Financial report 2012
FINNAIR 2012 / KEY FIGURES / CEO’S REVIEW / STRATEGY / BOARD OF DIRECTORS’ REPORT / FINANCIAL STATEMENTS / GOVERNANCE Financial report 2012 Contents Finnair in 2012 1 Key figures 2 CEO’s review 4 Strategy 5 Board of Directors’ Report 7 10 Finnair fmeet 14 Shares and shareholders 18 Financial indicators 2008–2012 19 Calculation of key indicators IFRS Financial Statements, 1 January–31 December 2012 19 Auditor's Report 47 Business risks 48 Corporate Governance Statement 2012 49 Finnair Plc Remuneration Statement 2012 56 Board of Directors 61 Executive Board 62 Information for the shareholders 63 Contact information 64 Photos: Asian strategy and Partnerships on page 2 by Tim Bird. Other photos by Finnair.
FINNAIR 2012 / KEY FIGURES / CEO’S REVIEW / STRATEGY / BOARD OF DIRECTORS’ REPORT / FINANCIAL STATEMENTS / GOVERNANCE 1 / 64 Finnair’s year 2012 fmeet investments of coming years still require signifjcant Code of Conduct Finnair revised its Code of Conduct in 2012 and will organise profjtability improvements, and for this reason Finnair related training for stafg during 2013. Top management's launched an additional cost-reduction program of 60 special bonuses and the CEO's housing transaction sparked million euros in October 2012. a lively discussion both in the media and inside Finnair on ethical business behaviour. Return to profitability Safe and punctual airline Finnair was one of the top companies in its industry in Finnair improved its operational quality and was one of terms of unit revenue development, and its cost-reduc- the top airlines in the world measured by all operational tion program brought results. The return to profjtability indicators. According to JACDEC’s* statistics, Finnair was was a great achievement in a challenging environment the world’s safest airline in 2012. and the fjrst step towards attaining the company’s EBIT Partnerships target of 6%. Finnair and Flybe expanded their cooperation in Europe- Best in Northern Europe an traffjc when the operation of Finnair’s Embraer traffjc Finnair was the only Nordic airline classifjed in the four was transferred to Flybe. Finnair and LSG Sky Chefs Group star category by Skytrax. Passengers also voted Finnair made a fjve-year partnership agreement on catering ser- Northern Europe’s best airline at Skytrax World Airline vices, and, in addition, Finnair and SR Technics concluded Awards for a third year in a row. World Airline Awards™ a ten-year agreement on engine and component services. is the most extensive and valued commercial airline rat- ing in the industry. Responsibility Finnair is a leading airline in sustainability reporting and Asian strategy reducing emissions. The company was the fjrst airline to Finnair ofgers the fastest connections between Asia and be included in the Leadership index of the Carbon Disclo- Europe, with more than 200 route pairs. During the sure Project report. The CDP is responsible for the only summer season Finnair fmew a record number of fmights, 77 global climate change reporting system in the world. per week, from Helsinki to Asia. A new route to Chongqing Finnair's Corporate Responsibility Report for 2012 was in China was launched in May. selected as "Investors choice" in the Domestic sustain- ability reporting competition. Xi'an and Hanoi Product renewal In December, Finnair announced that it will open two new Finnair simplifjed the purchase of fmight tickets and ofgers summer destinations, Xi'an in China and Hanoi, Vietnam’s now fjve difgerent ticket types for customers’ individual capital, in June 2013. Finnair is the fjrst airline to begin needs. The Finnair Plus frequent fmyer program was also Structural change and cost-reduction program scheduled fmights between Xi'an and Europe and the fjrst Finnair’s structural change and cost-reduction program renewed to be even more rewarding. In addition, the com- European airline on the route between Hanoi and Europe. progressed well, and Finnair achieved permanent, an- pany published an extensive design cooperation with Ma- nual cost savings of 100 million euros by the end of 2012. rimekko. With the cooperation, Marimekko’s classic prints The company was thus well ahead of its schedule. The will become part of the journey of Finnair's customers. * Jet Airliner Crash Data Evaluation Centre.
FINNAIR 2012 / KEY FIGURES / CEO’S REVIEW / STRATEGY / BOARD OF DIRECTORS’ REPORT / FINANCIAL STATEMENTS / GOVERNANCE 2 / 64 Key figures Turnover Operational result, EBIT* Operat ing pro fi t , EBIT Operational EBITDAR* € million € million % € million % € million 44.9 1.4 2 3,000 50 2 50 250 241.9 35.5 2,449 2,500 0 0 0 0 200 1.8 2,000 -50 -2 -50 -2 150 1,500 -100 -4 -100 -4 100 1,000 -150 -6 -150 -6 50 500 -200 -8 -200 -8 0 -250 -10 -250 -10 0 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12 08 09 10 11 12 % of turnover % of turnover * EBITDAR excluding changes in the fair values * Operating result excluding changes in the fair values of derivates and in the value of foreign currency of derivates and in the value of foreign currency denominated fmeet maintenance reserves, non-recurring denominated fmeet maintenance reserves, non-recurring items and capital gains. items and capital gains. Result before taxes Re t u r n on equity (ROE) and Equity ratio, gearing and adjusted gearing, % Airline Business: unit revenue and unit cost return on capital employed (ROCE), % (cents/Available seat kilometre) % € million % Cents 120 7.0 6.58 50 5 6.49 3.0 16.5 100 1.5 6.0 76.8 0 0 80 4.50 5 .0 60 4 .0 -50 -5 35 .7 40 3.0 20 2.0 17.6 -100 -10 0 1.0 -20 0 -150 -15 08 09 10 11 12 RAS K* CASK** CASK excl. 08 09 10 11 12 08 09 10 11 12 Equity ratio Fuel*** Return on Equity (ROE) Gearing 2011 Return on Capital Employed (ROCE) Adjusted gearing 2012 * Revenue per Available Seat Kilometre ** Cost per Available Seat Kilometre *** Cost per Available Seat Kilometre excluding fuel
FINNAIR 2012 / KEY FIGURES / CEO’S REVIEW / STRATEGY / BOARD OF DIRECTORS’ REPORT / FINANCIAL STATEMENTS / GOVERNANCE 3 / 64 Passenger traffjc structure, % Distribution of passenger revenue, % Number of employees 31 December 2012 Finnair’s customer satisfaction with flight as a whole in 2012 % % % 10,000 100 8,000 80 6,368 6,000 60 4,000 40 2,000 20 0 0 08 09 10 11 12 Inter- Inter- Europe Europe Asia 5 0% Asia 45% continental continental Business Economy Europe 29% Europe 34% Business Economy Class Class Class Class Leisure 12% Leisure 10% Domestic 4% Domestic 7% Very poor Poor Fair Good Very good North Atlantic 5% North Atlantic 4% Finna ir Fuel consumption 1999–2017 Jet fuel consumption D ir e ct CO 2 emissions in passenger traffjc litres/seat/100 km tonnes tonnes 4 1,000,000 3,000,000 2 ,473,304 785,176 2,500,000 3 750,000 2,000,000 2 500,000 1,500,000 1,000,000 1 250,000 500,000 0 0 0 1 999 200 9 2 017 08 09 10 11 12 08 09 10 11 12
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