Going further THE EMIRATES GROUP ANNUAL REPORT 2013-14 His Highness Sheikh Mohammed bin Rashid Al Maktoum Vice President and Prime Minister of the UAE and Ruler of Dubai The United Arab Emirates was ranked 19th overall in the World Economic Forum’s The Emirates Group’s footprint now spans over 80 countries, connecting people, 2013 Global Competitiveness Index (GCI), and 1st globally in six sectors of the GCI business and opportunities all over the world. In its 55 years of operations, the Group index. It is an achievement we are proud of, and one that drives us to work harder to has managed to maintain a balance between profitability and sustainability, and obtain further progress. stayed true to the principles of good business – healthy competition, accountability, and delivering added value. From our historical roots as a trading post, the UAE and Dubai have embraced and built on the advantages of our geographic location. We invest in strong and The aviation sector is a strategic pillar for the UAE economy without which tourism sustainable infrastructure such as world-class airports, marine ports, tourism and and trade cannot flourish, and the Emirates Group plays a vital role in this eco-system. commercial institutions, to establish our country as an important gateway for global Looking at its track record, strategies, and investments in people and infrastructure, trade flows, investments and travel; while not forgetting social priorities like education, I am confident the Emirates Group is in a strong position to address future challenges healthcare and housing for the people who live and work here. with agility and imagination, and that it will continue to make valuable contributions not only to the UAE, but also the global aviation industry. Our leading national corporations help contribute to the vision and goals of our country, and in many ways they also exemplify the spirit that defines us as a nation - the dynamic and global mindset, openness to healthy competition, and the quest for continuous improvement. 1 Going further to Taking our 11 25 achieve our potential | business further | The air services provider 26 Charting our future | 12 that goes further | Airport operations: investing in 28 Taking our customers further | 14 capacity and capability | Taking the Cargo: meeting challenges Financial highlights 4 16 30 | Emirates experience further | and seizing opportunities | Catering: expanding our Chairman’s statement | 6 32 Extending our brand reach | 18 global footprint | The leadership team 8 Travel: a focused strategy | 34 Taking our people further | 20 for growth | Focusing on results and mercator: better business 22 36 long term goals | through technology | Emirates is a global airline, serving 142 cities in 80 countries from its hub in Dubai, United Arab Emirates. Operating the world’s largest fleets of Airbus A380 and Boeing Emirates Financial 49 Commentary | 777 aircraft, its main activity is the provision of commercial air transportation services. Emirates ten-year overview | 146 Group key events | 38 dnata Financial Commentary | 59 dnata is one of the largest combined air services providers in the world and the dnata ten-year overview 148 Emirates Independent | 65 largest travel management services company in the UAE. Its main activities are Our growing network | 46 Auditor’s Report | Group companies of Emirates 150 the provision of cargo and ground handling, catering, information technology and Emirates Consolidated | 66 travel services. Financial Statements | Group companies of dnata 151 dnata Independent | 109 Auditor’s Report | Emirates and dnata are independent entities and do not form a group as defined Glossary 152 dnata Consolidated | by International Financial Reporting Standards. However, these entities are under 110 Financial Statements | common management. Therefore, in the Management Review section of this document, they are together referred to as the Emirates Group. 3 Revenue and operating income in AED m Profit attributable to the Owner in AED m Revenue and operating income in AED m Profit attributable to the Owner in AED m 13-14 82,636 13-14 3,254 13-14 7,565 13-14 829 12-13 73,113 12-13 2,283 12-13 6,622 12-13 819 11-12 62,287 11-12 1,502 11-12 5,755 11-12 808 10-11 54,231 10-11 5,375 10-11 4,406 10-11 576 09-10 43,455 09-10 3,538 09-10 3,160 09-10 613 Overview Emirates Group Emirates dnata Emirates Financial Highlights 2013-14 2012-13 % change Financial Highlights 2013-14 2012-13 % change Financial Highlights 2013-14 2012-13 % change Revenue and results Revenue and results dnata Revenue and other operating income* AED m 87,766 77,536 13.2 Revenue and other operating income AED m 82,636 73,113 13.0 Revenue and other operating income AED m 7,565 6,622 14.2 Operating profit AED m 5,123 3,654 40.2 Operating profit AED m 4,260 2,839 50.1 Operating profit AED m 863 815 5.9 Operating margin % 5.8 4.7 1.1 pts Operating margin % 5.2 3.9 1.3 pts Operating margin % 11.4 12.3 (0.9) pts Group Profit attributable to the Owner AED m 4,083 3,102 31.6 Profit attributable to the Owner AED m 3,254 2,283 42.5 Profit attributable to the Owner AED m 829 819 1.2 Profit margin % 4.7 4.0 0.7 pts Profit margin % 3.9 3.1 0.8 pts Profit margin % 11.0 12.4 (1.4) pts Financial Return on shareholder’s funds % 13.6 10.4 3.2 pts Return on shareholder’s funds % 19.1 21.4 (2.3) pts Information Financial position Total assets** AED m 110,100 102,188 7.7 Financial position and cash flow Financial position Additional Information Cash assets AED m 18,995 26,968 (29.6) Total assets AED m 101,604 94,803 7.2 Total assets AED m 8,667 7,571 14.5 Cash assets AED m 16,561 24,572 (32.6) Cash assets AED m 2,434 2,396 1.6 Financial Highlights Employee data Net debt (including aircraft Average employee strength number 75,496 67,907 11.2 operating lease) equity ratio % 209.9 186.4 23.5 pts Key operating statistics EBITDAR AED m 17,229 13,891 24.0 Aircraft handled number 288,335 264,950 8.8 EBITDAR margin % 20.8 19.0 1.8 pts Cargo handled tonnes ‘000 1,604 1,570 2.2 2012-13 figures have been re-classified to conform with the current year’s presentation. Meals uplifted number ‘000 41,275 28,584 44.4 Airline operating statistics Travel services related net sales AED bn 5.9 5.4 10.0 * After eliminating inter company income/expense of AED 2,435 million in 2013-14 Passengers carried number ‘000 44,537 39,391 13.1 (2012-13: AED 2,199 million). Cargo carried tonnes ‘000 2,250 2,086 7.9 Employee data ** After eliminating inter company receivables/payables of AED 171 million in 2013-14 Passenger seat factor % 79.4 79.7 (0.3) pts Average employee strength number 22,980 20,229 13.6 (2012-13: AED 186 million). Overall capacity ATKM million 46,820 40,934 14.4 Available seat kilometres ASKM million 271,133 236,645 14.6 Percentages and ratios are derived based on the full figure before rounding. Aircraft number 217 197 10.2 The financial year of the Emirates Group is from 1 April to 31 March. Throughout this Employee data report all figures are in UAE Dirhams (AED) unless otherwise stated. The exchange rate of the Dirham to the US Dollar is fixed at 3.67. Average employee strength number 52,516 47,678 10.1 4 5 Overview Emirates AED 22bn Emirates announces dnata (US$ 6 billion) invested across the Group, the largest-ever aircraft order at the Dubai Air Show for 50 A380s Group the highest amount ever in one financial year, and 150 Boeing 777X together worth US$ 99 Financial to build a solid foundation for our future. billion at list prices. Information Chairman’s Statement Additional Information Going further – our defining mindset In every aspect of our operations, we strive to go further. It’s an organisational Plotting a long-term course The numbers bear out the results of our approach, as Emirates and dnata marked information, communications and transactions. By then, 3.9 billion people are culture and mindset that we believe sets us apart, and positions us optimally At Emirates and dnata, we plot a course to sustainable profitability. For us, going another record year. Our Group revenue of AED 87.8 billion (US$ 23.9 billion) is the expected to travel by air, a 31% increase from 2012. In that same period, air cargo is for the long term. This same driving force is reflected everywhere you look in further means being agile and going the extra mile to excel in what we do. It means highest in our 28-year history, up 13% on 2012-13. Profits of AED 4.1 billion (US$ 1.1 expected to grow 17%. Dubai, our home and hub. In less than four decades, Dubai has transformed into investing in our products, our people, our infrastructure, and the technology we use. billion) were achieved, keeping pace with our growth even as we invested AED 22.0 a vibrant global city and a major commerce and tourism centre, because it is billion (US$ 6.0 billion) across the Group – the highest amount ever in one financial The opportunities for Emirates as a global connector of people and places, and for constantly aiming further, and going further.