Air Asia Co. Ltd. · TWSE:2630
Air Asia — Investor Presentation (August 2019)
31 slides from Air Asia's investor presentation, Aug 29, 2019
Slide 1: AIR ASIA Company Limited 2019 Investor Conference
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Slide 2: Disclaimer
Disclaimer The information contained in this presentation and its accompanying announcements, including content relating to business outlooks, financial operations, and business forecasts, is based on information derived from internal corporate data and external economic developments as a whole. The
Slide 3: Agenda
Agenda Financial Results Commercial Business Outlook Military Business Outlook
Slide 4: Financial Results
Financial Results AIL ASTA eee Cor jompany Limited — —
Slide 5: Statements of Comprehensive Income
Statements of Comprehensive Income (In NT$ thousands) 1H19 Year 2018 Items 1H19 1H18 over Year 2018 Year 2017 over 1H18 Year 2017 Net Revenue 1,825,705 1,032,257 793,448 2,719,354 2,417,744 301,610 Operating Costs 1,637,879 917,084 720,795 2,407,030 2,023,450 383,580 Gross Margin(%) 10.3% 11.2% -0.9
Slide 6: Revenue Analysis
Aircraft eats 51.5% 62.5% Commercial Aircraft Military Aircraft Helicopter Soueney 9 Growth Rate 55% 1,200,000 Growth Rate 114% 400,000 » Growth Rate 24% 300,000 -~ 1,000,000 250,000 ~ 300,000 — 800,000 - 200,000 -~ 150,000 600,000 - 200,000 - 100,000 — 400,000 , 100,000 - 50,000 -~ 200,000 - (NTS t
Slide 7: Revenue Analysis
Revenue Analysis Year 2017 Revenue Year 2018 Revenue Helicopter ; 25.9% Helicopter 50.1% Military 7 Aircraft Military 241% Aircraft 56.2% Commercial Aircraft Military Aircraft Helicopter 700,000 - 2,000,000 + 1,400,000 - 600,000 - Growth Rate 162% 1,200,000 Growth Rate -22% 500,000 - * 1,500,000 - 1
Slide 8: Balance Sheets & Key Indices
Balance Sheets & Key Indices (In NT$ thousands) Items 1H19 1H18 Year 2018 Year 2017 amount % amount % amount % amount % Cash and cash equivalents 135,804 3 63,143 2 83,444 3 98,211 4 Accounts Receivable 1,439,859 33 929,977 34 1,135,934 33 724,162 34 Inventories 1,420,731 33 606,561 23 1,036,084 30
Slide 9: Contract Summary
Contract Summary Military Commercial Helicopter Aircraft Aircraft OH-58D Helicopter maintenance project Government Owned Contractor National Airborne Operated (GOCO) program for the Duration:2017-2024 Service Corps, MOI Air Force 2nd Logistics Command. Amount: NT$1.6 King Air 200 Fleet billions Dura
Slide 10: Commercial Business Outlook
Commercial Business Outlook
Slide 11: Industry Trend
Industry Trend 40% of new fleet will be delivered to Asia-Pacific, 2019-2038 Asia-Pacific 17,390 Deliveries Market Value: USD2,830B Single Aisle 13,030 Deliveries Market Value: USD1,353B Source: Boeing Commercial Market Outlook 2019-2038
Slide 12: Industry Trend
Industry Trend 2019-2029 Fleet growth by region CAGR: Compound annual growth rate Source: Oliver Wyman Global Fleet & MRO Market Forecasts
Slide 13: Industry Trend
Industry Trend The growth rate of MRO market in the next decade CAGR：Compound annual growth rate Source: Oliver Wyman Global Fleet & MRO Market Forecasts
Slide 14: Industry Trend
Industry Trend According to Oliver Wyman forecasts, narrow-body aircraft fleet will increase significantly in the next decade. It will provide huge business opportunities for narrow-body aircraft MRO. MRO market forecast by aircraft class in the next decade CAGR：Compound annual growth rate Source: O
Slide 15: Commercial Aircraft
Commercial Aircraft Maintenance needs are growing Increase in MRO in the Asia-Pacific Region Customers are upgrading to newer aircraft 737 Classics 737 NG 737 Max A320 CEO A320 NEO Bombardier Dash 8-Q300 Dash 8-Q400 727 Retiring MD series are about to Phase out
Slide 16: Marketing/Sales Strategy
Marketing/Sales Strategy Increase market share of Traditional airline and Flag Carrier Miniating the business for aging aircraft Use LCC from South-East Asia to fulfill remaining un- used production capacity Priority Markets are North-East Asia & Russia, Secondary Market is South-East Asia
Slide 17: Marketing/Sales Strategy
Marketing/Sales Strategy Long-Term Maintenance Contracts N/E Asia Russia - Aurora Japan - Peach Korea - Eastar Jet, Tway, Jeju S/E Asia Vietjet Group (Vietnam, Thailand) AirAsia Group (Philippine, other AOC are under negotiation) Thailand - Nok Cambodia - Cambodia Airways Indonesia - Airfast
Slide 18: Increase Full Service Carrier and Flag Carrier Market Share
Increase Full Service Carrier and Flag Carrier Market Share Main Target customers are North-East Asia and Russia Far-East Region FSC and Flag Carrier tend to use the aircraft for longer duration. Old aircraft has more maintenance work Higher cost for MRO in N/E Asia 4 Major Airlines in Japan & Korea
Slide 19: Increase Full Service Carrier and Flag Carrier Market Share
Increase Full Service Carrier and Flag Carrier Market Share Air Asia’s current FSC/Flag Carrier customer Aurora (Subsidiary of Aeroflot) - Main MRO Asiana Group - Backup MRO JTA - Backup MRO Future Targets Japan Airlines Backup MRO ANA Group Bombardier Dash 8-Q400 Korean Air - 737-800 Asiana Group -
Slide 20: Facing the Rise of LCC in S/E Asia
Facing the Rise of LCC in S/E Asia Within S/E Asia, LCC (Low Cost Carrier) accounts for majority of the growth LCC are looking for volume discount from supplier Salary are relatively lower in S/E Asia, so local MRO have advantage When grown to a large volume of aircraft, some LCC will establish thei
Slide 21: Sales Growth Tactics
Sales Growth Tactics Short-term Goal：Increase number of customer Mid-term Goal ： Increase FSC & Flag Carrier maintenance work Long-term Goal：Create barrier to new entrant Improve service quality - Enhance Training, Digitization, Periodic Quality review meeting with customer Strategic alliance, Build
Slide 22: Sales Growth Tactics
Sales Growth Tactics Bottleneck of 2018 and solution in 2019 Customer retire old aircraft, new aircraft have low maintenance hours, less structural work Solution: Incase customer count Market Segment majority in N/E Asia so face a distinctive high-and-low maintenance seasons Solution: Expand custome
Slide 23: Sales Growth Current Status
Seles Growth current status There is approximately 1,660 aircraft in Asia that Air Asia has capability. The aircraft is owned by 91 different airlines. In 2018 we have visited 43 new customers, and more than 20 in 2019. Due to the characteristic of MRO contract, changing supplier takes time, the eff
Slide 24: A Customer Oriented Culture
A Customer Oriented Culture Customer Oriented Culture
Slide 25: Military Business Outlook
Military Business Outlook a . ‘tom bated = es @ ALDASIA ___.___-._-. 2s i ie east fd A “Company Limited — =
Slide 26: Domestic military aircraft market
Domestic military aircraft market 2019 2020 2021 2022 2023 Short-term Mid-term Long-term NASC UH-60M Air Force GOCO project project F-16 Advanced Air Force Industrial trainer Songshan Army TH-67 project cooperation program base project program Navy S-70C Army M1A2 engine rotor blade overhaul evaluat
Slide 27: Military Aircraft
Military Aircraft Component Division Taichung (GOCO Project) Due to the long lead-time parts to be provided and items are delivered successively, the estimated revenue of the second half will continue to grow. We will keep raising the availability to meet the military’s demand. Electroplating Shop i
Slide 28: Military Aircraft
Military Aircraft Aircraft Maintenance Division Pingdong (GOCO Project) Due to the military mission, aircraft input delayed in the first half. Currently all types of aircraft have been inputted in succession. The second half of the estimated revenue is going to be increased at least 20 millions more
Slide 29: Military Aircraft
Military Aircraft Aircraft Maintenance Division Songshan Air Force Songshan base project：Carrying out the administrative aircraft BH-1900 fleet management and inspection aircraft BD-1900 maintenance. BH-1900 UNIFIS 3000 project ： contract of flight inspection system acquired this year to increase an
Slide 30: Helicopter
Helicopter We fulfill and strive for the military aircraft outsourcing contracts of TH-67, OH-58 and CH-47 fleets. In line with the Government's new southward policy, we are exploring the Southeast Asian market, and building the new capabilities in order to develop new clients. We are exclusive auth
Slide 31: Thank you
eal aaa AIA ASIA AIR ASIA Company Limited Company Limited 2630 Thank you
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