Third quarter results Presentation for analysts 25 September 2006 Content
1 Financial Overview – Birgir Haraldsson, Director Audit 2 Aviation Services – Hafþór Hafsteinsson, CEO 3 Shipping & Logistics – Baldur Guðnason, CEO 4 Charter & Leisure – Magnus Stephensen, CEO 5 Summary – Magnús Þorsteinsson, Chairman Financial overview Birgir Haraldsson, Director Audit Financial overview
• All companies started using the accounting year 1.11-31.10 at beginning of November 2005.
• The comparative figures in the financial statement are for the 10 month period 1 January – 31 October 2005
• Operating revenues $ 1,400 million
• Operating expenses $ 1,424 million
• Loss before tax $ 83 million
• Net loss $ 69 million
4 Financial overview
• Total block hours flown decreased by 43% to 71,000 in Aviation Services • Number of passengers increased by 14% to 2,933 in Charter & Leisure • Total tonnes transported increased by 16% to 1,677 in Shipping & Logistics
• EBITDA: $ 34 million • EBITDA / revenues: 2,5% • EBIT: $- 24 million • EBIT / revenues: -1,7%
• Total assets: $ 2,129 million • Total equity: $ 523 million
• Equity ratio: 25% • Current ratio: 0.98
5 1 Financial Overview 2 Income Statement & Cash flow 3 Balance Sheet
6 Income Statement for 3Q 2006 All amounts in $ ,000 2005/6 2006 2005 1.11-31.7 3Q 1.1-31.10
Net sales ...... 1.374.319 668.778 1.379.537 Other income ...... 25.335 7.653 21.954 Total operating revenue 1.399.654 676.431 1.401.491
Aviation Services ...... (316.531) (94.829) (367.017) Charter & Leisure ...... (744.514) (428.181) (797.999) Shipping and Logistics ...... (362.605) (133.837) (189.793) Total operating expenses (1.423.650) (656.847) (1.354.809)
Operating result...... (23.996) 19.584 46.682
Effects of associated companies ...... (1.713) (2.074) (203) Financial income (expenses) ...... (57.242) (8.702) (1.965) Net financial income (expenses) (58.955) (10.776) (2.168)
Result before taxes...... (82.951) 8.808 44.514
Income tax ...... 14.086 (5.973) (12.116)
Net result for the period...... (68.865) 2.835 32.398
7 Cash Flow for the 2006 All amounts in $ ,000
2005/6 2005 1.11-31.7 1.1-31.10
Net earnings (loss) ...... (68.865) 32.398
Net cash (to) from operating activities ...... (41.638) 1.093 Net cash used in investing activities ...... (100.646) (209.614) Net cash provided by financing activities ...... 272.452 305.563
Net change in cash and cash equivalents ...... 130.169 97.042 Effects of foreign exchange adjustments ...... 2.813 (5.557) Cash and cash equivalents at beginning of year ...... 150.346 58.861
Cash and cash equivalents at end of period ...... 283.328 150.346
8 Financial ratios and key figures All amounts in $ ,000 9m 2006 10m 2005
Equity ratio ...... 24,6% 29,9% Current ratio ...... 0,98 0,71 Return on equity ...... -14,2% 13,7% Working capital provided by operating activit...... (7.501) 71.535 EBIT ...... (23.996) 46.682 EBITDA ...... 34.410 100.524 EBIT / revenue ...... -1,7% 3,3% EBITDA / revenue ...... 2,5% 7,2%
Total block hours flown ...... 71.236 133.053 Number of passangers (thousands) ...... 2.933 3.066 Total ocean freight transported (tonn) ...... 1.676.961
9 1 Financial Overview 2 Income Statement & Cash flow 3 Balance Sheet
10 Balance Sheet 31 July 2006 All amounts in $ ,000
31.7.2006 31.10.2005
Goodwill ...... 558.928 501.226 Other intangible assets ...... 36.718 30.566 Property, aircraft, vessels and equipment ...... 516.705 449.490 Investment in associated companies ...... 26.305 839 Other investment ...... 106.862 40.050 Guarantee deposits ...... 26.868 18.309 Deferred tax assets ...... 31.449 12.864 Total non-current assets 1.303.835 1.053.344
Inventories ...... 21.688 16.105 Trade receivables ...... 251.080 184.422 Other receivables ...... 249.076 91.020 Cash and cash equivalents ...... 283.328 150.346 Assets classified as held for sale ...... 20.367 9.775 Total current assets 825.539 451.668
Total assets 2.129.374 1.505.012
11 Balance Sheet 31 July 2006 All amounts in $ ,000
Equity 31.7.2006 31.10.2005 Issued capital ...... 26.346 22.013 Share premium ...... 516.053 365.393 Reserves ...... (30.204) 10.030 Retained earnings ...... (15.802) 51.637 Stockholders' equity 496.393 449.073
Minority interest ...... 26.709 1.495 Total equity 523.102 450.568
12 Balance Sheet 31 July 2006 All amounts in $ ,000
Liabilities 31.7.2006 31.10.2005
Non-current liabilities Interest bearing loans and borrowings ...... 656.649 410.132 Guarantee deposits ...... 3.375 1.697 Employee benefits ...... 313 1.073 Provisions ...... 94.455 0 Deferred tax liabilities ...... 6.685 7.934 Total non-current liabilities 761.477 420.836
Current liabilities Interest bearing loans and borrowings ...... 137.370 222.177 Trade payables ...... 163.095 152.476 Other payables ...... 544.330 258.955 Total current liabilities 844.795 633.608
Total liabilities 1.606.272 1.054.444
Total equity and liabilities 2.129.374 1.505.012
13 Aviation Services Division Hafþór Hafsteinsson – CEO Aviation Services Aviation Services Division
• The main focus of Aviation Services Air Atlanta Icelandic provides ACMI services to the air passenger and cargo markets worldwide. Air Atlanta DivisionIcelandic is the International Wet Icelandic operates a fleet of approximately 40 aircraft . LeaseAircraft Operation Trading of Air Atlanta Air Atlanta Icelandic has approximately 1,500 employees , and aircraft trading and contractors at peak times. activities of the newly formed Avion . Avion Aircraft Trading is a newly established company handling the Group's aircraft dealing. The company is part of Aviation Services. Avion Aircraft Trading recently concluded the purchase of eight Boeing 777-200 cargo • Supporting activities are aircraft. Maintenance & Engineering Services provided by Avia Technical Services (ATS), airport handling provided by Avia Technical Services in a maintenance, repair and Southair. overhaul company that performs maintenance services on Avion Group’s aircraft and third party aircraft. ATS has approximately 300 employees.
SouthAir Iceland is a leading ground handling company which has been at Keflavik International Airport for over six years. SouthAir employs has approximately 20 employees.
15 AVIATION SERVICES
1 Financial Overview 2 Operational Overview 3 Outlook 2006
16 AVIATION SERVICES – Financial overview
9 months 3rd Quarter • Operating Revenues $361 million • Operating Revenues $102 million
• Operating Expenses $383 million • Operating Expenses $115 million
• EBITDA was $ 11 million • EBITDA was $3.6 million • EBITDA 3% • EBITDA 4%
• EBIT was $-22 million • EBIT was $-13 million • EBIT -6% • EBIT -13%
17 AVIATION SERVICES
1 Financial Overview 2 Operational Overview 3 Outlook 2006
18 In transition after 16 years continues growth period
Continued Growth – Merger - Transition growth Transition AAI has shown exceptional 700
revenue growth between 600 Merger period 1991 and 2004 at a CAGR of 500 33% 1991 – 2004 revenue CAGR 33% 400 The growth slowed down during the merger period 300 Revenue (USDm) 2004 and 2005 200 In 2006, AAI has undergone 100 transition period as a result 0 of strategic change to 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
simplify fleet and focus 2005* 2006B 2007E 2008E 2009E 2010E more on cargo Air Atlanta Íslandsflug Business plan forecasts * 2005 figures represent 10 months from Jan- October due to changes of the financial year to November through October The Transition Period started in October 2005 The Board of Avion Group approved a restructuring plan in October 2005
Main focus of The Restructuring Plan
Increase emphasis on higher margin/longer contract cargo projects and reduce the risk of lower margin/seasonal pax projects Simplify the fleet to increase operational efficiency; retire old and inefficient aircraft Cut out projects with negative contribution; improve project control to ensure higher margins Transfer the Boeing 757, 767 and the Air Atlanta Europe operation to Excel Airways Group The rationale for increased emphasise on Cargo Projects
Wide-body fleet additions are Growth in World Air Cargo Share of freight carried by pure cargo aircraft expected to increase expected to significantly outgrow smaller aircraft World air cargo traffic is Currently, 41% of all cargo volumes is Freighter fleet size globally will expected to expand at an carried within passenger aircraft belly- grow from 1,766 in 2003 to 3,456 average annual rate of 6.2% holds in 2023 according to Boeing according to Boeing and However, growth in cargo traffic is Medium wide-body and large 5.9% according to Airbus in forecast to outstrip growth in passenger cargo aircraft are expected to the next two decades aircraft capacity lead fleet additions, growing from This will lead to an increase in demand for an estimated overall share of 44% FTKs (Billions) to 60% 800 cargo-only aircraft, resulting in a larger Forecast share in air freight carried 2003
24% 600 6.2% 500FTKs (billions) CAGR 442.7 56% 400 20% 400 300 66% 2023
200 141.1 Standard-body 200 (<50 tons) 100 59% 31% 34% 0 41% Medium wide-body 40% 2003 2023 0 (40-65 tons) 1993 1998 2003 2008 2013 2018 2023 Belly holds +4.8% p.a. Dedicated freighters +6.5% p.a. 29%
Large (>65 tons) The Fleet Restructuring in 2006 A comprehensive fleet restructuring program was carried out during the 9 months in order to increase operational efficiency and complete the merger process of Íslandsflug into Air Atlanta
The Fleet Restructuring Restructuring cost
20 aircraft will be transferred out of Air Atlanta’s The fleet restructuring has lead to short-term fleet during the financial year Nov 2005 - Oct downsizing, and has incurred more cost than 2006 expected that will temporarily impact the financial
Airbus A-310 x results of Air Atlanta Icelandic in 2006. Boeing 737-400 x x x x x PAX Boeing 747-200 x x Number of aircraft not being utilized during Boeing 747-300 maintenance checks required prior to returning Boeing 747-400 x x Boeing 757-200 x x x x aircraft Boeing 767-200 x x FLEET Redelivery cost (painting, interior, etc.) Boeing 737-300 x x x x Airbus A-300 CARGO Extra scrap and depreciation of spare parts due Airbus A-310 Boeing 747-200 to elimination of aircraft types Boeing 747-400 Extra administrative costs (employee, legal, travel, etc.) required for the fleet restructuring Air Atlanta’s future market position
AAI will become a substantial operator in the cargo market 25 20 Peer group cargo carriers* Peer group by 747-400F aircraft type 15 10
35 fleet 747-400F 5 30 0 25
20 SIA AAI 15 UPS Fleet size Cathay
10 Air Polar EVA Air EVA Air Air China Air Atlas Air Air Atlas Cargolux Emirates 5 Dragonair 0 Air Korean Global Supply Nippon Cargo Cargo Nippon China AirlinesChina Japan Airlines China Southern Current Orders Asiana Airlines MK AAI SIA Malaysia Airlines China Etihad Japan Air HKAir Asiana Great Wall Airlines Nippon Cathay EVA Air EVA Atlas Air Atlas Emirates Martinair Kalitta Air Kalitta Air China Air Cargolux Air FranceAir Evergreen Korean Air Korean
Current Orders Compared to the range of existing airlines which operate in the cargo market (excluding integrators), AAI is expected to become the 4th largest wide-body cargo operator by 2010 Its position as a major B747-400F operator will be secured by deliveries and conversions AAI will be a strong platform/player to benefit from continued freight market growth *AAI’s future orders equal net increase in cargo carriers by 2010. For all other peer airlines, Source: Air Transport Intelligence/ACAS fleet data orders exclude replacements New Organizational Chart • Air Atlanta Icelandic made organizational changes in 3rd quarter
Board of Directors Hafthor Hafsteinsson - Chairman
CEO Hannes Hilmarsson Accountable Manager
Director IT Director Quality Helgi Bjorgvinsson Adalsteinn Einarsson
Director Flight Safety Bjarni Gudmundsson
VP Finance VP HR & Admin VP Sales & Marketing VP Maintenance VP Flight Operations Geir Valur Agustsson Stefan Eyjolfsson Johann Karason Thorir Kristinsson Einar Björnsson Hafthor Hafsteinsson became Chariman of the Board of Air Atlanta Icelandic. Hafthor will continue to be CEO Aviation Serverces Hannes Hilmarsson replaced Hafthor as Chief Executive Officer Jóhann Kárason became VP Sales & Marketing Geir Valur Ágústsson became VP Finance Stefán Eyjólfsson became VP Human Resources 24 Main activities during the 9 months and to date are:
• 4 Boeing 777-200 Long Range Freighters purchased from Boeing in December, in addition to 4 previously purchased. 2 deliveries moved forward from 2011 to 2010 due to market demand • 5 Airbus A300-600 purchased from China Airlines; all re-sold with good profits • 7 B747-400 (thereof 5 freighters purchased from ANA and Cargolux to be used with Air Atlanta as part of the fleet restructuring program • 3 B747-400 freighters purchased from Air France and in process of being re-sold to a third party cargo carrier (4Q sale) • Change in management of AAT and new strong organization
25 Organizational Chart – Avion Aircraft Trading • Avion Aircraft Trading organizational changes in 3rd quarter:
Board of Directors Hafthor Hafsteinsson - Chairman
CEO David Masson
VP Finance VP Maintenance VP Sales & Marketing Þorsteinn Ó. Þorsteinsson Valdimar Sæmundsson Carine Truong
Technical Contractor Frank Kurhe
Technical Contractor Finnbogi Óskarsson
Hafthor Hafsteinsson became Chariman of the Board of Avion Aircraft Trading. Hafthor will continue to be CEO Aviation Serverces Davíð Másson replaced Hafthor as Chief Executive Officer of Avion Aircraft Trading
26 Status of sale of 51% of AAT:
• Avion Group announced at the end of June its intent to sell 51% of Avion Aircraft Trading to an international investment group. During final negotiations other parties showed strong interest.
• Avion Group’s Board of Directors decided not to conclude the sale at this time and continue further talks with other interested parties to maximize shareholders value.
• In addition current developments of aircraft transactions are promising.
27 AVIATION SERVICES
1 Financial Overview 2 Operational Overview 3 Outlook 2006
28 AVIATION SERVICES Outlook 2006
• The restructuring of Air Atlanta Icelandic has lead to short-term downsizing, and has incurred more cost than expected that will temporarily impact the financial results of Air Atlanta Icelandic in 2006.
• The restructuring will be finalised by October 2006, and next years outlook is positive for Air Atlanta Icelandic, with simplified Aircraft fleet and improved operational efficiency.
• Further gains on asset sale to be realized with Avion Aircraft Trading. More A300-600 freighter purchases and sales on the horizon and B747-400 freighter opportunities being studied.
• Aviation Services is expected to meet Budget in 2006
29 Shipping & Logistics Baldur Guðnason - CEO Eimskip Content – Shipping and Logistics
1 Financial Overview 2 Operational Overview 3 Outlook 2006
31 Financial overview – Shipping & Logistics
9 months 3rd Quarter
• Operating Revenues where $364 million • Operating Revenues where $ 143 million
• Operating Expenses were $320 million • Operating Expenses were $ 131million
• EBITDA was $47 million • EBITDA was $20 million • EBITDA 13% • EBITDA 14%
• EBIT was $29 million • EBIT was $12 million • EBIT 7,8% • EBIT 8%
32 Content – Shipping and Logistics
1 Financial Overview 2 Operational Overview 3 Outlook 2006
33 Vision and strategy
• Eimskip is a unique company with three distinct future visions: – To consolidate our position as a transport market leader offering total services in the North Atlantic through a network linking key ports in Europe, on the US East Coast and in Canada. – To be the leading short sea supplier in the Baltic states and Russia – To be a key international player in temperature- controlled cargo globally
• Eimskip's key competence is organising and running the most cost-effective transport network available. The company has a strong market share in North Atlantic sailings, which serves as a basis for further efficiencies. • On this foundation, Eimskip aims to build further growth and diversification into other areas of transport services.
34 Eimskip has engaged in the following projects in third quarter:
•May: – acquired a 55% equity stake in Innovate Holdings – acquired a 70% equity stake in Kursiu Linija • As of September, Eimskip holds 100% equity stake
• June: – All Faroese operations merged under Faroe Ship
• August: – a bid to acquire all outstanding shares for Atlas Cold Storage Income Trust • Offer has been extended to 6th of October
35 Eimskip's operations: Current value chain
• Total transport services – total solutions • More than 90 years experience in shipping in the North Atlantic • 88 operating bases in 17 countries in Europe, North - America and Asia • 35 vessels – total deadweight approx. 130,000 gross tonnes • Approximately 3,000 employees, thereof 2,000 outside Iceland • Over 40 coldstores – storage capacity over 600 thousand tons
Domestic Domestic Plant/ware- International Empty transport to Export port Import port transport Plant/ware- Empty house transport container port from port house container
Total solution
36 Atlas offer
• Eimskip has made a takeover bid to acquire all of the outstanding trust units of Atlas Cold Storage Income Trust which is listed at the Toronto Stock Exchange, the offer expires 6 October 2006
• CDN$7.00 cash is offered per Unit and the offer is fully financed
• The aggregate acquisition cost, including assumed debt of the Trust, will be CDN$574 million.
• The offer price represents a 10.6x EBITDA multiple based on the Trust’s results over the twelve months ended March 31, 2006
• The combined operations of Eimskip and Atlas Cold Storage Income Trust will create a network of more than 90 temperature controlled facilities around the world
37 Content – Shipping and Logistics
1 Financial Overview 2 Operational Overview 3 Outlook 2006
38 Outlook 2006
• Performance according to management’s expectations for the third quarter 2006, which is expected to continue in the fourth quarter
• Eimskip is set on increasing it’s operations in the following markets – North-America – Baltic states and Russia –Asia
the future is based on a strong platform home market future markets
39 EBITDA Budgets 2004-2006 as published July 2004 compared to the actuals 2004/2005 and budget 2006
Million ISK 2003 2004 2005 2006
Revenues 23.284 23.800 26.800 30.000 Expences 21.643 21.400 23.500 26.000
EBITDA 1.641 2.400 3.300 4.000
EBITDA / Revenue 7,0% 10,1% 12,3% 13,3%
5000
4000
3000
Million ISK 2000
1000 As Published before As of Today 0 2003 2004 2005 2006 Year 40 Charter & Leisure Division Magnus Stephensen – Deputy CEO Charter & Leisure Financial overview – Charter & Leisure
•9 months •3rd quarter – Operating Revenues $ 718 million – Operating Revenues $457 million – Operating Expenses $ 744 million – Operating Expenses $ 436 million – Total passengers transported 2,933 – Total passengers transported 2,470 – EBITDA – EBITDA $ -21 million $ 23,8 million – EBITDA Ratio – EBITDA Ratio -3% 5,2% – EBIT – EBIT $ -25,9 million $ 20,5 million – EBIT Ratio – EBIT Ratio -4% 4,5%
42 1 Financial Overview 2 Operational Overview 3 Outlook 2006
43 XL Leisure Group - Corporate Structure
XLLG Board of Directors Chairman Magnus Thorsteinsson
XLLG CEO Phil Wyatt Deputy CEO Magnus Stephensen CFO Halldor Sigurdarson
Airways Aviation Tour Operating COO TBA COO Michael Stoney MD Neil Morris MD Jonathan Bousfield MD Geoff Medhurst AVION GROUP Charter & Leisure
Excel Airways Seat Brokering United Kingdom XL.COM Star Airlines Counter Cyclical Travel City Direct Star Europe Shipping & France Freedom Flights Logistics Xtra Airways Kosmar Germany Air Atlanta Europe Excel Holidays Advent Air Aspire USA Take Flight Aviation XL LG Ireland Services Australia XL TO France
44 XLLG’s Regional Map
•Excel Airways Group •Travel City Direct •Kosmar Villa Holidays
•Star Europe •Star Airlines •Crystal •Heliades
•* Xtra Airways operates in the US. XLLG has 19% share in the company
•* Advent Air Ltd operates in Australia. XLLG has 5% share in the company
45 Star Airlines
Star Airlines is the second largest charter airline in the French Market
Purchase price was 14 million EUR
Revenues for financial year 2005 was Euros 173 million and EBITDA Euros 1.9
900,000 passengers flown every year
Star Airlines operates charter flights to over 20 destinations in the Mediterranean Area, Africa and the Middle East.
In addition to operating Charter flights, they also operate scheduled services to destinations such as Lebanon, Tunisia, Maldives and Morocco.
46 Star Europe
Star Europe started operating in Germany in the beginning of May 2006
Estimated Investment of Euros 10 million to establish the operation in 2006. YTD investment 2,5 MEUR or 75% under budget.
Estimated turnover for FY2006 Euros 30 million
Aircraft fleet 4 Airbus in Summer 2006, initial plan 2 aircraft
Commercial contracted: TUI, Hapagfly, Germanwings, Edelweiss Air, Turist Prishtina, HellasJet, Volaré
Plan to add aircraft for S07
47 Counter cyclical markets – Xtra Airways
• Avion has made an agreement with Xtra Airways, Nevada based airline, to lease part of Excel Airways’ fleet during the Winter schedule, which is high season for Xtra Airways. Xtra will lease three aircraft from Excel Airways over Winter 2006. Economic benefit to Excel is estimated at 6 MUSD. • Avion Group has a 19% share in Xtra Airways
48 Counter cyclical markets - Advent Air
• Strategic joint venture with Advent Air, an Australasian airline group, parent of Skywest. • Avion’s subsidiaries, Star Airlines and Star Europe wil provide up to four Airbus A320 aircraft to Advent Air’s subsidiary, Skywest during the Winter schedule which is Skywest’s peak season • This is contrary to Star AIrlines’ and Star Europe’s high season therefore, maximising utilization of existing aircraft • Avion Group has purchased a 5% share in Advent Air
49 Kosmar Villa Holidays
Kosmar Villa Holidays, which specializes in travel to Greece and Turkey, was acquired in 3Q
Purchase price was $ 9.4 million
Turnover for the financial year 2005 was 154 million USD. PBT 1 MUSD.
Offers over 80 resorts in Greece and 12 resorts in Turkey
Kosmar Villa Holidays is the UK No.1 Greek Specialist and was voted Best Tour Operator to Greece at the British Travel Awards Licenced to sell over 250,000 holidays, under Excel ownership Kosmar will increase capacity to 350 000 seats using direct penetration (XL.Com)
50 Crystal TO
Recently Star Airlines acquired French Internet B2B Tour Operator, Crystal, which has a market leading position across the French internet market in long haul sales
Purchase price for 66% share was EUR 2.0 million
Turnover for the year 2005 was Euros 14 million and PBT 1 million EUR.
Crystal carried 32,000 passengers in 2005, a threefold increase over the previous year
Crystal’s most popular destination routes are: Dominican Republic, Mexico, French Indies, Cuba, Maldivian Republic, Brazil, Tunisia, Morocco and Croatia
Largest clients are: Lastminute, Opodo, Expedia and Karavel
51 Heliades
• Star Airlines has acquired a French Tour operator Heliades which specialises in travel to Greece and Cyprus • Purchase price was EUR 7.7 million • Turnover for the financial year 2005 was Euros 80 million and PBT Euros 3.3 million • Heliades carried 120,000 passengers in 2005 • On completion of the acquisition, XL Leisure Group, will be France’s fifth largest travel organization
52 Excel Airways Group – UK Market Share
Excel Airways Group is the 5th largest Passenger License Holder in the UK Market after the acquisition of Travel City Direct.
Position in 2006
Position in 2005
53 1 Financial Overview 2 Operational Overview - Regional update UK/ Fr/Germany 3 Outlook 2006
54 Contribution per pax
Aiways Divison Sales margin on aircraft fleet on budget
Tour Operating Division
Sales per pax down on budget Contribution per Pax (£)
Pax flown on budget 100 80 Growth in pax flown not enough to 60 40 20 compensate for shortfall in salesmargin per 0 -20 pax -40 Actual -60 Budget -80 Excess capacity in market due to difficult -100 conditions Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Overall Revenue Analysis Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Total Actual revenue per pax (£) 344 383 264 313 297 362 253 222 318 328 278 267 Budgeted revenue per pax (£) 325 394 267 307 285 376 263 243 333 342 281 294
Pax flown 19,797 31,220 19,576 25,776 38,015 50,138 118,638 161,192 225,973 252,566 252,536 192,813 1,388,241
55 Estimated results for the year
• Increased market share. Total number of seats sold on budget. • However, Mid summer demand lower than expected because of exceptionally hot summer in UK. - Results in lower prices/contribution per seat then originally anticipated. • Many flights cancelled because of Terrorist threat & UK travel security alert, additional costs related to passenger assistance and compensation • Terrorist incidents such as the ones in Turkey and Jordan • Main competitors have issued profit warnings, f.ex: MyTravel Group plc, Thomas Cook, • UK airlines have not performed according to expectations, f.ex: easyJet, British Airways • High fuel prices • Forecast for 4Q indicates performance under budget
56 Summary Magnus Þorsteinsson, Chairman Summary
• Two out of three division perform in line with expectations for the year 2006
• Charter & Leisure’s forecast for 4Q indicates performance below budget
• Redelivery costs of aircraft more than planned in Air Atlanta Icelandic. 20 aircraft returned during FY06.
• Mid summer demand lower than expected due to terrorist threat and hot summer in UK – Total number of seats sold on budget – Lower prices per seat then originally anticipated
• Avion Group is a leading international transport solutions group
• Operations continue to be characterised by steady growth in operating revenues
58 Results compared to forecasts for 2006
Analysts forecasts for 2006 results- in million $ Landsbanki Kaupthing Bank 2006 forecast Revised forecast Total operating revenues 2.044 2.010 1.926 2.100 EBITDA 162 161 165 120 EBITDA margin 8,0% 8,0% 8,6% 5,7% EBIT 83 89 105 53 EBIT margin 4,0% 4,4% 5,5% 2,5% Profit (loss) 54 61
59