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Conferência Deutsche Bank – Nova York
 

Conferência Deutsche Bank – Nova York

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    Conferência Deutsche Bank – Nova York Conferência Deutsche Bank – Nova York Presentation Transcript

    • Deutsche Bank Conference New York, September 05 & 06, 2007
    • Information and Projection This 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. 2 2
    • TAM is a low cost company with better service at competitive prices Undisputable Better Service Sustainable Strategy to Maintain Market Leadership and Profitability Low Operating Competitive Costs Prices 3 3
    • The domestic market growth still strong in 2007, reaching 13% in the first 7 months of the year Domestic Market - Variation 130 125 120 115 Current 110 period 105 Previous 100 period 95 Accum. market growth Accum. market growth Accum. market growth Accum. market growth 90 2004 2005 2006 2007 85 12% 19% 12% 13% 80 J F M AM J J A S O ND J F M AM J J A S O ND J F M AM J J A S O N D J F M AM J J 2004 2005 2006 2007 Source: ANAC 4 4
    • We have been domestic market leaders since 2003, ending July with 49,3% Domestic Market Share (RPK’s) Domestic Market Share (RPK’s) 49,3% 47,8% 43,5% 35,8% 33,0% 2003 2004 2005 2006 Jan - Jul Domestic Market Share – 2Q07 Domestic Market Share - July/07 Domestic Market Share – 2Q07 Domestic Market Share - July/07 Other Other 5,6% BRA 4,1% BRA 2,7% 3,7% Varig 2,7% Varig 3,8% TAM TAM 49,6% 50,6% GOL GOL 40,1% 36,9% Source: ANAC 5 5
    • The international market (among Brazilian carriers) is recuperating International Market - Variation (vs previous year) 200 Acum TAM 2007 Acum TAM 2006 75% 180 41% Acum TAM 2005 40% 160 TAM Acum. TAM 2004 30% 140 Market 120 Previous 100 period 80 Accum. market growth Accum. market growth 2005 2004 Accum. Accum. market 7% 60 8% market decrease 2007 decrease 2006 24% 30% 40 J F MA M J J A S O ND J F M A M J J A S ON D J F M A M J J A S O N D J F M A M J J 2004 2005 2006 2007 Source: ANAC 6 6
    • Since July 2006, we are international market leaders among the Brazilian companies International Market Share International Market Share 65,6% 37,3% 18,8% 14,3% 12,00% 2003 2004 2005 2006 Jan - Jul International Market Share – 2Q07 International Market Share– July/07 International Market Share – 2Q07 International Market Share– July/07 Other Varig Varig Other 5,8% 14,2% 10,7% 5,2% GOL 13,3% GOL 15,6% TAM 64,3% TAM 70,8% Source: ANAC 7 7
    • In the past 4 years, we have improved every operational metric… 2002 2003 2004 2005 2006 1H07 TAM S.A. No. operating aircraft 102 76 76 81 92 101 No. take-offs (K) 219 147 151 210 245 130 Load Factor 55% 61% 71% 66% 74% 71% - LF Dom 53% 58% 70% 64% 73% 71% - LF Int 61% 71% 71% 73% 76% 70% Market Share Dom 35% 33% 44% 36% 48% 49% 1.02 1.03 MS/CS Domestic 0.94 0.97 0.98 1.00 Aircraft Utilization 9.5 7.6 9.0 11.4 12.7 12.8 (block hrs/day) 6.9 12.4 12.4 - Narrow bodies 9.2 5.8 10.2 - Wide bodies 10.0 7.3 14.2 12.6 15.1 15.7 8 8
    • …resulting in an outstanding improvement in our financial metrics BR GAAP 2002 2003 2004 2005 2006 1H07 Net revenues 3,429 3,667 4,520 5,649 7,345 3,322 EBITDAR 475 775 1,038 1,140 1,817 593 % EBITDAR 13.9% 21.1% 23.0% 20.2% 24.7% 15.6% EBIT (236) (32) 294 426 996 120 % EBIT -6.9% -0.9% 6.5% 7.5% 13.6% 3.2% Net Income (606) 174 342 187 556 31 % Net -17.7% 4.7% 7.6% 3.3% 7.6% 0.8% Income 9 9
    • Total revenue grew 13%... Gross Revenues (R$ M) Domestic passenger revenue decreased of 5% 13% 2,054 RPK growth 21% 2,000 156 1,824 196 154 ASK growth 26% 113 1,500 International passenger revenue 531 329 growth 61% 1,000 RPK growth 83% ASK growth 98% 1,228 1,170 500 Ot her C argo Cargo revenue growth 74% Int. P ax Do m. Other revenue growth 2% P ax 0 2Q06 2Q07 10 10
    • …while total RASK decreased 21.8%, mainly due to the decrease in the domestic yields 2Q06 vs 1Q07 vs 2Q06 vs 1Q07 vs 2Q06 1Q07 2Q07 2Q06 1Q07 2Q07 2Q07 2Q07 2Q07 2Q07 RASK Total1 21.5 16.7 16.8 -21.8% 0.5% RASK Scheduled Domestic2 20.6 14.5 15.3 -26.0% 4.9% LF Scheduled Domestic 74.5 69.4 71.9 -2.6 p.p. 2.5 p.p. Yield Scheduled 29.1 22.0 22.3 -23.6% 1.1% Domestic3 RASK Scheduled International2 15.3 14.1 12.3 -19.6% -12.6% LF Scheduled 74.9 71.3 69.1 -5.8 p.p. -2.2 p.p. International Yield Scheduled 20.4 19.8 17.8 -12.7% -9.9% International3 (em R$) Yield Scheduled 9.4 9.7 9.3 -1.9% -4.0% International3 (em USD) 1 Includes charter, cargo and Other revenues, net of taxes 11 2 Net of taxes 11 3 Gross of taxes
    • Our CASK decreased 11.6% compared to 2Q06 Total CASK (BR GAAP - R$ cents) 2Q06 vs 2Q07 20 18.69 18.43 17.43 16.98 16.52 15.92 15 -11.6% 10 CASK -10.8% 5 ex-fuel 0 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 12 12
    • The decline in CASK was not enough to compensate the RASK, leading to a reduction of our spread… RASK/CASK (R$ Cents) BR GAAP 25 20 RASK CASK 15 2002 2003 2004 2005 2006 1Q07 2Q07 -1.1 -0.2 1.4 1.5 2.8 0.9 0.3 Spread EBIT -7.1% -0.9% 6.5% 7.5% 13.6% 4.8% 1.7% Margin 13 13
    • …reducing our margins in BR GAAP… EBIT Net Income EBITDAR (BR GAAP - R$ M) (BR GAAP - R$ M) (BR GAAP - R$ M) 97 300 500 100 -129% 436 -42% 250 75 400 225 -85% 200 50 300 6% 252 150 25 25% 200 100 0 13% -1% 13% 100 50 -25 33 -29 2% 0 0 -50 2Q06 2Q07 2Q06 2Q07 2Q06 2Q07 Margin over Net Revenue 14 14
    • ...and US GAAP Net Income EBIT EBITDAR (US GAAP - R$ M) (US GAAP - R$ M) (US GAAP - R$ M) 400 300 400 200 -40% 242 250 160 -72% 146 300 -53% 200 239 120 23% 200 150 80 69 100 14% 8% 12% 69 100 40 4% 50 3% 0 0 0 2Q06 2Q07 2Q06 2Q07 2Q06 2Q07 Margin over Net Revenue 15 15
    • The main difference between BR and US GAAP is the accounting treatment of aircraft leasing Net Profit Reconciliation 40 aircrafts are reclassified as 40 aircrafts are reclassified as to US GAAP capital leases as per SFAS nº 13 capital leases as per SFAS nº 13 150 145.8 100 2.3 69.2 -50.3 50 0 -28.6 -50 BR GAAP Leasing Income Others US GAAP Taxes 16 16
    • Our earnings per share decreased Earnings per share Earnings per share US GAAP (R$) BR GAAP (R$) 0.97 -45% 0.64 -130% 0.53 -0.19 2Q06 2Q07 2Q06 2Q07 17 17
    • Even with the appreciation of the Real, revenues in foreign currencies increased proportionally Revenues (Passenger + Cargo) Approximately 50% Approximately 50% 100% 100% 100% of our costs of our costs 100% (including fuel) are (including fuel) are 22% exposed to foreign exposed to foreign 33% 34% 80 currencies currencies 60 40 78% 67% 66% 20 International Domestic 0 2Q06 1Q07 2Q07 Dollar R$ 2.164 R$ 2.050 R$ 1.926 exchange rate 18 18
    • Since our second public share offer, our share had an increase in valuation of 25% Accumulated variation since March 10, 2006 2,0 1,5 1,0 0,5 10-mar-06 31-jul-07 TAMM4 IBOVESPA DOW JONES ADR TAM 19 19
    • Flight 3054 Focus on providing full support to victims’ families, authorities and employees Family Assistance Activation of a company family assistance program Deployment of specialized teams to sites where assistance is needed Establishment of two offices, jointly with Unibanco AIG, in São Paulo and Porto Alegre, for individual services to family members to handle compensation issues Establishment of a website for the exclusive use and safe access by family members Disclosure of information to the public Full cooperation with regulatory and investigative authorities 20 20
    • Structure of legal authorities involved in the industry PRESIDENT CONAC MINISTRY OF National Civil DEFENSE Aviation Council National Civil INFRAERO Aviation Agency Design Design Manufacturing Manufacturing Operations Operations AIR FORCE NAVY ARMY Maintenance Maintenance COMMAND COMMAND COMMAND Licensing Licensing Airports Airports Register Register A&I Facilitation A&I Facilitation CENIPA Investigation Security Investigation Security Accident Investigation Air Services Air Services and Prevention Board Intl. Air Navigation Intl. Air Navigation Ergonomics Ergonomics Human Factors Human Factors DECEA AIR TRAFFIC/ SPACE CONTROL Civil & Military Aircraft Air Traffic Air Traffic Control Control 21 21
    • CONAC announced guidelines for future implementation (1/2) Resolution no. 6, dated July 20, 2007, states that: By ANAC ANAC´s supervisory duties will be enhanced in order to assure unrestricted support to the victim´s family members In 60 days, the take-off and landing rights at Congonhas will be reviewed, restricting them to point-to-point, direct flights New international flights will be allocated outside the São Paulo terminal (Guarulhos and Congonhas) No charter flights are allowed out of Congonhas A permanent contingency plan for aircraft and crew must be established 22 22
    • CONAC announced guidelines for future implementation (2/2) By ANAC and Air Force Command Further restrict the use of Congonhas for General Aviation purposes In 90 days, submit a study on possible locations for a new aiport site in São Paulo By Infraero In 90 days, submit a study for expansion and redesigning of airports in São Paulo Seek clearance from the courts for spaces currently occupied by companiese under bankrupcy or reorganization Promptly adopt redistribution of spaces to permit accomodation of a larger number of passengers at Guarulhos 23 23
    • Our expectations for 2007, disclosed in December 2006, are still the same Guidance 2007 1S07 Market demand growth from 10% to 15% (in RPK 12.6%* Market terms) 49.3%* Average domestic market share above 50% Average domestic load factor at approximately 70% 72.1%* 12.8 Aircraft utilization per day (block hour) higher than 13 hours 9.2% Reduction of 7% in total CASK ex-fuel in BR GAAP yoy TAM Opportunity in the international market Third frequency to Paris Since January • Inauguration of two new international long haul Milan (March), • frequencies Frankfurt and Madrid (December) * Accumulated from January to July 24 24
    • ...maintaining our fleet plan Fleet Plan 150 136 131 6 125 4 3 118 4 20 20 111 4 20 16 15 100 B777 110 107 MD11 50 101 87 98 Airbus wide-body Airbus narrow-body F100 6 0 2007 2008 2009 2010 2011 25 25
    • We continue to pursue our strategy, already with strong deliveries in 2007 Superior Customer Increase Revenues Reduce Costs Service Increased block hours New check-in procedures, Increase in international including higher use of revenues (70% increase Insourcing of stations self check-in totems and with a 88% ASK increase, web check-in in 1S07 vs 1S06) Increased direct website sales (110% increase Additional staff for Increase in international 1S07 vs 1S06) directing passengers cargo (170% increase Ongoing sourcing 1S07 vs 1S06) improvements Zone boarding Initial development of new Optimized GDS costs Revised onboard services customer base with Increased use of popularized methods of New international call technology payment center Increased “dispatchability” with Operational Centre 26 26
    • TAM: continuing to grow, with solid fundamentals Undisputed leader in the domestic and international market Focus on profitability Sustainable and cost reduction competitive advantage Experienced “Best in Class” service management team and brand recognition delivering solid results Outstanding growth history and prospects 27 27
    • 28 28