sep-05 dec-07 mar-08

Fin. Net Debt + 7*Op lease / Equity

17

Maturity of SEK 4 bn in June 2008

Limited maturity in 2009 (500MSEK)

MUSD 729 in aircraft CAPEX in 2008-2010

B 737 2008 deliveries to be placed

on operating leases

CRJ/ Q400- strong interest from:

Export Credit Agencies

Commercial banks

Operating lease market

Limited interest bearing maturities after June 2008

2 700

450

850

350100 100

1 100

4 400

800

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

2008 2009 2010 2011 2012 2013 2014 2015 >2016Apr-Dec

In progress

New standby facility with aircraft as security of SEK 1 billion

18

Sum up 1st Quarter

MarketMarketChallenging time in the industryRapid increase of fuel prices to new records Increased overcapacity/ competition => Weaker yields

Challenging time in the industryRapid increase of fuel prices to new records Increased overcapacity/ competition => Weaker yields

Strategy 2011Strategy 2011

11 aircraft will be taken outCapacity reduced by 6-7%1.1 SEK billion result effectRedundancy 1000 FTE`S

11 aircraft will be taken outCapacity reduced by 6-7%1.1 SEK billion result effectRedundancy 1000 FTE`S

2,8 SEK billion cost programCultural turnaroundCustomer focus –product and quality improvements

2,8 SEK billion cost programCultural turnaroundCustomer focus –product and quality improvements

Profit 2008

20

Appendices

21

0

200

400

600

800

1000

1200

1400

Q2 Q3 Q4 2008

Profit 2008

• Measures to continue throughout 2008

• Similar impact in Q2 and Q3

• Largest impact in Q4 as aircraft will be grounded

• Fuel price development important in short term

Profit 2008, earning´s impact in Q2-Q4

22

Focusing and concentration

Status:

Keep internal, pending cost reductions of MSEK 400 and

quality targets within 18 months.

If targets not reached: Outsourcing/ Seek external partner

SGS

In process, many interested partiesBMI

In processAir/Baltic/Estonian

Decision to sell cargo handling (Spirit)SAS Cargo

Bids received – expecting closing 1st half 2008Spanair

Decision to outsource B737 – classic heavy maintenanceSTS

23

Detailed follow up of

implementation of P 08 established

Contingent measures available if

necessary

Capacity can be adjusted up/down

depending on how demand is

developing

- Flexibility in wet lease

agreements

Follow up of profit 2008 and potentially further short term measures

24

Very satisfying settlementMore than SEK 1 billion in financial compensation from

Bombardier and Goodrich– Cash and credits

New aircraft order– Firm order of 27 CRJ 900 NextGen (13) and Q400 NextGen (14)

– Option for 24 aircraft (17 CRJ900 NextGen and 7 Q400 NextGen)

Milestone in SAS Group’s fleet renewal– Speedy delivery, starting autumn 2008 – 2011

– Rejuvenates regional network fleet

– Differentiated premium product for CPH feeder network

– New and upgraded Q400s for Widerøe and airBaltic

25

More streamlined group structure after sale of Flight Academy and Newco

Scandinavian Airlines Norge

Scandinavian Airlines Danmark

Scandinavian Airlines Sverige

Scandinavian Airlines International

Spanair

Widerøe

Blue1

airBaltic

SAS Ground Services

SAS Technical Services

SAS Cargo

Strategic affiliated company: Estonian Air

*

*) Discontinued Business

26

Increasing number of passengers- Focus to improve the load factor

26 000 000

27 000 000

28 000 000

29 000 000

30 000 000

31 000 000

32 000 000

jan-05

may-05

sep-0

5

jan-06

may-06

sep-0

6

jan-07

may 20

07se

p-07

jan-08

62,0%

64,0%

66,0%

68,0%

70,0%

72,0%

74,0%

Number of passengers (12 months rolling) Passenger load factor (12 months rolling)

Record number of passengers since April 2005

27

SAS Aviation Services

SAS Scandinavian Airlines SAS Individually Branded Airlines

Revenues (SEK bn)

9,1 9,8

0

5

10

15

Jan- Mar 07 Jan - Mar 08

Revenues (SEK bn)

1,6 1,80

5

Jan-Mar 07 Jan-Mar 08

Revenues (SEK bn)

3,4 3,7

0

5

Jan-Mar 07 Jan-Mar 08

Group Revenue distribution

Revenues growing the airline business areasRevenues growing in the airline business areas

28

SAS Group’s seasonal pattern

SAS Group Revenues (per month)

jan feb mar apr maj jun jul aug sep okt nov dec

2005

2006

2007

2008

29

Weaker Quarter due to Q400 problems and lower yield

593 558619

783

513

40

-1043

-94

-1 500

-1 000

-500

0

500

1 000

Q1 Q2 Q3 Q4

2006 2007 2008

MSEK, EBT before gains and nonrecurring items

30

Strong growth in the Baltic

-15

-5

5

15

25

35

45

airBaltic SASInternational

SAS Norway SAS Group SAS Sweden Wideroe SASDenmark

Blue1

Passenger growth in 2008 vs 2007

7.3 million passengers in 2008

(%)

31

Jet fuel prices

7122007

674718

Q2 2007Q3 2007

593Q1 2007

867949

Q4 2007Q1 2008

651

568

399

282

233

245

297

USD/MTYear

2002

2003

2005

2004

2006

2001

2000

Average market prices on high jet fuel (2000-2008)

0

200

400

600

800

1 000

1 200

1 400

jan-03

maj-03

sep-0

3jan

-04maj-

04se

p-04

jan-05

maj-05

sep-0

5jan

-06maj-

06se

p-06

jan-07

maj-07

sep-0

7jan

-08

32

Overview of the SAS Group’s fuel hedging and expected cost 2008

8%82710%8%Swaps

800

5%

702

881

22%

Q3 2008

Price, USD/MT

3-Way

Price, USD/MT

Strike price, USD/MT

Options

13%

827

30%

Q4 2008

773706

Q1 2008Q2 2008

781

16%

883713

23%14%

SEK 11.4 bnSEK 10.7 bnSEK 10.0 bn1 200 USD/MT

SEK 9.7 bn

SEK 8.7 bn

6.00 SEK/USD

1 000 USD/MT

800 USD/MT

Market price

SEK 10.3 bn

SEK 9.2 bn

6.50 SEK/USD5.50 SEK/USD

SEK 9.1 bn

SEK 8.1 bn

SAS Group’s jet fuel costs in 2008 (annual average values,)*

SAS Group’s jet fuel hedging portfolio

*)Spanair excluded

33

Business areas

SAS Scandinavian Airlines

35

Weak Q1 due to costs for Q400 and lower yield

-454

-452

-553

+4

-1

-555

-42

-598

-1 301

+704

Change

-13

-15

93

0

-243

335

- 548

884

- 8 253

9 137

Jan-Mar 2007

(MSEK)

-467

-467

-460

4

- 244

-220

-506

286

- 9 554

9 841

Jan-Mar 2008

(MSEK)

EBITDA

EBITDAR


EBT before nonrecurring items

EBIT

Income from sales/affiliated

Depreciation

EBT

Lease

Operating expenses

Revenues

36

EBITDAR in 1st Quarter MSEK 286

EBITDAR, SAS Scandinavian Airlines (MSEK)

-500

0

500

1 000

1 500

2 000

Q1 Q2 Q3 Q4

2002 2003 2004 2005 2006 2007 2008

37

Result development in SAS Scandinavian Airlines affected by Q400 incidents

-600-400-200

0200400600800

Q42005

Q12006

Q22006

Q32006

Q42006

Q12007

Q22007

Q32007

Q42007

Q12008

SAS Danmark

-200

0

200

400

600

800

1 000

1 200

Q42005

Q12006

Q22006

Q32006

Q42006

Q12007

Q22007

Q32007

Q42007

Q12008

SAS Norge

-300-200-100

0100200300400

Q42005

Q12006

Q22006

Q32006

Q42006

Q12007

Q22007

Q32007

Q42007

Q12008

SAS International

-400-200

0200400600800

1 000

Q4 200

5Q1 2

006

Q2 200

6Q3 2

006

Q4 200

6Q1 2

007

Q2 200

7Q3 2

007

Q4 200

7Q1 2

008

SAS Sverige

EBIT before nonrecurring items (12 months rolling)

38

Lower yield and load factor, but positive development on intercontinental routes

-125

37

2 913

Jan-Mar

SAS Danmark

-126

+136

+310

Change

-232

-238

-53

Change

-69

63

2 101

Jan-Mar

SAS Sweden

-54

-47

+200

Change

-151

12

1 794

Jan-Mar

SAS International

-192

53

3 197

Jan-Mar

SAS Norge

-387

-397

+133

Change

SK Results

EBIT before nonrecurring items

(MSEK)

EBITDAR

Total Revenues

SAS Norge Jan-Mar 2008Weak yield in Q1

– No of pass up 4.6%– Cabin factor up 1.5 p.u. to 66.2%– Yield down 11.7%– Unit cost up 9.5%

SAS Norge Jan-Mar 2008Weak yield in Q1

– No of pass up 4.6%– Cabin factor up 1.5 p.u. to 66.2%– Yield down 11.7%– Unit cost up 9.5%

SAS Danmark Jan-Mar 2008Yield and load factor down

– No of pass down 1.4%– Cabin factor down 2.5 p.u. to 62.6%– Yield down 5.7%– Unit cost down 6.1%

SAS Danmark Jan-Mar 2008Yield and load factor down

– No of pass down 1.4%– Cabin factor down 2.5 p.u. to 62.6%– Yield down 5.7%– Unit cost down 6.1%

SAS Sverige Jan-Mar 2008Weak load and yield in Q1

– No of pass up 0.9%– Cabin factor down 4.1 p.u. to 64.7%– Yield down13.3%– Unit cost up 3.6%

SAS Sverige Jan-Mar 2008Weak load and yield in Q1

– No of pass up 0.9%– Cabin factor down 4.1 p.u. to 64.7%– Yield down13.3%– Unit cost up 3.6%

SAS International Jan-Mar 2008Improved yield and load in Q1

– Cabin factor at 82.9%– Yield up 5.7%– Unit cost up 4.3%

SAS Business Sleeper installed

SAS International Jan-Mar 2008Improved yield and load in Q1

– Cabin factor at 82.9%– Yield up 5.7%– Unit cost up 4.3%

SAS Business Sleeper installed

39

Key ratios in the 1st Quarter 2008

Traffic (RPK)Traffic (RPK)

Cabin FactorCabin Factor

Yields (RPK)Yields (RPK)

RASKRASK

2008 vs 2007 Jan-Mar

-0.2 p.u.

+6.4%

-6.0%

-4.2%

+7.1%

SAS Group

Scandinavian Airlines

Fuel adj. unit costFuel adj. unit cost

40

Yield down 6% in Q1 for Scandinavian Airlines

1

1,1

1,2

1,3

1,4

dec-0

3mar-

04jun

-04se

p-04

dec-0

4mar-

05jun

-05se

p-05

dec-0

5mar-

06jun

-06se

p-06

dec-0

6mar-

07jun

-07se

p-07

dec-0

7mar-

08

12 months rolling average

41

North Atlantic cabin factor above AEADaily departures from Copenhagen to New York, Washington DC, Chicago, Seattle

– San Francisco to be launched

Daily departures from Stockholm to New York and Chicago

Reduction of capacity in the winter season (=low demand)

Traffic development in Jan-Mar 2008– SK traffic down 1.4%

– AEA traffic up 2.7%

%, Cabin factor

65707580859095

Janu

aryMarc

h

May July

September

Novem

ber

Janua

ryMarc

h

May July

Septembe

rNov

ember

Janu

aryMarc

h

May July

Septem

ber

Novem

ber

Janua

ryMarc

h

SAS AEA

42

European routes

Load factors in negatively affected by grounding of Q400, but still in line with AEA

14 new routes out of Oslo as from summer program

Traffic development Jan-Mar 2008:– AEA traffic up 7.7%

– SAS traffic up 6.9%

%, Cabin factor

4550556065707580

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

June

July

Aug

ust

Sep

tem

ber

Oct

ober

Nov

embe

r

Dec

embe

r

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

June

July

Aug

ust

Sep

tem

ber

Oct

ober

Nov

embe

r

Dec

embe

r

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

June

July

Aug

ust

Sep

tem

ber

Oct

ober

Nov

embe

r

Dec

embe

r

Janu

ary

Febr

uary

Mar

ch

SAS AEA

43

60

65

70

75

80

85

90

95

Januar

y

March M

ay

July

September

November

Januar

y

March M

ay

July

September

November

Januar

y

March M

ay

July

September

November

Januar

y

March

SAS AEA

Strong Asian traffic during the winter season

Scandinavian Airlines serving Bangkok, Beijing, Tokyo and Dubai

Stockholm-Bangkok and Copenhagen-Dubai in the winter season

New strategy on China successful

SK passenger load factor above AEA

Traffic development in Jan-Mar 2008:– AEA traffic up 1.3%

– SAS traffic up 11,0% as capacity was increased

during the winter season

%, Cabin factor

SAS Individually Branded Airlines

45

SAS Individually Branded Airlines

+210

+210

-215

-82

-3

-130

-39

-90

+337

+246

Change

38

38

40

12

-42

70

-101

171

- 1 415

1 586

Jan-Mar 2007 (MSEK)

-172

-172

-175

-70

-45

-60

-140

81

- 1 752

1 832

Jan-Mar 2008 (MSEK)

EBITDA

EBITDAR

SAS Individually Branded AirlinesResult


EBIT


Depreciation

EBT

Lease

Operating expenses

Revenues

46

Estonian Air’s growth continues

The SAS Group holds 49% in Estonian Air

Competitive cost position

Estonian Air number of passengers up 13% in Q1

Two wet leased SAAB 340 in operation as from 2nd Half 2007 has enabled Estonian Air to

introduce new destinations

Number of passengers Estonian Air

010 00020 00030 00040 00050 00060 00070 00080 00090 000

DecMar Ju

nSep DecMar Ju

nSep DecMar Ju

nSep DecMar Ju

nSep DecMar Ju

nSep DecMar

12 month rolling Monthly figures

47

Wideröe and airBaltic weaker Blue1 in line with last year

10

76

827

Jan-Mar

Widerøe

-34

-28

+97

Change

+1

-10

+2

Change

2

31

488

Jan-Mar

Blue1

-88

+47

+147

Change

-107

-18

512

Jan-Mar

airBalticSAS Individually Branded Airlines

EBIT before nonrecurring items

Results (MSEK)

EBITDAR

Total Revenues

Widerøe Jan-Mar 2008Result affected by Q400 replacement

No of pass down 0.4%– Cabin factor up 1.8 p.u. to 59.4%– Yield down 7.8%

Widerøe Jan-Mar 2008Result affected by Q400 replacement

No of pass down 0.4%– Cabin factor up 1.8 p.u. to 59.4%– Yield down 7.8%

Blue1 Jan-Mar 2008Result in line with last year although Easter

– No of pass down 12.3%– Cabin factor down 1.2 p.u. to 58.7%– Yield up 6.4%, – Unit cost up 3.1%

Blue1 Jan-Mar 2008Result in line with last year although Easter

– No of pass down 12.3%– Cabin factor down 1.2 p.u. to 58.7%– Yield up 6.4%, – Unit cost up 3.1%

airBaltic Jan-Mar 2008Strong growth, but yield down

– No of pass up 38%– Cabin factor down 0.7 p.u. to 54.6%– Yield down 9.3%

airBaltic Jan-Mar 2008Strong growth, but yield down

– No of pass up 38%– Cabin factor down 0.7 p.u. to 54.6%– Yield down 9.3%

(Spanair, discontinued business)


49


+30

+30

+53

+1

-2

+56

-209

+264

Change

-131

-131

-100

-4

-60

-37

-3 430

3 394

Jan-Mar 2007 (MSEK)

-101

-101

-47

-3

-62

19

-3 639

3 658

Jan-Mar 2008 (MSEK)

EBITDA



EBIT


Depreciation

EBT

Operating expenses

Revenues

50

Breakdown SAS Aviation Services

-56-53+1081 568SAS Ground Services

-49

+97

Change

4

-25

Jan-Mar 2008

EBIT before nonrec. itemsRevenues

ChangeJan-Mar 2008SAS Aviation Services

+26

-106

842

1 262

SAS Cargo

SAS Technical Services

Financial update

52

SAS Group Balance Sheet

5 3235 500Liabilities attributalbe to assets held for sale

6 1986 005Assets for sale

1 231

48 770

17 149

3 755

8 802

13 741

48 770

21 704

11 977

8 891

Dec 31, 2007

16 228Equity

3 729Deferred tax

23 276Other assets

1 534

49 153

8 418

15 278

49 153

11 870

8 002

Mar 31, 2008

Total assets

SAS Group Balance Sheet

Financial net debt

Total liabilities and equity

Interest-bearing liabilities

Operating liabilities

Aircraft, spare parts

Liquid funds

53

SAS Group has more than SEK 14 bn in available funds

-7208 8448 124Liquid Funds

-1631 091928Revolving Credit Facility (MUSD 156)

Available Credit Facilites:

Others

Revolving Credit Facility (MSEK 250)

Bi-lateral Facilities

Revolving Credit Facility (MEUR 366)

15 496

6 652

397

250

1 500

3 414

Mar 07

-6625 990Total Available Facilities

-1 38214 114Total Available Funds

375

0

1 250

3 437

Mar 08

-250

-250

-22

+23

ChangeAvailable Funds MSEK

6 842

190

6 652

+45235Utilized facilities

-6176 225Total facilities

5 990 -662Available facilities:

54

CAPEX

08210CRJ900 Next GEn

77014Q400 Next Gen

407

18

3

2009

128

7

0

2010

194

5

3

2008

729

30

6

Total

Number of Aircraft

CAPEX (MUSD)

Firm Aircraft Orders

Boeing 737

55

SAS Group CAPEX increased in 2009-2010 mainly to replace Q400

p

0

2000

4000

6000

8000

10000

12000

14000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

F20

09F

2010

F

MSE

K

56

Improved financial ratios vs March 2007

23%

166%

22%

32%

Mar 07

>30%24%23%Adjusted equity/assets ratio

<100%142%150%Adjusted gearing

Financial net debt/ equity

Equity/assets ratio (solidity)

Key figures

9%

33%

Mar 08

<50%

Target

7%

35%

Dec 07

57

Amortization profile of interest bearing liabilities

800

4 400

1 100

100100350

850

450

2 700

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

2008 2009 2010 2011 2012 2013 2014 2015 >2016Apr-Dec

58

Financial Net January – March 2008

(MSEK) 08-03-31 07-12-31 Difference

Interest net and others - 89 -271 N/A

Exchange rate differences -12 +13 N/A

Financial net - 101 -258 N/A

59

Financial Net January – March 2008

(MSEK) Q1-2008 Q1-2007 Difference

Interest net and others -89 -117 +28

Exchange rate differences -12 +9 -21

Financial net - 101 -108 +7

60

Development and Break Down of Financial Net Debt

(MSEK) 080331 071231 Difference

Cash 8 124 8 993 -869

Other interest bearing

assets 2 093 1 818 + 275

Interest bearing

liabilities -11 751 -12 042 +291

Financial Net debt -1 534 -1 231 -303

61

Development and Break Down of Financial Net Debt

(MSEK) 080331 070331 Difference

Cash 8 124 8 844 -720

Other interest bearing

assets 2 093 1 580 +513

Interest bearing

liabilities -11 751 -14 101 +2 350

Financial Net debt -1 534 -3 677 +2 143

62

Development of Financial Net Debt January – March 2008

+309Deconsolidation, currency & other

-1 534Financial Net Debt Mar 08

0Sale of subsidiaries, net

-24Cash flow from operating activities

-1 231Financial net debt Dec 07

Investments

Financial Net Debt

-588

Dec 2007

63

Development of the Financial Net Debt, reduced by more than SEK 15bn since peak levels

64

Development of the Equity/Asset ratio

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

19921993 19941995 1996 19971998 199920002001 200220032004 2005 2006 2007

65

Financial Net Debt/Equity ratio development

0,0

0,3

0,5

0,8

1,0

1,3

1,5

1,8

2,0

2,3

2,5

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

66

Gearing ratios improved

-30%

20%

70%

120%

170%

220%

270%

320%

dec-98

dec-99

dec-00

dec-01

dec-02

mar-03

jun-03

sep-03

dec-03

mar-04

jun-04

sep-04

dec-04

mar-05

jun-05

sep-05

dec mar-06

jun-06

sep-06

dec-07

mar-07

jun-08

sep-08

dec-08

mar-08

Fin Net Debt / Equity Equity / Total Assets Fin. Net Debt + 7*Op lease / Equity

67

Credit position sum up

Solid liquidity of MSEK 8 002– Available credit facilities of MSEK 5 990, same level as in December 2007 adjusted for currency

– Enabling SAS to pay off the Euro Medium Term Bond due in 2008

Assets for sale of MSEK 6 005

Interest bearing liabilities down MSEK 291 in Q1

– Amortization of MSEK 199

MUSD 194 in aircraft CAPEX in 2008– MUSD 535 in aircraft CAPEX in 2009-2010 mainly to replace Q400

No financial covenance on debt on the balance sheet

Consolidation of balance sheet will continue coming years

68

APPENDICES

Yield

Unit cost

Fleet

Financial key figures

69

Yield development

-6%131.0123.1Currency adj. yield

128.6

Jan-Mar 2007

123.1

Jan-Mar 2008

-4.7%Yield (öre/RPK)

MSEK Change

Yield, SAS Scandinavian Airlines

-7.8%

-9.3%

+6.4%

Jan-Mar 2008Yield, local currency

Yield, SAS Individually Branded Airlines

70

Improved yield and load factor

40%

50%

60%

70%

80%

03-no

v04

-feb

04-m

aj04

-aug

04-no

v05

-feb

05-m

ay05

-aug

05-no

v06

-feb

may-06

06-au

go6

-nov

07-fe

b07

-maj

07-au

g07

-nov

08-fe

b

1,00

1,05

1,10

1,15

1,20

1,25

1,30

Load factor Yield (12 months rolling)


71

Yield development – SAS Scandinavian Airlines

-20

-15

-10

-5

0

5

10

15

20

Q1vs

2003

Q3 Q1vs

2004

Q3 Q1vs

2005

Q3 Q1vs

2006

Q3 Q1vs

2007

Yields down 9.1% in 2004

Yields down 0.3 in 2005

Yield up 1.2% in Q1 2006






Yield up 2.7 in Q3 2007

Yield up 1.0 in Q4 2007

Yield down 6% Q1 2008

72

Break down of SAS Scandinavian Airlines Unit Cost Jan-Mar 2008

-9 900

-750

-9 150

-1 492

-1 122

-1 285

-127

-912

-1 866

-2 346

Jan-Mar 08

-0,3%-3,2%-775Aircraft costs

1,4%12,3%-999Technical

0,2%1,6%-1 265Ground Services

11,9%

13,3%

29,8%

0,2%

2,0%

29,6%

6,8%

Var %

11,9%

12,2%

3,9%

0,0%

0,2%

4,8%

1,7%

Share of total var%

-8 072TOTAL OPERATING EXPENSES

-1 440Fuel

-2 198Personnel

-127Selling cost

-894Gov. Charges

-8 847ADJUSTED EBIT

-1 150

Jan-Mar 07

Other operating costs

Cost break down

Cost break down, volume, currency and method adjusted SAS Scandinavian Airlines

73

Unit cost significantly up in Q1 due to fuel costs and Q400 wet lease costs

-23%

-18%

-13%

-8%

-3%

2%

7%

12%

1st

Q 2

00

3

2n

d Q

20

03

3rd

Q 2

00

3

4th

Q 2

00

3

1st

Q 2

00

4

2n

d Q

20

04

3rd

Q 2

00

4

4th

Q 2

00

4

1st

Q 2

00

5

2n

d Q

20

05

3rd

Q 2

00

5

4th

Q 2

00

5

1st

Q 2

00

6

2n

d Q

20

06

3rd

Q 2

00

6

4th

Q 2

00

6

1st

Q 2

00

7

2n

d Q

20

07

3rd

Q 2

00

7

4th

Q 2

00

7

1st

Q 2

00

8

SAS Scandinavian Airlines unit cost change

Unit cost down 10.9% in 2004Unit cost down 1.7% in 2005Unit cost up 5.2% in 2006Unit cost up 3,9% in 2007Unit cost up 11,9% in Q1 2008

– Adjusted for fuel, unit cost was up 7,1%– Adjusted for Q400 and fuel unit cost was

up 2.6%

74

Productivity

7918249,46airBaltic

688

411

617

Cabin

hours/year

5638,04SAS Scandinavian Airlines

6438,33Blue1

4406,68Widerøe

Pilots

hours/year

Aircraft

hours/day

12 months rolling

Block hours, 12 months rolling, Apr 07 - Mar 08

75

Key productivity ratios need to improve – SAS Scandinavian Airlines

Aircraft utilization (12 months roling)

5

5,5

6

6,5

7

7,5

8

8,5

DecApr Aug DecApr Aug DecApr Aug DecApr Aug Dec

Cabin, pilot utilization (12 month roling)

420

470

520

570

620

670

Dec Apr Aug Dec Apr Aug Dec Apr Aug Dec Apr Aug Dec

Pilots Cabin crew

76

Self Service check in above 55% Internet check closing 15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

20

02

11

20

03

03

20

03

07

20

03

11

20

04

03

20

04

07

20

04

11

20

05

03

20

05

07

20

05

11

20

06

03

20

06

07

20

06

11

20

07

03

20

07

07

20

07

11

Automat Automat+internet

77

Very weak USD in 2008

6

7

8

9

10

11

12

200320022001200020042005200620072008

78

Currency effect – SAS Group, continuing operationsJanuary-March 2008 vs 2007

73Income before tax

-21Financial items

94

-187

80

201

Jan-Mar 2008

Total costs

Total revenues

Income before depreciation

Forward cover costs & working cap

MSEK

79

Breakdown of currency effect SAS Group, continuing operationsJanuary-March 2008 vs 2007

-21Difference

92007Financial items

272007Working capital

-132008

82007Forward cover costs

-1392008

-9All others

-7Asian currencies

281Total

Total currency effect

Total revenues & costs

Total revenues & costs

83NOK

1EUR

73

-122008

-40

-147

-15

228

Currency effect

DKK

USD

Difference

Difference

80

Currency distribution in the SAS Group 2007 (Spanair included)

Expenses

EUR21%

NOK18%

SEK15%

DKK12%

USD31% GBP

1%

Other2%

Revenues

EUR29%NOK

26%

SEK18%

DKK10%

Other7%

USD7%

GBP3%

81

SAS Group fleet – March 2008

82

SAS share

83

Development of the SAS Group’s Market Capitalization

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

jan-05

maj-05

sep-0

5

jan-06

maj-06

sep-0

6

jan-07

jun-07

okt-0

7

jan-08

0

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

7 000 000

Traded shares Market capitalization

SAS Group market capitalization and trades shares

Marknadsvärde, MSEK Omsättning antal aktierMarket capitalization, MSEK Traded shares, day

84

Weak start in 2008 for airline shares

50,0

60,0

70,0

80,0

90,0

100,0

110,0

dec-07

jan-08

feb-08

Peers SAS

SAS Market Capitalization vs European Peers (SEK)(December 31, 2007 - March 31, 2008)

7 4 ,3

6 6 ,0

85

Number of traded shares

05 000 000

10 000 00015 000 00020 000 00025 000 00030 000 00035 000 00040 000 00045 000 000

Jan

Feb Mar Apr

May Jun Jul

Aug

Sep Oct

Nov

Dec

2005 2006 2007 2008

Strong increase in number of traded shares in 2008

Number of traded shares, SAS Group 2005 –2008

sas ab:s interim report april 29th 2008 a very challenging ...€¦ · ¾scandinavian airlines was...

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