090601 - bradesco - road show
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June 04 – 05, 2009
Non Deal Road Show – South AmericaBradesco
2
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 forward looking 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.
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PreviousPeriod
CurrentPeriod
J FMAM J J ASONDJ FMAMJ JASOND J FMAMJ JASONDJ FMAMJ J ASOND J FMA90
95
100
105
110
115
120
125
130
Domestic Market - Variation(vs previous period)
The Brazilian domestic market grew 4% until April 2009
20072005 2006 200819% market growth 12% market growth 12% market growth 7% market growth
20094% market growth
Source: ANAC
4
Brazilian domestic market is composed mainly by business passengers
Leis
ure
Busi
nes
s
2000 2001 2002 2003 2004 2005 2006 2007 2008
17.9
26.6 27.025.2
28.2
35.4
39.7
44.447.7
0
10
20
30
40
50
Domestic Market Passenger Mix (RPK M)
CAGR
11%
20%
* TAM Estimates
5
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
% TAM slots
43%
34%
39%
32%
44%
42%
27%
26%
40%
32%
46% Fortaleza
Rio de Janeiro4
Recife
Curitiba
Porto Alegre
Belo Horizonte
Salvador
Rio de Janeiro³
Brasília
São Paulo²
São Paulo¹
% Total Domestic Passengers Boarded
0% 5% 10% 15% 20%
20062007
1 Congonhas2 Guarulhos3 Galeão4 Santos Dumont
6
We have a comprehensive domestic network covering the main airports
We have regular flights to all Brazilian capitals and major cities reaching 42 destinations
We operate approximately 700 daily flights
Commercial agreements with Brazilian Regional Airlines (Trip/Total, Passaredo and NHT) allowing us to reach a total of 79 destinations in Brazil
7
We have been domestic market leaders since 2003, reaching 49% in April 2009
Domestic Market Share – Apr/09Domestic Market Share – Apr/09Domestic Market Share – 1Q09Domestic Market Share – 1Q09
Other 10,2%
TAM 49,5%
GOL/VRG
40,3%
Other 12,0%
TAM 49,2%
GOL/VRG 38,8%
TAM’s Domestic Market Share*
Source: ANAC
*RPK – Revenue passenger kilometer
TAM’s Domestic Market Share*
33,0%35,8%
48,0% 48,9% 50,3% 49,5%43,5%
2003 2004 2005 2006 2007 2008 Jan-Apr 09
8
PreviousPeriod
Market
TAM
J FMAM J J ASONDJ FMAM J J ASOND J FMAMJ J ASOND J FMAMJ JASOND J FMA40
60
80
100
120
140
160
180
200
International Market - Variation(vs previous period)
40% TAM’s growth 41% TAM’s growth 71% TAM’s growth 40% TAM’s growth
7% market growth 30% market decrease 5% market decrease 26% market growth
Source: ANAC
The international market (among Brazilian carriers) decreased 7% in 2009, while we grew 15%
20072005 2006 2008 2009
15% TAM’s growth
7% market decrease
9
Higher growth anticipated for Brazilian carriers due to the unbalance in the bilateral agreements…
Source: ANAC annual report
* estimates
57.4%
42.6%
58.2%
41.8%
57.7%
42.3%
66.9%
33.1%
71.2%
28.8%
66.5%
33.5%
2003 2004 2005 2006 2007 2008*
7.78.9
9.9 10.211.4
12.1
0
3
6
9
12
International passenger - Million
BrazilianCarriers
IntlCarriers
CAGR 2003 – 20089%
CAGR 2003 – 20089%
10
…observed in many countries, as the example between Brazil and USA
97
107
127
2721
297
10853
Italy
England
Germany
France
Spain
USA
1414
1414
2121
3030
5151
126126
150 100 50 0 50 100 150
Weekly Frequencies*
Brazilian Carriers Foreign Carriers
* May 25, 2009 HOTRANs
Available space on bilateral Operated by Brazilian Carriers Operated by Foreign Carriers
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We are the leading Brazilian international carrierLong haul market
Miami 35x per weekNY 18x per weekOrlando 7x per weekParis 21x per weekLondon 7x per weekMilan 7x per weekFrankfurt 7x per weekMadrid 7x per week
Latin American marketBuenos Aires 63x per weekBariloche 2x per weekCochabamba 4x per weekSanta Cruz de Sierra 4x per weekSantiago 14x per weekAsuncion 21x per weekCiudad del Leste 7x per weekMontevideo 7x per weekCaracas 7x per weekLima 7x per week
Note: Based on Jan 2009 network
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Since July 2006, we are international market leaders among the Brazilian companies
International Market Share – Apr/09International Market Share – Apr/09International Market Share – 1Q09International Market Share – 1Q09
Other 0,2%
TAM 85,5%GOL/VRG
14,4%GOL/VRG
13,6%
TAM 86,2%
Other 0,1%
TAM’s International Market Share* – Among Brazilian carriersTAM’s International Market Share* – Among Brazilian carriers
12,0% 14,3%
37,5%
67,5%75,2%
85,7%
18,8%
2003 2004 2005 2006 2007 2008 Jan-Apr 09
Source: ANAC
*RPK – Revenue passenger kilometer
13
In 2008, revenues increased 30% given increased operations and costs increased 28% mainly due to fuel
8%9%
25%
57%
9%
9%
26%
56%
13%
17%
33%
38%
10%
18%
40%
32%
2007 2008 2007 2008
8,454
10,963
7,714
9,859
Revenues (R$ M) Costs (R$ M)
PersonnelFuelOther Costs
Selling and marketingDomestic PaxInternational Pax
CargoOther
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On a quarterly basis, our gross revenue increased 17%...
189
214
613
1,321
288
208
797
1,443
1Q08 1Q09
2,337
2,736
0
500
1,000
1,500
2,000
2,500
3,000
Gross Revenue (R$ M)
17%
Domestic passenger revenue grew 9%
RPK increased 5%
ASK increased 16%
International passenger revenue grew 30%
RPK increased 10%
ASK increased 18%
Cargo revenue decreased 3%
Other revenue grew 53%Domestic Pax International Pax Cargo Other
US GAAP non audited
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...and our total RASK increased 0.5%...
RASK Total ¹ ²
RASK scheduled domestic ²
Scheduled load factor (%)
Scheduled yeild ³
RASK scheduled international ²
Scheduled load factor (%)
Scheduled yeild ³
RASK scheduled international ²(USD cents)
Scheduled yeild ³(USD cents)
1Q081Q08
16.31
15.37
69.9
23.09
11.39
76.9
14.82
6.51
8.47
4Q084Q08
19.21
16.97
64.5
27.65
14.62
72.7
20.10
6.26
8.60
1Q091Q09
16.39
14.21
63.1
23.59
12.48
71.7
17.40
5.39
7.52
1Q09 vs 1Q08
0.5%
-7.6%
-6.8 p.p.
2.2%
9.5%
-5.2 p.p.
17.4%
-17.3%
-11.3%
1Q09 vs 4Q08
-14.7%
-16.3%
-1.3 p.p.
-14.7%
-14.7%
-1.0 p.p.
-13.4%
-13.9%
-12.6%
1 Includes charter, cargo and Other revenues, net of taxes2 Net of taxes3 Gross of taxes
US GAAP non audited
R$ Cents
16
...leading the CASK to a reduction of 3%, increasing the spread
RASK(R$ Cents)
CASK(R$ Cents)
CASK ex-combustível(R$ Cents)
Spread(RASK - CASK)
1Q081Q08
16.31
15.71
9.58
0.60
1Q091Q09
16.39
15.23
10.91
1.17
1Q09 vs 1Q08
0.5%
-3.1%
13.9%
93.0%
US GAAP non audited
17
Interest expense and hedge impacted our financial result
*WTI West Texas Intermediate
Financial income Interest income from financial investments Exchange variation Financial instrument/gains – FX Financial instrument/gains – WTI*
Other
Financial expense Interest expense from financial investmentsInterest expenseExchange variation Financial instrument/loss – FX Financial instrument/loss – WTI*
Realized Unrealized
Other
Financial result, net
1Q081Q08
55.1 92.6 40.7
3.4 218.5
-(88.4)(62.2)(0.3)
-(63.7)(3.3)
(217.9)
0.6
1Q091Q09
30.0 219.1
-
8.7 485.5
(4.2)(117.3)(177.4)
-
(290.0)-
(7.0)(595.9)
(110.4)
Realized 26.7 -Unrealized - 227.7
R$ Million
US GAAP non audited
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We improved our marginsMargin over net revenueUS GAAP non audited
1Q08 1Q09
283
475EBITDAR - R$ M
68%
13%
18%
1Q08 1Q09
83
188EBIT - R$ M
125%
4%
7%
1Q08 1Q09
47
57
Net Income - R$ M
2,2%2,1%
1Q08 1Q09
0.31
0.38
Earnings per Share - R$ Cents
22% 22%
19
The cash consumption was mainly due to hedge and operations
OpeningBalance Jan/09
Hedge Operating Investing Financing ClosingBalance Mar/09
withrestricted cash
Restricted cash ClosingBalance Mar/09
1,914
-290-160 -57
-801,327
-2421,085
0
500
1,000
1,500
2,000
2,500
CashR$ Million
US GAAP non audited
20
More than 1/3 of our hedge positions for 2009, were realized in the 1Q09
1Q09 2Q09 3Q09 4Q09 Total 2009 1Q10 2Q10 3Q10 4Q10 Total 2010 1Q11
Volume (Thousand barrels)
Volume (Thousand barrels)
1,927 1,245 1,145 830
5,146 890 955 865 720
3,429 145
Average Strike (USD/bbl)
Average Strike (USD/bbl)
107113110109109114115114113114107
Projected Consumption Covered
Projected Consumption Covered
52%33%30%22%34%23%25%22%19%22%4%
21
The hedge impact in our cash will be lower in the next quarters
1Q09 2Q09 3Q09 4Q09
125
7969
49
0
50
100
150
Hedge Impact on Cash(USD million)
Assuming a WTI price of 50 USD per barrel until the end of 2009, the cash impact from
the hedge would reduce significantly.
Assuming a WTI price of 50 USD per barrel until the end of 2009, the cash impact from
the hedge would reduce significantly.
22
Guidance 2009
TAMTAM
MarketMarket
Realized Jan-Apr
Realized Jan-Apr
Domestic market demand growth (RPK)
Maintain market share leadership in both markets
Domestic
International
Supply growth (ASK)
Domestic
International
Average overall load factor at approximately
Additional international destinations or frequencies in 2009
Guidance 2009
Guidance 2009
1% - 5%
- - -
- - -
8%
20%
67%
1*
4.0%
49.5%
85.7%
13.8%
21.8%
67.2%
- - -
* Flight to Johannesburg estimated to be launched on September
23
43
A340 2
A330 - 16
A321 - 5
A32082
A31920
43
18
107
43
20
110
43
22
113
83
22
115
103
22
117
1Q09 2009 2010 2011 2012 2013
132 132137
142148 152
Total Fleet(End of Period)
Our fleet size will be maintained until the end of this year
B767 Airbus wide-body Airbus narrow-bodyB777
Average fleet age of 5.7 years by the end of
1Q09
Average fleet age of 5.7 years by the end of
1Q09
Standardization of narrow body fleet:
A320 family
Standardization of narrow body fleet:
A320 family
Aircraft to be received in 2009 will replace the ones that will be redelivered and already
have pre committed financing
Aircraft to be received in 2009 will replace the ones that will be redelivered and already
have pre committed financing
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February 19, 2008