1Q07 Results Presentationri.voegol.com.br/arquivos/Gol_Apresentacao_1T07_Eng.pdfGTI S.A. Domestic...

1Q07 Results PresentationApril 20, 2007

2This presentation is subject to copyright and may not be copied or used without GOL’s express consent

GOL Webcast 1Q07

LowerCosts

HigherLoad Factors

LowerFares

HigherProfit

Growth

Brazil’s Low-Cost, Low-Fare AirlineBrazil’s Low-Cost, Low-Fare Airline

GOL’s MissionTo be recognized by 2010 as the airline that popularized high-quality,

low-fare air transportation

GOL’s MissionTo be recognized by 2010 as the airline that popularized high-quality,

low-fare air transportation


GOL Webcast 1Q07

Highlights 1Q07Highlights 1Q07

Net income of R$ 116.6 million in 1Q07Pre-tax income margin of 15% (R$160 MM)

Lowest Cost Provider (CASK = R$13.1 cents / ASK)

Worldwide reference in Profitability (Net margin LTM = 11%)

Stimulating demand (industry RPKs growing 12% +)

One of highest industry growth rates in world

Solid Growth in 1Q0722 additional flight frequenciesLoad factor: 70%Volumes (RPK) grew 60% y-o-yAverage market share 1Q07:• 39% domestic• 18% international


GOL Webcast 1Q07

MacapMacapáá

FortalezaFortaleza

NatalNatal

RecifeRecife

CuiabCuiabááSalvadorSalvador

VitVitóóriaria

Porto SeguroPorto Seguro

Campo GrandeCampo Grande

AssunAssunççãoão

Panama City

ManausManaus

MaringMaringáá

São LuisSão Luis

Boa VistaBoa Vista

Buenos AiresBuenos Aires

Rio BrancoRio Branco

Joao PessoaJoao PessoaPorto VelhoPorto Velho

Porto AlegrePorto AlegreRosarioRosario

Caxias do SulCaxias do Sul

AracajuAracaju

Santiago Santiago

TeresinaTeresina

LimaLima

GoiâniaGoiânia

Campina GrandeCampina Grande

PetrolinaPetrolina

CampinasCampinas

Santa CruzSanta Cruz

BelBeléémmSantarSantaréémm

Montevideo

Rio de Janeiro

Sao Paulo

Cabo Frio

IlhIlhééusus

Ribeirão PretoRibeirão Preto

CordobaCordoba

FozFoz do Iguado IguaççuuLondrinaLondrina

Juazeiro do NorteJuazeiro do Norte

CuritibaCuritibaJoinvilleJoinville

ChapecChapecóó

B. HorizonteB. Horizonte

ImperatrizImperatriz

PalmasPalmas

BrasBrasíílialia

MarabMarabáá

Florianópolis

Pres. Pres. PrudentePrudenteUberlandiaUberlandia

CruzeiroCruzeiro do do SulSul

Sao J. Rio PretoSao J. Rio Preto

São José dos Campos

January 2006

January 2001

January 2005January 2004January 2003January 2002

January 2007

Future routesApril 2007

Caracas

BogotBogotáá

Navegantes

New Markets Increase in Fleet

Lima - LIM - 12-feb-07Population: 8.4mm inhabitants

GIQ - 17/Feb - #66(737-800)

GTL - 28/Mar - #67(737-800 SFP)

Highlights 1Q07Highlights 1Q07


GOL Webcast 1Q07

Capacity and Network Expansion Capacity and Network Expansion Flights/Day

Number of Operating

Aircraft(average)

RPK (MM)

ASK (MM)

4Q06 1Q07 Dec/06 Mar/07

600630

+5.0%

+53.0%

450+40.0%

Mar/061Q06

+11.5%

5966

43

4Q061Q06 1Q07

3,066

4,1234,894

+59.6%

+18.7%

4Q061Q06 1Q07

4,340

6,0707,010

+61.5%

+15.5%


GOL Webcast 1Q07

2007E Capacity Growth2007E Capacity Growth

Company Brand Markets ASK Growthy-o-y (07-06)

GTA S.A. Domestic +33%International +214%Total +50%

GTI S.A. Domestic -34%(VRG S.A.) International -65%

Total -54%

GLAI S.A. Domestic +15%(Consolidated, International -27% pro-forma) Total +0%


GOL Webcast 1Q07

2007E Capacity Breakdown 2007E Capacity Breakdown

2007 Domestic ASK Growth

-34%

+33%+19-21%+25%

Others, net Industry

2007 Domestic ASKs and RPKs (billions)

24

4

39

67

18

2

25

46

Others, net Industry

ASK RPK

+35%

+12%

+13-15%

Growth in RPKs (y-o-y)

-41%


GOL Webcast 1Q07

Net RevenuesNet Revenues

Net RevenuesR$ MM

Stimulating Higher Volumes (1Q07 vs 1Q06)

RPK: +59.6%Average Fleet: +53.0%ASK: +61.5%Load factor: -0.8 p.p. → 69.8%

Driving Fares Lower (1Q07 vs 1Q06)

Average Fare: -21.8%Yield: -26.4%RASK: -25.3%

Growing Ancillary Revenues (1Q07 vs 1Q06)

R$ 65.9MM (98.8% increase over 1Q06)80%+ Contribution margins

1Q07

863.01,041.3

+20.7%

1Q06LowerCosts

HigherLoad Factors

LowerFares

HigherProfit

Growth


GOL Webcast 1Q07

Infrastructure

Airports

Airways

R$ 3 bn to be invested in airport infrastructure until 2010Projects completed or underway in CGH, GRU, BSB, SDU, POA~500 controllers by the end of 2007~66 additional controllers by May-June

Flight Cancellations

Ticket Sales (mm)

Demand Suppression

Dec6%

Jan4%

Feb14%

Mar3%

Current Operating ChallengesCurrent Operating Challenges

Improvements

Dec1.3

Jan1.0

Feb1.5

Mar1.2


GOL Webcast 1Q07

CASK(R$ cents)

1Q06 1Q07

EBITDAR R$ million

1Q06 1Q07 1Q06 1Q07

RASK(R$ cents)

EBITDAR Margin

Profitability - 1Q06 x 1Q07Profitability - 1Q06 x 1Q07

302.8 248.9

19.88

14.85

-25.3%

-17.8%

14.73 13.06

CASK Ex-Fuel -10.8%

-11.3%

35.1%24.0%

1Q06 1Q07

5.86 5.15

-12.1%

Fuel ASK

USGAAP


GOL Webcast 1Q07

Net Financial ResultsNet Financial Results

Investment of Higher Cash Balances• US$ 862.6 of cash invested • Average earning rate of 12.7% in BRL

Increase in Long-term Financing• Increase in average maturity to 6.3y• Average interest rate of 7.3% in USD

Financial Expense (R$ MM)

Financial Income (R$ MM)

1Q07 Net Financial Results: R$34.6 MM

1Q071Q06

1Q07

3.3

27.0+728.2%

1Q06

34.088.6+160.8%


GOL Webcast 1Q07

Net Income CompositionNet Income Composition

Net Income1Q07

Net Income1Q06

TaxesNet

Financial Results

Net Revenues Fuel Costs

Commercial Expenses

Other Operating Expenses

-35.2%

Salary Expenses

1Q07 EPS: R$0.59/shareUS$0.29/ADSNet Income Margin: 20.8% Net Income Margin: 11.2%

116.6179.8

-50.6

+9.8

+178.3

-22.7

-107.0

-142.1+25.7

R$ million USGAAP


GOL Webcast 1Q07

Cash Flow EvolutionCash Flow Evolution

Operating Activities

4Q06Cash, Cash

Equivalents and Short-term

Investments: 912.8

Net Increasein Cash (1Q07)

Investing Activities

Financing Activities

1Q07Cash, Cash

Equivalents and Short-term

Investments: 1,962.3+256.0

-25.8

-188.5

+470.3

R$ million USGAAP


GOL Webcast 1Q07

VRG AcquisitionVRG Acquisition

Consideration:Total amount: R$ 275MM

• Cash: R$ 98MM• Shares: 6.1MM

Rights Offering:Shares: 2.5MMPrice:

• R$ 60.81 / share• US$ 31.44 / ADS

Record Dates:• PN Shares: April 11, 2007

• ADSs: April 19, 2007

Subscription Periods:• PN Shares: April 11 - May 21, 2007

• ADSs: April 23 - May 16, 2007


GOL Webcast 1Q07

Low-Cost Operating PlatformLow-Cost Operating Platform

Modern all 737 fleet

Direct flights

Mileage program

In-board service

Business / Corporate

Modern all 767 fleet

Dual-class service

High–traffic routes

Prime destinations

Mileage program, lounges

Low fares

Differentiated domestic services

Domestic International

Innovative international servicesVRG S.A.


GOL Webcast 1Q07

OpportunitiesOpportunities

Improved Revenues

Complimentary route networks; limited overlap

Optimize route network; maximize aircraft utilization

More effective customer segmentation

Accelerated growth opportunities

Improved scale

“Smiles” loyalty program - base of almost 6 million users

Fleet commonality; maintenance and cost synergies

Upgrade long haul - 767s better suited

Commercial costs

IT / systems

Leverage of fixed costs

ReducedCosts


GOL Webcast 1Q07

Domestic ServiceDomestic Service

FEN

FOR

MCZREC

MAO BEL

POACXJ

BSB

VIX

SDU

CGH

FLN

SSA

CWB

CNF

GRU

GIG

Highly punctual

Direct flights

Differentiated on board service

Business-oriented

Mileage / lounge revenues

Low-cost platform

Differentiated Value Proposition


GOL Webcast 1Q07

International ServiceInternational Service


Low-cost platform

Low fares

Mileage / lounges

Dual-class service

First-rate business + tourist destinations



GOL Webcast 1Q07

Differentiated BrandsDifferentiated Brands

Price

Reliability

Popularizing air travel

First time fliers

57 destinations

Young fleet

Premium

Mileage / lounges

Service

Business-oriented

80-year old brand

Direct flights

Brands attractive to all customer segments

Valu

ePrem

ium

Low-Cost Operating Platform

Best Cost-Benefit Best Cost-Benefit


GOL Webcast 1Q07

MacapMacapáá

FortalezaFortaleza

NatalNatal

RecifeRecife


VitVitóóriaria



AssunAssunççãoão

Panama City

ManausManaus

MaringMaringáá

São LuisSão Luis

Boa VistaBoa Vista




Porto AlegrePorto AlegreRosarioRosario


AracajuAracaju

TeresinaTeresina

GoiâniaGoiânia

PetrolinaPetrolina

CampinasCampinas

Santa CruzSanta Cruz

BelBeléémm

Montevideo

Rio de Janeiro

Sao Paulo


CordobaCordoba

FozFoz do Iguado IguaççuuLondrinaLondrinaCuritibaCuritiba

JoinvilleJoinvilleChapecChapecóó


PalmasPalmas

BrasBrasíílialia

Florianópolis

UberlandiaUberlandiaSao J. Rio PretoSao J. Rio Preto

NavegantesNavegantes

GOL: Superior ResultsGOL: Superior Results

SalvadorSalvador

Porto AlegrePorto Alegre

Rio de Janeiro

Sao PauloCuritibaCuritiba


BrasBrasíílialia

Florianópolis

MacapMacapáá

FortalezaFortaleza

NatalNatal

RecifeRecife


VitVitóóriaria



CampinasCampinas

BelBeléémm

Rio de Janeiro



BrasBrasíílialia

Florianópolis

MacapMacapáá

FortalezaFortaleza

NatalNatal

RecifeRecife


VitVitóóriaria


ManausManaus

MaringMaringáá


TeresinaTeresina

GoiâniaGoiânia

CampinasCampinas

BelBeléémm

Rio de Janeiro



BrasBrasíílialia

FlorianópolisNavegantesNavegantes

MacapMacapáá

FortalezaFortaleza

NatalNatal

RecifeRecife


VitVitóóriaria


ManausManaus

MaringMaringáá

São LuisSão Luis


AracajuAracaju

GoiâniaGoiânia

CampinasCampinas

BelBeléémm

Rio de Janeiro

Sao Paulo


CuritibaCuritiba


PalmasPalmas

BrasBrasíílialia

FlorianópolisNavegantesNavegantes

MacapMacapáá

FortalezaFortaleza

NatalNatal

RecifeRecife


VitVitóóriaria



ManausManaus

MaringMaringáá

São LuisSão Luis






AracajuAracaju

TeresinaTeresina

GoiâniaGoiânia

PetrolinaPetrolina

CampinasCampinas

BelBeléémm

Rio de Janeiro

Sao Paulo


FozFoz do Iguado IguaççuuLondrinaLondrinaCuritibaCuritiba

ChapecChapecóó


PalmasPalmas

BrasBrasíílialia

Florianópolis

UberlandiaUberlandia

NavegantesNavegantes

2001 2002 2003 2004

2005 2006

Net Revenues:R$0.2 bn

EPS: (R$0.06)


EPS: R$0.36


EPS: R$1.07


EPS: R$2.66


EPS: R$2.90


EPS: R$2.14

2007

Net Revenues (E):R$6.1bn

EPS: R$4.20 - R$4.70


GOL Webcast 1Q07

Accelerated Growth OptionsAccelerated Growth Options

+ Low cost

+ Balance sheet strength

+ Liquidity

+ Growth options

Brazil and South

AmericaLow-fare

Short-haul

Brazil and South

AmericaLow-fare

Short-haul

+ New slots and route

rights

+ New customer segments

+ New ancillary revenue sources

- Loyalty program revenues- Cargo revenues- Installment payment revenues

- Premium travelers- Business travelers- International tourists

First rate destinations

- CGH, GRU, GIG, SDU, BSB, Heathrow, JFK, etc.

- Synergies- Increased volumes- Better yield management



GOL Webcast 1Q07

Fleet PlanFleet Plan

Fleet plan to facilitate profitable growth and reduce costs

Order for 121 737-800NGs

737 – 800s 737 – 700s 737 – 300s737 – 800 SFPs767 – 300s

Seat CAGR 2006-2012 = 11%

102

119 121131

139152

8V 14V 16V 18V 20V 22V24G

33G49G

65G78G

86G

12G

13G

11G

7G

6G5G

5V

7V

9V

11V

13V15V

30G

28G

21G

20G10G

10G

4V

8V

10V12V

14V

7G

12G

14G9V

8V

0

20

40

60

80

100

120

140

160

180

2007E 2008E 2009E 2010E 2011E 2012E


GOL Webcast 1Q07

Share Performance: (1)

• GOL ADR x XAL +6.9%• GOL ADR x Tier 1 LCCs (2) -5.9%• GOLL4 PN x IBovespa -17.2%

Trading Volume: (1)

• GOL ADR – Avg. Daily US$ 30 MM• GOLL4 PN – Avg. Daily R$ 37 MM

(1) From January 1 to April 17, 2007.(2) Tier 1 LCCs: Southwest, Ryanair, JetBlue and West Jet

Relative Performance and LiquidityRelative Performance and Liquidity


GOL Webcast 1Q07

Industry Benchmarks – LTM 1Q07(1)Industry Benchmarks – LTM 1Q07(1)

(1) LTM March 31, 2007 for GOL; FY 2006 for other airlines(2) Translated to US Dollars at average exchange rate R$2.1082 / US$1.00 €0.8121 / US$1.00 e CAD$1.1342 / US$1.00(3) Projected 2-year EPS Growth (CAGR) (Source: Bloomberg Estimates)(4) P/E = Share prices as of April 17, 2007 divided by EPS (Source: Bloomberg Estimates)(5) P/E 2007 divided by 2-year EPS projected growth (CAGR) (Source: Bloomberg Estimates)

Net Income (US$ MM)

EBITDAR (US$ MM)

EBITDAR Margin

P/E 2007(4) (x)

Net Income Margin

P/E 2008(4) (x)

Projected EPS Growth(3)

PEG Ratio(5) (x)

240 (2)

479 (2)

16.2

25.4%

12.7%-1

381

30.9

16.1%

-0.0%499

1,608

15.5

17.7%

5.5%505 (2)

853 (2)

29.1

31.9%

18.9%102(2)

383 (2)

15.6

24.7%

6.5%

11.2 16.615.121.7 13.7

20% NM19%24% 26%

0.3 1.8 0.5 NM 5.7

LTM Dividend Yield 1.6% - 0.1% - -


GOL Webcast 1Q07

Industry BenchmarksIndustry Benchmarks

2007 P/E multiple(1)

Discount16.2x 25.7x25.4x23.6x

Tier 1 LCC(2)GOL Infrastructure(3)

BrazilConsumer(4)

Brazil

The lowest cost providerThe best balance sheetThe highest liquidityThe most growth options

GOL:

Translates into superior earnings

growth

(1) P/E = Share prices as of April 16, 2007(2) Southwest, Ryanair, West Jet and JetBlue(3) ALL, CCR and OHL(4) Guararapes, CBD, AmBev and Lojas Americanas

- 37%- 36%- 31%


GOL Webcast 1Q07

Looking ForwardLooking Forward

Excellent Growth Prospects

+/- 80% increase in ASKs+/- 71% load factorsYields +/-R$20 centsNon-fuel CASK +/- R$8.2 cents

Guidance

Earnings per Share

Net Revenues

ASK Growth

2007 (previous)

R$ 5.20 - R$ 5.65

+/-R$ 5.5 billion

+/- 50%

CASK ex-fuel +/- R$ 8.5 cents

Operating Margin +/- 23%

Load Factor +/- 75%

2007 (revised)

R$ 4.20 - R$ 4.70

+/-R$ 6.1 billion

+/- 80%

+/- R$ 8.1 cents

+/- 20%

+/- 72%

2Q07


GOL Webcast 1Q07

GOL’s Competitive StrengthsGOL’s Competitive Strengths

Proven management

Proven management

Low fares and high profitability

Low fares and high profitability

Strong brandsStrong brands

Efficient sales distribution

Efficient sales distribution

Highly productive workforce

Highly productive workforce

Modern and efficient fleetModern and efficient fleet

Lowest-cost provider

Lowest-cost provider

Quality customer service

Quality customer service

Unique cultureUnique culture

This presentation contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of GOL. These are merely projections and, as such, are based exclusively on the expectations of GOL’s management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in GOL’s filed disclosure documents and are, therefore, subject to change without prior notice.

1Q07 Results Presentationri.voegol.com.br/arquivos/Gol_Apresentacao_1T07_Eng.pdfGTI S.A. Domestic...

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Transcript of 1Q07 Results Presentationri.voegol.com.br/arquivos/Gol_Apresentacao_1T07_Eng.pdfGTI S.A. Domestic...