Qantas Airways Limited · ASX:QAN
Qantas Airways — FY2016 Earnings Presentation
23 slides from Qantas Airways's earnings presentation, Aug 24, 2016
Slide 1: Qantas Airways Limited FY16 Results Supplementary Presentation
For personal use only Qantas Airways Limited FY16 Results Supplementary Presentation 24 August 2016 ASX: QAN US OTC: QABSY
Slide 2: Group Performance
For personal use only Group Performance
Slide 3: Key Metrics
Key Metrics For personal use only FY16 FY15 VLY%6 Underlying PBT1 ($M) 1,532 975 57 Statutory profit before tax ($M) 1,424 789 80 Statutory earnings per share (c) 49.4 25.4 94 ROIC (%) 22.7 16.2 6.5pts Revenue ($M) 16,200 15,816 2.4 Transformation benefits realised to date ($M) 1,655 1,098 51 Operat
Slide 4: Underlying Income Statement Summary
Underlying Income Statement Summary For personal use only $M FY16 FY15 VLY % Increased revenue with Transformation initiatives and Net passenger revenue 13,961 13,604 2.6 additional flying activity offsetting decline in unit revenue Weaker yields with international air freight demand below Net freig
Slide 5: Items Not Included in Underlying PBT
Items Not Included in Underlying PBT1 For personal use only $M FY16 FY15 Total ineffectiveness of and non-designated derivatives 15 39 relating to other reporting periods Gain on sale of Sydney Airport Terminal 3, announced in Net gain on sale of property, plant and equipment (201) - August 2015 Red
Slide 6: Reconciliation to Underlying PBT
Reconciliation to Underlying PBT1 For personal use only $M FY16 FY15 Statutory Other items Ineffectiveness Underlying1 Statutory Other items Ineffectiveness Underlying1 not included in relating to not included in relating to Underlying other reporting Underlying other reporting PBT periods PBT perio
Slide 7: Revenue Detail
Revenue Detail For personal use only Net passenger revenue up 3% Revenue ($B) • Additional capacity of 5% driven by utilisation • Group unit revenue decreased by 2% • Favourable impact of FX 2% 16.2 15.8 Net freight revenue down 9% • Conclusion of favourable Australian air Express legacy agreements
Slide 8: Expenditure Detail
Expenditure Detail For personal use only Fuel costs down 17% • 5% increase in flying activity • 19% reduction in effective AUD fuel price1 Expenditure ($B) • Improvement in fuel efficiency from Qantas Transformation fuel initiatives Manpower and staff-related up 7% 14.6 1% 14.4 • Operational head co
Slide 9: Cash Flow
Cash Flow For personal use only $M FY16 FY15 VLY % • Strong operating cash flows of $2.8 billion Operating cash flows 2,819 2,048 38 – Includes $185m future income deferred on balance sheet from the sale of Investing cash flows (excluding aircraft operating Sydney Airport Terminal 3 (1,145) (944) 21
Slide 10: Invested Capital Calculation
Invested Capital Calculation For personal use only $M FY16 FY15 • Refinanced 29 operating leased aircraft to unencumbered owned aircraft3 Receivables (current and non-current) 929 1,093 – Decrease in capitalised operating lease Inventories 336 322 assets Other assets (current and non-current) 353 42
Slide 11: Reconciliation of Sources and Uses
Reconciliation of Sources and Uses For personal use only $M FY16 FY15 • Our Financial framework considers aircraft operating leases as part of net debt Cash flows from operating activities 2,819 2,048 – Principal portions are debt reduction Principal portion of aircraft operating lease rentals 273 2
Slide 12: Net Debt
Net Debt For personal use only $M FY16 FY15 VLY • Net debt reduced by $754m Current interest bearing liabilities on balance sheet 441 771 (330) • Net debt reduction impacted by FX and mark-to-market movements Non-current interest bearing liabilities on balance sheet 4,421 4,791 (370) Fair value of h
Slide 13: Improvement in Total and Ex-Fuel Unit Cost
Improvement in Total and Ex-Fuel Unit Cost For personal use only • Ex-fuel unit cost1 improvement of 3% from Qantas Transformation benefits – Total unit cost additionally benefited from a reduction in fuel expense C/ASK FY16 FY15 VLY % Total Unit Cost2 7.05 7.54 6 Excluding: • Fuel (2.18) (2.74) • C
Slide 14: Qantas Transformation Scorecard
Qantas Transformation Scorecard only Target Progress to Date Metric Timeframe $2.1b gross benefits $1.66b benefits realised Accelerated FY17 use Transformation >10% Group ex-fuel expenditure reduction1 Ex-fuel expenditure reduced by 9%2 Benefits 5,000 FTE reduction FY17 4,605 FTE reduction3 ACHIEVIN
Slide 15: Group Operational Information
For personal use only Group Operational Information
Slide 16: Fleet at June 2016
Fleet at 30 June 2016 For personal use only Aircraft Type FY16 FY15 Change A380-800 12 12 - Net addition of 4 aircraft in FY16: B747-400 5 6 (1) B747-400ER 6 6 - • 7 aircraft deliveries4: A330-200 18 17 1 – 3 x B787-8 A330-300 10 10 - – 2 x B717 B737-800NG 75 75 - Total Qantas 126 126 - – 1 x F100 B
Slide 17: Supplementary Segment Information
For personal use only Supplementary Segment Information
Slide 18: Jetstar Group
Jetstar Group For personal use only Jetstar Group – Network of Routes1 & Aggregate Revenue ($B)2 5 4 3 6 151 179 2 5 129 130 109 115 96 98 67 82 1 59 31 39 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Destinations Aggregated Revenue ($B) 4 2 BUSINESS OWNERSHIP3 LAUNCH AIRCRAFT
Slide 19: Jetstar Domestic
Jetstar Domestic For personal use only • Earnings1 up 62% to $242m, underpinned by brand strength and Jetstar Domestic FY16 FY15 VLY % network scale ASKs M 18,660 18,215 2.4 − Unit revenue + 4%2 led by strong first half performance RPKs M 15,565 15,042 3.5 − ‘Smart Retailing’ driving +3% growth in a
Slide 20: Jetstar International (Australia outbound and New Zealand)
Jetstar International (Australia outbound and New Zealand) For personal use only • Strong improvement in earnings1 with unit cost reduction and Jetstar International FY16 FY15 VLY % (excl. Jetstar Asia & Jetstar New Zealand) strategic growth into core markets ASKs M 20,104 18,317 9.8 – Complete B787
Slide 21: Jetstar Airlines in Asia
Jetstar Airlines in Asia1 For personal use only • Earnings2 improvement of $85m underpinned by growing scale • First full-year profit2 for Jetstar Japan, largest Japanese LCC in market3 − International expansion, benefits of scale from maturing business • Increased profit2 for Jetstar Asia (Singapor
Slide 22: Overview of Qantas Loyalty Value Chain
Overview of Qantas Loyalty Value Chain For personal use only Business Model Sources of Value _Coalition Loyalty_ _Adjacent Businesses_ Marketing Revenue: percentage of price per point recognised upfront for the service Loyalty provides its Core earnings stream Leveraging core to Earn Partners. An a
Slide 23: Disclaimer & ASIC Guidance
Disclaimer & ASIC Guidance For personal use only This Presentation has been prepared by Qantas Airways Limited (ABN 16 009 661 901) (Qantas). Summary information This Presentation contains summary information about Qantas and its subsidiaries (Qantas Group) and their activities current as at 24 Augu