Upload
tam
View
213
Download
2
Embed Size (px)
Citation preview
2
Information and ProjectionThis notice may contain estimates for future events. These estimates merely reflect the expectations of the Company’s management, and involve risks and uncertainties. The Company is not responsible for investment operations or decisions taken based on information contained in this communication. These estimates are subject to changes without prior notice.
This material has been prepared by TAM S.A. (“TAM“ or the “Company”) includes certain forward-looking statements that are based principally on TAM’s current expectations and on projections of future events and financial trends that currently affect or might affect TAM’s business, and are not guarantees of future performance. They are based on management’s expectations that involve a number of business risks and uncertainties, any of each could cause actual financial condition and results of operations to differ materially from those set out in TAM’s forward-looking statements. TAM undertakes no obligation to publicly update or revise any forwardlooking statements.
This material is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Likewise it does not give and should not be treated as giving investment advice. It has no regard to the specific investment objectives, financial situation or particular needs of any recipient. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment.
3
2007 was a year of many challenges
Macro Economy
Airline Industry
Airlines Brazil
TAM
High volatility (e.g. subprime crisis)
Fuel prices Scarcity of aircraft, seats, etc due to
overall growth in the sector Conclusion of the “Varig” questionmark Changes in the governing structure of
the industry Collapse of BRA
Impact of infrastructure on operations Accident
4
Previousperiod
Currentperiod
J F MAM J J A S ON D J F MAM J J A S ON D J F MAM J J A S ON D J F M80859095
100105110115120125130
Domestic Market - Variation(vs previous period)
The domestic market growth reached 12% in 2007 and 13.7% in March 2008
2007
2005
2006
2008
Source: ANAC
Accum. market growth 2006
12%
Accum. market growth 2005
19%
Accum. market growth 2007
12%
Accum. market growth 2008
9.4%
5
The international market (among Brazilian carriers) is recuperating, and grew 39% in March 2008
Previousperiod
MarketTAM
J F MAM J J A S OND J F MAM J J A S OND J F MAM J J A S OND J F M406080
100120140160180
200
International Market - Variation(vs previous period)
2007
2005
2006
2008
Source: ANAC
Accum. Marketgrowth 2008
52%
Acum TAM 200641%
Acum TAM 2007 71%
Acum TAM 200540%
Acum TAM 2008 63%
Accum. market growth 2005
7% Accum. market decrease 2006
30%Accum. market decrease 2007
5%
6
We are both domestic and international market leaders
33,0%35,8%
48,0% 48,9% 51,4%
43,5%
2003 2004 2005 2006 2007 mar/08
Domestic Market Share*
Source: ANAC* RPK – Revenue passenger kilometer
12,0% 14,3%
37,5%
67,5% 68,9%
18,8%
2003 2004 2005 2006 2007 mar/08
International Market Share* – Among Brazilian carriers
7
With higher growth anticipated for Brazilian carriers due to the unbalance in the bilateral agreements
53.3%
46.7%
53.8%
46.2%
71.5%
28.5%
65.0%
35.0%
2004 2005 2006 2007*0
20
40
60
80
100%
% international traffic
Braziliancarriers
Intlcarriers
* estimates
8
We are strengthening our product in the international market through fleet and network Increased widebody fleet plan for the next 10 years,
substituting older aircraft 2 A340s (delivered in 2007) 8 B777-300ERs (4 in 2008, 4 in 2012) 22 A350s (as of 2013) New A330 reducing fleet average age Complete phase-out of F100 (impact on intra South American routes)
Expansion of network through additional destinations and frequencies
New full code share agreements at each major country – United Airlines; Lufthansa; LAN Group and TAP
Focus on South American coverage – integration of TAM Mercosur activities
9
The international operations works as a natural hedge
24%
76%
33%
67%
2006 20070
20
40
60
80
100%
Revenue(Passenger + Cargo)
DomesticInternational
Dollarexchangerate
DomesticInternational
2.138
73%27%
1.771
64%36% Approximately
50% of our costs (including fuel) are exposed to foreign
currencies-17%
ASK proportion
Revenues originated in the
international operations are
expected to reach 45% - 50% until
Dec/2008
10
514486
1,537
5,162
733777
2,130
4,834
2006 2007
7,7008,474
0
2,000
4,000
6,000
8,000
10,000
Gross Revenue (R$ M)
Dom.Pax
Int.Pax
CargoOthers
Domestic passenger revenue decreased 6%
RPK increased 13%ASK increased 17%
International passenger revenue grew 39%
RPK increased 66%ASK increased 80%
Cargo revenue grew 60%Other revenue grew 43%
Our gross revenue increased 10%...
10%
11
...but total RASK decreased 17%...
RASK¹ ²
RASK scheduled domestic²
Domestic Load factor - %
Yield Scheduled Domestic³
RASK scheduled Intl² Intl Load factor - % Yield Scheduled Intl³
Yield Scheduled Intl (cents of USD)³
2007
17.1
15.569.523.4
12.470.517.710.0
2006
20.7
19.972.029.1
16.276.321.310.0
4T07
17.9
16.770.424.9
11.371.015.99.0
R$ Cents
1 Includes charter, cargo and Other revenues, net of taxes2 Net of taxes3 Gross of taxes
4T06
19.3
17.569.726.4
16.673.722.610.6
Year
-17%
-22%-2.5 p.p.
-19%
-23%-5.8 p.p.
-17%0%
Quarter
-7%
-5%0.7 p.p.
-6%
-32%-2.7 p.p.
-30%-15%
VariationYear Quarter
12
CASK excl-fuel
2006 2007
17.8516.57
0
5
10
15
20
Total CASKBR GAAP - R$ cents Variation
-5%
-7%
...while total CASK reduced 7%...
13
...reducing the spread (RASK-CASK) in BR GAAP...
2006 2007
20.717.9 17.1 16.6
05
10152025
RASK/CASK (R$ Cents)
RASKCASK
EBITDARMargin
EBITMargin
Spread
24.7%
13.6%
2.8
15.4%
3.2%
0.6
BR GAAP
14
...and US GAAP...
2006 2007
20.617.5 17.1 16.2
05
10152025
RASK/CASK (R$ Cents)
RASKCASK
EBITDARMargin
EBITMargin
Spread
23.1%
14.9%
3.1
14.6%
5.1%
0.9
US GAAP
15
2006 2007
4.06
0.86
Earnings per shareBR GAAP (R$)
2006 2007
5.40
3.11
Earnings per share US GAAP (R$)
-79%
...reducing our earnings per share
-42%
16
BR GAAP Leasing IncomeTaxes
Others US GAAP
129
497
-1658 469
0
200
400
600
800
Net Profit Reconciliation to US GAAP
44 aircrafts are reclassified as capital
leases as per SFAS nº 13
The main difference between BR and US GAAP is the accounting treatment of aircraft leasing
17
Our balance sheet remains solid R$ million - BRGAAP 2007 2006 2005 2004
Cash 2,607 2,453 995 297
Short-Term Debt 1,005 363 216 204
Long-Term Debt 1,345 895 425 399
Total Debt 2,350 1,258 641 603
Shareholder's Equity 1,492 1,449 760 191
Capitalization 2,837 2,344 1,185 590
Aircraft and flight equipment leases 6,166 5,032 4,389 4,557
Total Debt Adjusted 8,516 6,290 5,030 5,160
Total Capitalization Adjusted 9,003 7,376 5,574 5,147
Debt / Capitalization 83% 54% 54% 102%
Adjusted Debt / Adjusted Capitalization 95% 85% 90% 100%
Adjusted Net Debt / Adjusted Capitalization 66% 52% 72% 94%
18
Brazilian domestic market has high growth potential
Boardings per capita
Boardings per capita, adjusted by GDP per capita at PPP
Source: World Bank Data, Credit Suisse Research as of 2006
Annual Trips / Person
1.70
1.85
2.32
0.62
0.60
0.55
0.50
0.82
Japan
US
Argentina
Chile
Mexico
Russia
Brazil
Germany
100107.3 111.4
117.4100
140.6
157.6
100
121.2
175.4
228.2
256.8
104.9
176.4
112.0
2003 2004 2005 2006 2007
Market’s RPK
GDP
TAM’s RPK
Growth of Brazilian Domestic Market
19
High concentration of passengers in 10 airports
Source: ANAC
% Total Domestic Passengers Boarded
Curitiba
Recife
PortoAlegre
Confins
Salvador
Galeão
Guarulhos
Brasília
Congonhas
Santos Dumont
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
% TAM slots
44%
42%
33%
30%
39%
37%
27%
39%
36%
25%
Important barrier to entry for newcomers
Limited ability for other competitors to grow
10 main airports in Brazil carry 70% of all passenger traffic
TAM has in aggregate ~40% of all slots available in these airports
20
As Brazil becomes “stable”, the leisure segment will become increasingly more important
Leisu
reBu
sines
s
2000 2001 2002 2003 2004 2005 2006 2007
17.9
26.6 27.0 25.228.2
35.439.7
44.4
0
10
20
30
40
50
Domestic Market Passenger Mix (RPK M)
CAGR
11%
22%
Traveling is one of the top “desire” items for consumption
* TAM Estimates
21
We will be expanding our fare bundle strategy for the domestic market in 2008... Addition of extra
features in the segmented bundles
Ability to “sell up” categories Potential for
further revenue increase
Harmonization of the fare bundle strategy to TAM Fidelidade growth
22
...increasing capillarity of sales through our new methods of payments... Launched new methods of payment in May 2007
Payment at lottery stores Approximately 9,000 stores in Brazil Already functioning as bank correspondent
Billing slips Automatic debit Financing for passengers via direct consumer credit with
the main retail banks
Focus on leisure/lower income segments
23
...optimizing the utilization of our aircraft on off peak hours
* Average day in October, 2007
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2350
55
60
65
70
75
80%
Domestic load factor per hour
Off Peak Off Peak Off PeakPeakPeak
24
We are beginning to evaluate new potential business units in the company
TAM Linhas Aéreas
MRO(São Carlos)
Loyalty Program HandlingCargo
Already structured as a business unit with focus in maximizing assets
None or little focus on selling services to third-parties
Not structured as business units
25
Stocks performance since our IPO
www.tam.com.br/ir
-50%
50%
150%
250%
350%
IPOJun/14/2005
Follow-onMar/10/2006
TAMM4 TAMN IBOV DJBR20
Apr/7/2008
149%
103%
90%
13%
26
Maintain the leadership in both domestic and international markets
ASK growth of Domestic 14% International 40%
Average load factor at approximately 70% overall Reduction of 7% in total CASK ex-fuel in BR GAAP yoyThree additional international destinations or frequencies in
2008
Domestic market demand growth from 8% to 12% (in RPK terms)
Guidance 2008
TAM
Market
We have a positive outlook for 2008
27
Our growth plan is supported by a flexible fleet plan
3
14
88
10
418
101
420
104
4
22
110
4
24
113
8
24
115
2007 2008 2009 2010 2011 2012
115123 128
136 141 147
0
50
100
150
Total fleet
B777 MD11 Airbus wide-body Airbus narrow-body F100
Since dec/07 we
are monofleet in
domestic operations