Slide 1: 1Q23 Earnings Results
1Q23 Earnings Results May 15, 2023
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is only a summary and does not purport to be complete. This presentation has been prepared solely for informational purposes and should not be construed as financial, legal, tax, accounting, investment or other advice or a recommendation with
Slide 3: Agenda
• Unique Business Model 1Q23 Earnings Call • 1Q23 Financial Highlights Agenda • Business Outlook • Permanent Restructuring Plan Update 3
Slide 4: Unique Business Model
Unique Business Model • Unparalleled network • 158 destinations served, over 3x competition • Leader in 93% of our routes, only carrier in 80% • Brazil’s largest airline in daily departures • Flexible, high-efficiency fleet • Fast-growth, high-margin business units 4
Slide 5: Azul's Valuable Business Units
Azul’s Valuable Business Units Gross Billings Gross Billings +2x +4x 2019 2023E 2019 2023E Revenue New Business Unit +2.5x • Maintenance, repairs, and overhauls • Leverages Azul’s expertise, operational scale and fleet flexibility to offer high-quality technical services to external customers 2019 2
Slide 6: 1Q23 Financial Highlights
1Q23 Financial Highlights Record Revenue Record 1Q Yield Record 1Q RASK R$4.5 billion R$48.50 cents R$41.47 cents EBIT EBITDA R$462.4 million R$1.0 billion 10.3% margin 23.0% margin Azul’s unique business model delivering superior operating and financial results Increasing contribution from doubled
Slide 7: Record Revenue Driven by Healthy Demand Environment
Record Revenue Driven by Healthy Demand Environment Net Revenue RASK (R$ million) (R$ cents) 2x +35.6% 4,478 41.47 35.23 30.58 3,193 2,542 1Q19 1Q22 1Q23 1Q19 1Q22 1Q23 Strong demand environment leading to growth in both capacity and unit revenues 7
Slide 8: Increasing Profitability Even at Higher Fuel Prices
Increasing Profitability Even at Higher Fuel Prices Fuel Price EBITDA¹ (R$) (R$ million) +42.3% +116.7% 1,030 5.25 4.25 724 593 2.43 1Q19 1Q22 1Q23 1Q19 1Q22 1Q23 EBITDA increased 42% versus 1Q19, even with fuel prices 117% higher ¹ Adjusted for non-recurring items 8
Slide 9: Resuming Azul's Long-Running EBITDA Expansion
Resuming Azul’s Long-Running EBITDA Expansion EBITDA (R$ million) ~5,500 3,623 3,230 2,644 2,289 1,793 1,591 1,367 1,251 1,213 501 226 265 58 -84 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E Resuming Azul’s consistent margin expansion since launch, only interrupted by
Slide 10: Favorable Trends in Jet Fuel Prices
Favorable Trends in Jet Fuel Prices Azul’s Fuel Price (R$ per liter) 6.50 6.05 6.00 5.50 5.00 4.70 4.50 Current HOA curve indicates fuel prices in 4Q23 4.00 29% lower than 1Q23 3.50 3.73 3.00 2.50 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Actual Current HOA curve as of May.2023 Bud
Slide 11: Conservative Unit Revenue Assumptions
Conservative Unit Revenue Assumptions RASK Evolution (R$ cents) Omicron 42.29 42.72 41.47 40.29 39.46 35.23 33.57 32.09 31.20 31.38 30.58 30.11 28.79 27.65 27.88 25.47 24.86 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23E 3Q23E 4Q23E Robust demand leading t
Slide 12: Guidance Support
Guidance Support Expected EBITDA in 2023 (R$ billion) 0.4 0.4 1.0 0.3 1Q23 2Q23E 3Q23E 4Q23E Incremental EBITDA from lower fuel prices vs. 1Q23 EBITDA guidance consistent with annualized 1Q result, conservative fuel price projection and seasonality 12
Slide 13: Significant Reduction in Lease Payments
Significant Reduction in Lease Payments Annual Schedule of Lease Payments (Excludes new aircraft entering fleet – R$ billion) -R$1.8 bn -R$1.2 bn 4.4 4.1 -R$0.9 bn -R$0.8 bn 3.5 -R$0.8 bn 3.2 2.9 2.9 2.6 2.6 2.4 2.1 2023 2024 2025 2026 2027 Pre-restructuring Post-restructuring Reduction in lease pay
Slide 14: Significant Reduction in Lease Liabilities
Significant Reduction in Lease Liabilities Nominal Value of Lease Payments Present Value of Lease Payments¹ (R$ billion) (R$ billion) -R$5.4 bn -R$4.1 bn 26.1 14.5 20.6 10.4 As reported Post-restructuring As reported Post-restructuring estimates estimates Restructuring plan projected to reduce lease
Slide 15: Sequential Reduction in Leverage
Sequential Reduction in Leverage Leverage (Net debt¹/ LTM EBITDA) 11.2x 5.7x ~5.2x ~4.6x ~3.5x 3.1x ~3.0x 2019 2021 2022 1Q23 as reported 1Q23 post 2023E 2024E restructuring estimate Organic reduction in leverage from strong business model, accelerated by restructuring plan ¹ Excludes convertible de
Slide 16: Equity Instrument Lock-up and Vesting Periods
Equity Instrument Lock-up and Vesting Periods Share Lock-up and Vesting (Estimated shares to be issued – million) 27.8 Lock-up period Mid point (2Q26) 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 4.3 4.3 3.2 3.2 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 4Q26 1Q27 2Q27 3Q27 4Q2
Slide 17: Equity Upside
Equity Upside 1Q23 Post-restructuring Multiple as reported estimates Gross Debt¹ (R$ million) 21,621 19,791 Cash² (R$ million) 2,643 2,643 Equity Value (R$ million) 5,464 15,602 2023 Expected EBITDA (R$ million) 5,500 5,500 Outstanding shares (million) 425 515 Multiple 4.2x 6.5x Stock Price R$12.86³
Slide 18: Creating Capital Structure and Cash Generation Compatible with Superior Business Model and Profitability
Creating Capital Structure and Cash Generation Compatible with Superior Business Model and Profitability Unrivaled Superior Industry-Leading Robust Network Customer Service Profitability Cash Generation Flexible, Operational Experienced Strengthen Fuel-Efficient Fleet Excellence Leadership Capital S
Slide 19: Azul's Inimitable and Passionate Crewmembers
Azul’s Inimitable and Passionate Crewmembers 19
Slide 20: Investor Relations
INVESTOR RELATIONS Contact us +55 11 4831-2880 invest@voeazul.com.br www.voeazul.com.br/ir