Upload
tam
View
178
Download
1
Tags:
Embed Size (px)
Citation preview
September, 2008
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
PreviousPeriod
CurrentPeriod
J F MAM J J A SOND J F MAM J J A SOND J F MAM J J A SOND J F MAM J J A80
8590
95100
105110
115120
125130
Domestic Market - Variation(vs previous period)
The domestic market grew 11% from January to August 2008
Source: ANAC
Accum. market growth 2006
12%
Accum. market growth 2005
19%
Accum. market growth 2007
12%
Accum. market growth 2008
11%
20072005 2006 2008
4
PreviousPeriod
Market
TAM
J F MAM J J ASOND J FMAM J J ASOND J F MAM J J ASOND J F MAM J J A40
60
80
100
120
140
160
180
200
International Market - Variation(vs previous period)
The international market (among Brazilian carriers) is recovering and grew 37% …
Source: ANAC
Accum. Marketgrowth 2008
37%
Acum TAM 200641%
Acum TAM 2007 71%
Acum TAM 200540%
Acum TAM 2008 44%
Accum. market growth 2005
7%
Accum. market decrease 2006
30%
Accum. market decrease 2007
5%
20072005 2006 2008
5
…with higher growth anticipated for Brazilian carriers due to the unbalance in the bilateral agreements…
Source: ANAC annual report
* estimates
58.2%
41.8%
57.7%
42.3%
66.9%
33.1%
71.2%
28.8%
69.8%
30.2%
2004 2005 2006 2007 June2008*
0
20
40
60
80
100%
% international passenger
BrazilianCarriers
IntlCarriers
6
…observed in many countries, as the example between Brazil and USA
77
107
147
2821
357
10535
Italy
England
Germany
France
Spain
USA
1414
1414
2121
3030
5151
126*126*
150 100 50 0 50 100 150
Weekly Frequencies
* 21 frequencies limited to the cities in the north, northeast and central west regions of Brazil and/or Belo Horizonte
Brazilian Carriers Foreign Carriers
Available space on bilateral Operated by Brazilian Carriers Operated by Foreign Carriers
7
We are both domestic and international market leaders
TAM’s Domestic Market Share*
Source: ANAC
* RPK – Revenue passenger kilometer
TAM’s International Market Share* – Among Brazilian carriers
33,0%35,8%
48,0% 48,9% 49,30% 48,2%
54,2%
43,5%
2003 2004 2005 2006 2007 Jan - Jul 2008 2Q08 Aug/08
12,0% 14,3%
37,5%
67,5%70,9% 74,0% 73,9%
18,8%
2003 2004 2005 2006 2007 Jan - Jul 2008 2Q08 Aug/08
8
We are strengthening our network in the international market through fleet and partnerships 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 Airbus fleet average age
2 B767-300ERs
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
Memorandum of understanding with Air Canada end Swiss
Focus on South American coverage – integration of TAM Airlines (Mercosur) activities
9
Our mix of international revenue reduced due to the appreciation of Real and increase of domestic yield
34%
66%
31%
69%
2Q07 2Q080
20
40
60
80
100%
Revenue(Passenger + Cargo)
DomesticInternational
Dollarexchangerate
DomesticInternational
1.926
63%37%
1.592
62%38%
Approximately 50% of our costs
(including fuel) are exposed to foreign
currencies
-17%
ASK proportion
10
156196
531
1,170
226
256
603
1,530
2Q07 2Q08
2,054
2,615
0
500
1,000
1,500
2,000
2,500
3,000
Gross Revenue (R$ M) Domestic passenger revenue grew 31%
RPK increased 8%
ASK increased 14%
International passenger revenue grew 13%
RPK increased 29%
ASK increased 22%
Cargo revenue grew 31%
Other revenue grew 45%
Our gross revenue increased 27%...
27%
Domestic Pax International Pax Cargo Other
11
...and total RASK increased 9.5%...
RASK total ¹ ²
RASK scheduled domestic²
Domestic load factor - %
Yield scheduled domestic³
RASK scheduled international²
International load factor - %
Yield scheduled international³
Yield scheduled international³ (USD cents)
2Q07 1Q08 2Q08 2Q08 vs 2Q07
2Q08 vs 1Q08
R$ Cents
1 Includes charter. cargo and Other revenues. net of taxes2 Net of taxes3 Gross of taxes
16.80
15.26
71.9
22.25
12.30
69.1
17.83
9.26
16.38
15.37
69.9
23.09
11.39
76.9
14.82
8.47
18.40
17.66
68.1
27.23
11.48
73.4
15.64
9.82
9.5
15.7
-3.9 p.p.
22.4
-6.7
4.3 p.p.
-12.3
6.1
12.3
14.9
-1.8 p.p.
17.9
0.8
-3.5 p.p.
5.5
16.0
6.39 6.51 7.21 12.9 10.7 RASK scheduled
international² (USD cents)
12
...and the total CASK increased 8.4%...
CASK
CASK excl-fuel
2Q07 2Q08
16.5217.91
0
5
10
15
20
Total CASKBR GAAP - R$ cents
2Q08 vs 2Q07
-3.4%
8.4%
13
...increasing the spread (RASK-CASK)...
2Q07 2Q08
16.8016.52
18.40
17.91
15
16
17
18
19
RASK/CASK (R$ Cents)BR GAAP
RASKCASK
EBITMargin
Spread
1.7%
0.28
2.7%
0.49
14
...impacting our margins in BR GAAP...
Margin over net revenue
2Q07 2Q08
252
301
0
100
200
300
400
EBITDAR - R$ M
19%
13% 12%
2Q07 2Q08
33
67
0
20
40
60
80
EBIT - R$ M
103%
2%
3%
2Q07 2Q08
-29
50
-40
-20
0
20
40
60
Net Income - R$ M
-1%
2%
BR GAAP
15
...and in US GAAP...
Margin over net revenue
US GAAP
2Q07 2Q08
239
277
0
50
100
150
200
250
300
EBITDAR - R$ M
16%
12% 11%
2Q07 2Q08
69
92
0
20
40
60
80
100
EBIT - R$ M
34%
3%4%
2Q07 2Q08
69
214
0
50
100
150
200
250
Net Income - R$ M
4%
9%
209%
16
...increasing our earnings per share
2Q07 2Q08
0.46
1.42
Earnings per shareUS GAAP (R$)
2Q07 2Q08
-0.19
0.33
Earnings per shareBR GAAP (R$)
17
BR GAAP Leasing IncomeTaxes
Others US GAAP
50
261
-84 -13214
0
100
200
300
400
Net Profit Reconciliation to US GAAP
46 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
18
Our balance sheet remains solid
R$ million - BRGAAP 2008* 2007 2006 2005 2004
Cash (1) 2.009 2.607 2.453 995 297
Short-Term Debt (2) 837 1.005 363 216 204
Long-Term Debt (3) 1.301 1.345 895 425 399
Total Debt (A) = (2) + (3) 2.138 2.350 1.258 641 603
Shareholder's Equity (4) 1.539 1.527 1.449 760 191
Capitalization (B) = (3 + 4) 2.839 2.872 2.344 1.185 590
Aircraft and flight equipment leases** (5) 6.193 5.976 5.032 4.389 4.557
Total Debt Adjusted (C) = (A + 5) 8.331 8.326 6.290 5.030 5.160
Total Capitalization Adjusted (D) = (3 + 4 + 5) 9.032 8.848 7.376 5.574 5.147
Debt / Capitalization (A / B) 75% 82% 54% 54% 102%
Adjusted Debt / Adjusted Capitalization (C / D) 92% 94% 85% 90% 100%
Adjusted Net Debt / Adjusted Capitalization (C - 1) / (D) 70% 65% 52% 72% 94%
* LTM
** Aircraft and flight equipment leases of the last twelve months x 7
19
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
111.4117.4100
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
20
High concentration of passengers in 11 airports
Source: ANAC
Important barrier to entry for newcomers
Limited ability for other competitors to grow
11 main airports in Brazil carry 72% of all passenger traffic
TAM has in aggregate ~40% of all slots available in these airports
% Total Domestic Passengers Boarded% TAM slots
43%
34%
39%
32%
44%
42%
27%
26%
40%
32%
46%
0% 5% 10% 15% 20%
FOR
SDU
REC
CWB
POA
CNF
SSA
GIG
BSB
GRU
CGH
20062007
21
As Brazil becomes “stable”, the leisure segment will become increasingly more important
Leis
ure
Busi
nes
s
2000 2001 2002 2003 2004 2005 2006 2007
17.9
26.6 27.025.2
28.2
35.4
39.7
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
22
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
23
...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 slipsAutomatic debit Financing for passengers via direct consumer credit with the
main retail banks
Focus on leisure/lower income segments
24
...optimizing the utilization of our aircraft on off peak hours
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2355
60
65
70
75
80%
Load Factor per hour
2Q08Oct 2007
Off Peak Peak Off Peak Peak Off Peak
25
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
26
After the shareholders agreement, Amaro Aviation integrated the controlling block
15.3%
84.7%*
78.4%
0.8%
20.8%*
ON PN
39.7% 60.3%
0
20
40
60
80
100%
Previous % of sharesTotal shares = 150,585,147
10.5%*
89.4%*
70.9%
4.6%*
24.5%*
ON PN
33.3% 66.7%
0
20
40
60
80
100%
Actual % of sharesTotal shares = 150,585,147
TEP + NF Amaro Aviation Other shareholders
* Controlling block
27
Maintain 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 yoy
Three additional international destinations or frequencies in 2008
Domestic market demand growth from 8% to 12% (in RPK terms)
2008 Guidance
We have a positive outlook for 2008
TAM
Market
Jan – Aug 2008
10.9%
49.9% dom71.3% intl
13.8%
33.1%
72.3%
-4.5%*
* Accumulated from January to June, 2008** In final approval phase by ANAC
Brasília – Buenos Aires Rio de Janeiro – Miami São Paulo – Lima Rio de Janeiro – NY** São Paulo – Orlando**
28
Our growth plan is supported by a flexible fleet plan
3
14
88
10
44
16
101
44
18
104
44
20
110
44
22
113
84
22
115
2007 2008 2009 2010 2011 2012
115125
130138
143149
0
50
100
150
Total fleet
B777 MD11 Airbus wide-body Airbus narrow-body F100
Since dec/07 we
are monofleet in
domestic operations
B767
29