SAS releases SAS Group’s Annual Report 2011 and provides new financial information
– Strong cash position
– Credit facilities renegotiated to improve flexibility
– Proposal to annual general meeting to change financial year
– Unrecognized actuarial losses increased by SEK 1.8 billion
The Board of Directors of SAS AB has held a meeting where the annual report for 2011 for SAS Group and the parent company SAS AB was presented and approved.
The annual report is now available on the Internet, www.sasgroup.net under Investor Relations/Reports and presentations/Annual reports, and will be printed and distributed to shareholders who have notified the Company of their interest to receive a copy of the annual report.
Strong cash position
In September 2011, SAS launched the new 4Excellence strategy with the aim of achieving Excellence in four core areas – Commercial Excellence, Sales Excellence, Operational Excellence and People Excellence. SAS announced in February 2012 that the plan is accelerating and that cost and revenue measures corresponding to SEK 5 billion are being implemented in 2012-2013.The challenging nature of the prevailing economic climate in combination with the earnings effect of 4Excellence being realized in the latter part of 2012 mean that the seasonally weak first quarter will also remain weak in 2012.
However, the first two months of the year have been trading above plans and SAS cash position is substantially ahead of plan.
Renegotiation of Credit Facilities
In the light of the Spanair bankruptcy and the current business environment, SAS has reached an agreement with our banks to ensure further flexibility in our financing. We have agreed with the banks participating in our Revolving Credit Facility and Bi-lateral facilities to amend the covenants scheme to provide further flexibility. In connection herewith SAS has agreed to provide certain security to support any future drawings. Based on its business outlook and strong cash position, SAS currently does not foresee use of the facilities and they remain an integral part of SAS strong financial preparedness position.
Proposal to the annual general meeting (AGM) to change financial year
The Board proposes that §8 of the articles of association be amended so that the Company’s financial year shall comprise the period 1 November – 31 October, instead of the calendar year, and that the current financial year be shortened and thus will comprise the period 1 January 2012 – 31 October 2012. The purpose of the change is for the financial year to follow the traffic program (winter/summer), in order to improve external reporting and internal governance, and to decrease internal administration. The resolution is contingent upon a permit from the Swedish Tax Agency. As a consequence of the change, SAS will apply the expected changed accounting rules regarding pensions (IAS19) in the financial year starting 1 November 2013.
For further information, see the full notice for the AGM available on www.sasgroup.net
Unrecognized actuarial losses increased by SEK 1.8 billion
In June 2011, the IASB (International Accounting Standards Board) published amendments to IAS 19 Employee Benefits. The amendments to IAS 19 have not yet been adopted by the EU, but a decision is expected during spring 2012. Among other features, the revised IAS 19 no longer permits the deferral of the recognition of certain actuarial gains and losses (the ”corridor approach” has been removed). Instead, all actuarial gains and losses are to be recognized immediately in other comprehensive income. As a result of the amendments, the accumulative unrecognized actuarial gains and losses (unrecognized actuarial gains and losses and plan changes) will be recognized in shareholders’ equity, which will have a significant negative effect on the Group’s shareholders’ equity. The parent company SAS AB’s recognized shareholders’ equity will not be affected by this amendment.
Due to a weak stock market development and lowered discount rates in Sweden and Norway, actuarial gains and losses increased by approximately SEK 1.8 billion compared with the preceding year. The proposed amendments will not have any effect on SAS’ cash position.
For further information, please contact
Sture Stølen, Head of SAS Group Investor Relations, through SAS Press Jour, +46 8 797 2944
SAS discloses this information pursuant to the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. The information was provided for publication on 15 March 2012, at 4.00 pm CET.