Investor Relations 2012
2011 4Q P f &2011. 4Q Performance &2012 Business Plan
2012.02.10
C- Contents -1. 2011. 4Q Summary
1) Summary --------------------------------------------------------- 1
2) Compositions --------------------------------------------------------- 3
2. 2011. 4Q Financial Performance0 Q a c a e o a ce1) Income Statement --------------------------------------------------------- 5
2) Balance Sheet --------------------------------------------------------- 6
3) C t B kd 73) Cost Breakdown --------------------------------------------------------- 7
3. 2011. 4Q Operating Performance1) Int’l Passenger --------------------------------------------------------- 8
2) Cargo --------------------------------------------------------- 10
4. Fleet Plan --------------------------------------------------------- 12
5. Market Demand
1) Int’l Passenger Demand --------------------------------------------------------- 13
2) Cargo Demand --------------------------------------------------------- 15
2012 B i Pl 176. 2012 Business Plan --------------------------------------------------------- 17
1) Summary(Non consolidated)
1. 2011. 4Q Summary
1) Summary(Non-consolidated)
2011 Revenue increased by 6% due to the incensement of Chinese and Japanese tourist and expansion of long haul, but Operating income decreased by 40% due to the high fuel price and global economy slowdown
(Unit : KRW 100mil)
13 547549
(Unit : KRW 100mil)
53,3103 434
5,690 (11.3%)
Revenue Operating Income (Op. Margin)
13,547
(7.8%)
12,567(4.1%)
45.4%(+1 1%p)
378 (3.0%)(5.8%)
50,3953,434(6.4%)-39.7%
(-4.9%p)
(11.3%)
(+1.1%p)
’10.4Q. ’11.4Q.
Income Statement
’10.4Q. ’11.4Q.2010 2011 2010 2011
(Unit : KRW 100mil)
Category 2011.4Q 2010.4Q Change(%) 2011 2010 Change(%)
Revenue 13,547 12,567 7.8% 53,310 50,395 5.8%Operating
Income 549 378 45.4% 3,434 5,690 -39.7%Income- Op Margin 4.1% 3.0% 1.1%p 6.4% 11.3% -4.9%p
Net Income -157 -100 - 164 2,413 -93.2% 1
1) Summary(Non-consolidated)
1. 2011. 4Q Summary
1) Summary(Non consolidated)
By operating cash flow and disposal of Korea Express stake, Borrowings decreased 0.8tril. to 2.7tril. and debt ratio decreased by 86%p to 550%
Capital Stock
9 165
Borrowings
34,862
Debt Ratio
695% 636%
(Unit : KRW 100mil.)
8,9219,165
(244) 26,669(-8,194)
695%485%
636% 550%
2010 2011 2010 2011
2008 2009 2010 2011
※ Debt ratio in 2008, 2009 based on K-GAAP
Balance Sheet Borrowings
Category 2011.12 2010.12 ChangeCategory 2011.12 2010.12 Change
(Unit : KRW 100mil.)
Total(KRW 100mil.) 26,669 34,862 -8,194
K R W(100mil.) 18,811 24,559 -5,748
Assets 52,712 59,471 -6,758
Liabilities 44,607 51,394 -6,787
Equity 8,105 8,077 29 U S D(mil.) 675 856 -181
J P Y(mil.) 487 3,988 -3,5012
- Capital Stock 9,165 8,921 244
Debt ratio 550.4% 636.3% 86.0%p
2) Compositions
1. 2011. 4Q Summary
2) Compositions
Revenue Composition Cost Composition
Labor
11 3%DomesticOthers
11.3%
Others
30.9%
Pax
5.4%
9.3%
(+0.4%p)
(-0.5%p) (-2.6%p)
( 1 4%p)
FuelM i tSales
CommissionI t’l P
Cargo
26.9%
( 1 3%p)
(-1.4%p)
Fuel
38.4%
Lease RentalDep. &
Maintenance4.5%
Commission2.0%Int’l Pax
58.4%
(+1.3%p)
(-1.3%p)
(+7.5%p)(+0.0%p)(-3.4%p)
Lease Rental8.2%
Dep. & Amortization
4.6% (+0.5%p)(-0.6%p)
3
[Above numbers are based on 4Q.2011. data]
[() is year-on-year change %p]
2) Compositions (cont’d)
1. 2011. 4Q Summary
2) Compositions (cont d)
Revenue Composition by Passenger Routes Revenue Composition by Cargo Routes
Domestic
8 5%Europe
Oceania
5.5%(-0.3%p)
Domestic
0.4%
Japan
6.6%
Oceania
0.8%(+0.1%p)(-0.1%p)
8.5%
Japan
23.0%USA
7.4%(+0.2%p)
(+0.8%p)SE Asia
15.1%Europe
22.3%
(+0.0%p)
(+0.2%p)(+0.8%p)23.0%USA
17.8% (-0.6%p)(-0.8%p)
China
7.5%(-1.1%p)
( p)
SE Asia
20.3%
China
17.6%(+0 3%p)
USA
47.3%
( . %p)
(+0.1%p)(+0.3%p)(+0.3%p) ( 0.1%p)
4
[Above numbers are based on 4Q.2011. data]
[() is year-on-year change %p]
2. 2011. 4Q Financial Performance
1) Income Statement (Non consolidated)
CategoryQuarterly Cumulative
’11 4Q ’10 4Q Change Change 2011 2010 Change Change
1) Income Statement (Non-consolidated)(Unit : KRW 100mil.)
’11.4Q. ’10.4Q. Change g(%) 2011 2010 Change g
(%)
Revenue 13,547 12,567 980 7.8% 53,310 50,395 2,915 5.8%
Cost of Sales 11,640 10,368 1,272 12.3% 44,225 38,116 6,109 16.0%
SG & A. Expenses 1,358 1,821 -463 -25.4% 5,651 6,589 -938 -14.2%
Operating Income 549 378 171 45.4% 3,434 5,690 -2,256 -39.7%
O M i (%) 4 1% 3 0% 1 1% 6 4% 11 3% 4 9%- Op. Margin(%) 4.1% 3.0% 1.1%p - 6.4% 11.3% -4.9%p -
Non-Operating Income -846 -511 -335 - -3,278 -2,504 -774 -
Other Gain 2,055 438 1,617 369.6% 4,172 1,754 2,418 137.9%
Other Loss 2,498 441 2,057 466.8% 5,677 2,102 3,574 170.0%
- Foreign Currency related Gain/Loss 36 -16 52 - -251 172 -423 -
Financial Gain 48 32 15 47 4% 146 121 25 20 6%Financial Gain 48 32 15 47.4% 146 121 25 20.6%
Financial Loss 450 540 -90 -16.6% 1,914 2,277 -363 -15.9%
- Net Interest Cost 402 507 -105 -20.7% 1,768 2,156 -387 -18.0%
I B f T 296 133 164 155 3 186 3 030 95 1%Income Before Taxes -296 -133 -164 - 155 3,186 -3,030 -95.1%
Net Income -157 -100 -57 - 164 2,413 -2,249 -93.2%
5
2. 2011. 4Q Financial Performance
Category 2011.12 2010.12 Change Change(%)
2) Balance Sheet (Non-consolidated)(Unit : KRW 100mil.)
Current Assets 8,308 8,129 179 2.2%
Non-Current Assets 44,404 42,606 1,798 4.2%
Non-Current Assets held for sale 0 8,735 -8,735 -100.0%
Total Assets 52,712 59,471 -6,758 -11.4%
Current Liabilities 25,359 24,595 764 3.1%
Non-Current Liabilities 19 248 26 799 -7 551 -28 2%Non Current Liabilities 19,248 26,799 -7,551 -28.2%
■ Borrowings with Interest 26,669 34,862 -8,194 -23.5%
- KRW Borrowings 18,811 24,559 -5,748 -23.4%
- Foreign Currency Borrowings 7,857 10,303 -2,446 -23.7%
■ Borrowings without Interest 17,939 16,532 1,407 8.5%
Total Liabilities 44,607 51,394 -6,787 -13.2%
Capital Stock* 9,165 8,921 244 2.7%
Total Equity 8,105 8,077 29 0.4%
Debt Ratio 550 4% 636 3% 86 0%pDebt Ratio 550.4% 636.3% -86.0%p -
6
* The number of activated warrants related to BW was 8.137 thou. as of 2011.12.31* The number of remained warrants related to BW was 8,114 thou. as of 2012.02.03(Expire date : 2012.02.29)
2. 2011.4Q Financial Performance
3) Cost Breakdown (Unit : KRW 100mil )
Category 2011.4Q. 2010.4Q.Changes
RemarksDifference Change(%)
Total Expense 12 998 12 189 809 6 6%
3) Cost Breakdown (Unit : KRW 100mil.)
Total Expense 12,998 12,189 809 6.6%
- Cost of Sales 11,640 10,368 1,272 12.3%
- SG & A Expenses 1,358 1,821 -463 -25.4%
The fuel price and consumption- SG & A Expenses 4,994 3,648 1,346 36.9% The fuel price and consumption increased
- Fuel Price 301.0 232.5 68.5 29.5%
- Consumption(Mil. USG) 149.0 140.0 9.0 6.4%
- Exchange rate (₩/$) 1,113.3 1,120.0 -6.7 -0.6%
Wages 1,461 2,123 -662 -31.2% The 2010 incentive effect of year-on-year
- Number of 9 0 3 8 80 493 %Number of employees
9,073 8,580 493 5.7%
Rental Expenses 1,068 912 156 17.1%
Depreciation 593 613 -20 -3.2%
Maintenance Expenses 591 532 59 11.1%
Sales Commission 265 638 - 373 -58.5% Sales commission for passenger flight was abolished in Korea from 2011.04.01
* Interest Expenses 450 540 -90 -16.6% Borrowing reduced by KRW 819bil. year –on –year
7
3. 2011. 4Q Operating Performance
1) Int’l Passenger
RPK and Yield in 2011. 4Q increased by 10% and 7% respectively due to the increment of inbound demands,which increased by rising average earnings and the weak won, and expansion of the USA and Europe routes
) g
Item ‘11. 4Q. ‘10. 4Q. Change Change(%)Rev(KRW 100 Mil.) 7,817 6,818 998 14.6%
ASK (Mil K )
Operating
ASK (Mil. Km) 9,660 8,819 8,413 9.5%
RPK (Mil. Km) 7,180 6,700 4,795 7.2%
L/F 74.3% 76.0% -1.7%p -
Yield (KRW) 108.9 101.8 7.1 7.0%
Yield (¢) 9.8 9.1 0.7 7.6%
Routes (Revenue doesn’t include sales commission)
Routes RPK(Mil. Km) Yield (KRW)
‘11. 4Q. ‘10. 4Q. Change(%) ‘11. 4Q. ‘10. 4Q. Change(%)Int’l Passenger 7,180 6,700 7.2% 108.9 101.8 7.0%
J 796 830 4 0% 246 7 213 1 15 8%Japan 796 830 -4.0% 246.7 213.1 15.8%S.E. Asia 1,955 1,775 10.2% 88.9 83.7 6.2%China 824 764 7.7% 182.3 168.2 8.3%USA 2 200 2 105 4 5% 69 0 65 2 5 7%USA 2,200 2,105 4.5% 69.0 65.2 5.7%EU 814 626 30.0% 77.1 76.1 1.3%Oceania 590 600 -1.7% 79.5 71.7 10.8%
8
3. 2011. 4Q Operating Performance
1) Int’l Passenger (Cont’d) (U it Mil K )
7 021 7 144 6 9987,826
7 180RPK Change(%)
Int’l Passenger RPK
1) Int l Passenger (Cont d) (Unit : Mil. Km)
5,779 5,690 5,9535,300 5,501
5,122
6,227 5,998
7,021 6,7637,144
6,700 6,749 6,998 7,180
28%32%
8% 7% 5%-2% -5%
-10%
5%13% 15% 12%
-4%3%
10% 7%
'08.1Q 2Q 3Q 4Q '09.1Q 2Q 3Q 4Q '10.1Q 2Q 3Q 4Q '11.1Q 2Q 3Q 4Q
112 113Yield 증감률
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
Int’l Passenger Yield (Unit : KRW)
Change(%)
90 92
104 10597
86 90 88 91 93
112102 105 103
113 109
21% 24%
Yield 증감률Change(%)112
7%14% 14%
21%
8%
-7%14%
-7%
9%
24%16% 16%
10%1%
7%
-14% -17%'08.1Q 2Q 3Q 4Q '09.1Q 2Q 3Q 4Q '10.1Q 2Q 3Q 4Q '11.1Q 2Q 3Q 4Q
9(Change rate : year-on-year)
3. 2011. 4Q Operating Performance
2) Cargo
O ti
) g2011.4Q. RTK increased by 7% due to the increment of cargo supply and luring cargo demand but Yield decreased by 5% due to discounted ticket price by global economy slowdown
Item ‘11. 4Q. ‘10. 4Q. Change Change(%)Rev(KRW 100Mil.) 3,481 3,434 47 1.4%
ATK (Mil. Km) 1,297 1,207 90 7.4%
Operating
RTK (Mil. Km) 1,027 964 64 6.6%
L/F 79.2% 79.8% -0.6%p -
Yield (KRW) 338.8 356.4 17.6 -4.9%
R tRTK (Mil. Km) Yield (KRW)
Yield (¢) 30.4 31.8 -1.4 -4.4%
Routes (Revenue doesn’t include sales commission)
Routes‘11. 4Q. ‘10. 4Q. Change(%) ‘11. 4Q. ‘10. 4Q. Change(%)
Cargo Total 1,027 964 6.6% 338.8 356.4 -4.9%Japan 24 25 -1.8% 938.3 896.6 4.7%pS.E. Asia 127 128 -0.6% 415.2 400.6 3.7%China 26 30 -15.3% 1,023.9 973.7 5.2%USA 597 532 12.2% 276.0 304.0 -9.2%EU 242 235 2.8% 321.5 317.2 1.4%Oceania 9 10 -14.2% 308.9 303.1 1.9%
10
3. 2011. 4Q Operating Performance
2) Cargo (Cont’d)
861 867908 889
929879
964 953 979 963RTK 증감률Cargo RTK
) g ( )
1,027
(Unit : Mil. Km)
Change(%)
861 867 834777
703741
785
879
17%
27%25%
12%7% 10% 7%
1%-3% -3%
-20% -18%-15%
-6%
6% 7% 5%10% 7%
363 375387
368 364
Yield 증감률
20%'08.1Q 2Q 3Q 4Q '09.1Q 2Q 3Q 4Q '10.1Q 2Q 3Q 4Q '11.1Q 2Q 3Q 4Q
Cargo Yield (Unit : KRW)Change(%)
271
316
363 357
255261 303
375349 368 356
335364
325 339
36%47%
28%37%
48%
21%
13%
28%
-6%16%
5%
21%
-5%-4% -6%
-12%-5%
-18% -16%4% 12%
'08.1Q 2Q 3Q 4Q '09.1Q 2Q 3Q 4Q '10.1Q 2Q 3Q 4Q '11.1Q 2Q 3Q 4Q
11(Change rate : year-on-year)
4. Fleet Plan
Fleet Status
Category ‘11.12 2010 Change Operating Finance Owned 2012(E)Total 71 69 2 44 17 10 80 Ratio 62% 24% 14%Ratio 62% 24% 14%
Passenger 62 59 3 42 14 6 69 A320-200 11 11 0 11 10 A321-100 2 2 0 2 2 A321 200 15 13 2 15 20A321-200 15 13 2 15 20 A330-300 10 9 1 10 12B737-400 2 2 0 1 1 2 B767-300 7 7 0 4 3 7 B777-200ER 11 11 0 3 8 12B747-Pax 2 2 0 2 2 B747-Com 2 2 0 1 1 2
Freighter 9 10 1 2 3 4 11Freighter 9 10 -1 2 3 4 11 B767-Frt 1 1 0 1 1 B747-Frt 8 9 -1 2 2 4 10
A380 +6 FleetsDelivered Aircraft in 2011- A321 : +2 Fleets(Jan, Mar)- A330 : +1 Fleet(Mar)
Fleet Plan for 2012
A380 +6 Fleets- Delivery from 2014 to 2017- Jumbo A/C with more than 500 seats- Expand of long haul routes
12
Fleet Plan for 2012- Passenger: +7 Fleets(narrow body +4, mid/wide +3)- Freighter: +2 Fleets(B747-400)※ B777 is only fleet introduced by financing lease
A350 XWB(800/900/1000) +30 Fleets- Delivery form 2016 to 2022- A/C for Mid/long haul routes with 270~350 seats- Eco-friendly Aircraft(Low noise & emission)
5. Market Demand – 1) Int’l Passenger
Int’l Passenger Demand
Int’l Passenger Transit
g
4,500 Thou. Pax 550 Thou. Pax
3,500
4,000
,
400
450
500
2,000
2,500
3,000
250
300
350
Outbound Inbound
1 2 3 4 5 6 7 8 9 10 11 12 Month2007 2008 2009 2010 2011
1 2 3 4 5 6 7 8 9 10 11 12 Month2007 2008 2009 2010 2011
800
900
1,000 Thou. Pax
1,200
1,400 Thou. Pax
500
600
700
800
1,000
400
1 2 3 4 5 6 7 8 9 10 11 12 Month
600
1 2 3 4 5 6 7 8 9 10 11 12 Month13
[Source : KTO, Incheon Airport Corporation, Korea Airport Corporation]
D d f M j C t i
5. Market Demand – 1)Int’l Passenger Demand(Cont’d)
ChinaOutbound Inbound
Demand of Major Countries
2008 2009 2010 20112008 2009 2010 2011
300
400
500 Thou. Pax
150
200
250
300 Thou. Pax
Japan
200
300
1 2 3 4 5 6 7 8 9 10 11 12 Month
300Thou. Pax
50
100
1 2 3 4 5 6 7 8 9 10 11 12 Month
350 Thou. Paxp
100
150
200
250
200
250
300
350
70 Thou. PaxUSA 150Thou. Pax
50
100
1 2 3 4 5 6 7 8 9 10 11 12 Month
150
200
1 2 3 4 5 6 7 8 9 10 11 12 Month
40
50
60
507090
110130
30
1 2 3 4 5 6 7 8 9 10 11 12 Month
14
3050
1 2 3 4 5 6 7 8 9 10 11 12Month
[Source : KTO]
5. Market Demand – 2) Cargo
Cargo Demand
120 Thou. Ton2008 2009 2010 2011
Cargo Transit
g
280 Thou Ton
2008 2009 2010 2011
100
110
230
280 Thou. Ton
70
80
90
130
180
70
1 2 3 4 5 6 7 8 9 10 11 12 Month
Outbound(except transit)
Inbound(except transit)
130
1 2 3 4 5 6 7 8 9 10 11 12 Month
70
80 Thou. Ton
60
70 Thou. Ton
50
60
30
40
50
40
1 2 3 4 5 6 7 8 9 10 11 12 Month
20
1 2 3 4 5 6 7 8 9 10 11 12Month
15[Source : Incheon Airport Corporation]
5. Market Demand – 2) Cargo(cont’d)
Composition of Cargo Export (Weight)
Chemicals5.6%
Plastics
Others4.1%
Wireless devices10.0%
ChemicalsChemicals
7.0%7.0%OthersOthers
4.8%4.8%
Wireless devices9.7%
Plastics4.8% Textiles
9.5%
Steel / MetalElectric
Computers3.5%
PlasticsPlastics
4.9%4.9%TextilesTextiles
10.8%10.8%
ElectricElectric
Computers3.0%
4.8%
Machinery259%
devices45.4% 2010 Steel / MetalSteel / Metal
4.4%4.4%
Electric Electric
devicesdevices
39.8%39.8%
DisplayPanels3.5%
2011DisplayPanels9.7% 25.9%
Semi-conductors
Car parts 8.6%
MachineryMachinery
27.7%27.7%Semi-conductors
5.7%
Car parts 9.6%
4.9%TV parts
3.5%
Optical instruments
4.6%
5.7%
TV parts 1.9%
Optical instruments
2.9%
16
[Source : The Korea International Trade Association]
6.2012 Business Plan - Strategy
Growth & Creative Change
Revenue KRW 5.7tril., Operating Income KRW 452bil. in 2012
Routes Finance
Strengthening Korea - China –Japan routes
Fleet Upgrade
AircraftDebt ratio decrement
Reduced interest costExpansion of long haul routes
Maintain major cargo routes
Fleet Upgrade
Fleets introduction- Passenger +7, Freighter +2
Reduced interest cost
Strengthening of risk management
17
6.2012 Business Plan – Major index
Exchange Rate Fuel Price
1 300F/X rate
$/BBL(MOPS)
1,265
1,200
1,300
$121$126 $125
$110
$125
1,055
1,143
1,091
1070
1,100
$87$90
$95
956927
900
1,000 $81
$70$65
$80
Category 2012(E) 2011 Change(%) Category 2012(E) 2011 Change(%)
2006 2007 2008 2009 2010 2011 2012(E) 2006 2007 2008 2009 2010 2011 2012(E)
F/X Rate(₩/$) 1,070.0 1,107.7 -3.4%
Category 2012 Sensitivity
Mops($/BBL) 125.0 125.6 -0.5%
F/X ₩/$ 10 ↑: Cash flow loss 8.8bil / Translation loss 11.9bil
Fuel MOPS 1$/BBL ↑: Fuel Cost increase 13.7bil. 18
6. 2012 Business Plan – Financial Plan
RevenueOperating Income
(Op. Margin %) Capital Stock Debt Ratio(Borrowings)
(Unit : KRW 100mil.) (Unit : KRW 100mil.)
57,350
( p g )
4,520(7.9%) 9,165
9,759
(594)
550.4%(26,669)
400.2%(28,468)
53,310 3,434 (6 4%)
( g )
(7.6%)31.6%
(+1.4%p)
(594) ( , )(-150.2%p)
(6.4%)
2011 2012(E) 2011 2012(E) 2011 2012(E) 2011 2012(E)
Income Statement Balance Sheet
Category 2012(E) 2011 Change(%) Category 2012(E) 2011 Change(%)(Unit : KRW 100mil.) (Unit : KRW 100mil.)
Category 2012(E) 2011 Change(%)
Revenue 57,350 53,310 7.6%
OperatingI 4,520 3,434 31 6%
Catego y 2012(E) 2011 Change(%)Assets 57,216 52,712 8.5%
Liabilities 45,778 44,607 2.6%
Equity 11,439 8,105 41.1%Income 4,520 3,434 31.6%
(Op. Margin) 7. 9% 6.4% 1.4%p
q y , ,
(Capital Stock) 9,759 9,165 6.5%
Debt Ratio 400.2% 550.4% -150.2%p19
l
6.2012 Business Plan – Operating Plan
Category 2012(E) 2011 Change(%)
Int’l Pax Cargo
Category 2012(E) 2011 Change(%)
ASK (Mil. Km) 40,057 37,471 6.9%
RPK (Mil. Km) 31,542 28,753 9.7%
ASK (Mil. Km) 5,167 4,997 3.4%
RPK (Mil. Km) 4,119 3,923 5.0%
3 2 3 1 2 1%
Maintain major cargo routes in US and EUStrengthening Korea - China - Japan routes
Yield (KRW) 107.8 107.6 0.2% Yield (KRW) 355.2 341.2 4.1%
- Expand existing routes and develop new routes
Develop South America Market- Market expansion through Miami route
g g p- Maintain superiority in China routes- Strengthening competitiveness of Japan routes
Expansion of long-haul routes- Expansion of cooperation in South America- Build new local partnership
Strengthen Asia routes
Expansion of long haul routes- Operating daily flight in all USA - Expansion in Europe routes
Strengthen fleet competitiveness g- Launching Hanoi route and expanding original routes- Vitalizing approved flight rights such as China etc
Strengthen fleet competitiveness- Additional upgrade to Quadra Smartium- Introduction A380 +4(2014~), A350 +30(2016~)
20