Icelandair Group Hf · OMXICE:ICEAIR
Icelandair Group Hf — Q4 2020 Earnings Presentation
35 slides from Icelandair Group Hf's earnings presentation, Feb 9, 2021
Slide 1: Q4 and 12M 2020 results
Q4 and 12M 2020 results Investor meeting 9 February 2021
Slide 2: Highlights
Highlights Results Liquidity Boeing 737 MAX Outlook for Q4 2020 position strong recertified as safe to fly coming weeks Resurgence of COVID-19 and Total liquidity USD 331.4 Reintroduction of the aircraft Near-term outlook challenging associated travel restrictions in million at year-end into our net
Slide 3: 2020 what a year!
2020 what a year! Bogi Nils Bogason CEO Icelandair Group
Slide 4: We were optimistic at the start of 2020
Number of passengers We were millions 4.4 optimistic 4.0 4.1 4.2 3.7 at the start 3.1 of 2020 2.6 2014 2015 2016 2017 2018 2019 Forecast 2020
Slide 5: Flights were offered to 40 destinations…
Flights were offered to 40 destinations…
Slide 6: … but due to C-19 and related travel restrictions they decreased to four
… but due to C-19 and related travel restrictions they decreased to four
Slide 7: The number of take-offs went down drastically…
2,891 2,736 take-offs take-offs 1,800 January – February March – December 1,600 1,400 1,200 19 Aug 1,000 15 Jun Travel Take-offs restrictions 2019 Travel restrictions hardened 800 eased at the 13 Mar at the Icelandic First travel Icelandic 600 border restrictions border Resurgence of the virus 400 U
Slide 8: … and we carried more passengers in the first two months
… and we carried more passengers 208 225 in the first two months 122 than in the 73 67 remaining 18 ten months 2 3 12 7 7 14 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec of 2020 441k 335k passengers passengers
Slide 9: 20 aircraft were prepared for on-ground storage
20 aircraft were prepared for on-ground storage
Slide 10: Effective technical solutions built and implemented to improve service
Effective technical solutions built and Solution to issue travel credit vouchers implemented to Chat bot, which lightened the load on our service center improve service Automated refunds to shorten the refund process considerably Flexible booking policies introduced New terms and conditions policy t
Slide 11: Six passenger aircraft retrofitted to fly cargo flights
Six passenger aircraft retrofitted to fly 80 cargo flights with medical equipment from China to Europe and North America
Slide 12: Financial restructuring completed including a successful share offering…
Number of shareholders Jan 3,171 Dec 13,508 Financial restructuring completed including a successful share offering…
Slide 13: Our valuable infrastructure has enabled us to maintain flexibility
Our valuable infrastructure has enabled us to maintain flexibility in challenging times Our Valuable Slots at Strong Effective Beneficial Flexible excellent ecosystem strategic international distribution partnership fleet people of businesses airports brand channels 13
Slide 14: Financials
Financials Eva Sóley Guðbjörnsdóttir CFO Icelandair Group
Slide 15: Net loss USD 83.3 million
Net loss USD 83.3 million Operations heavily impacted by COVID-19 USD million Q4 2020 Q4 2019 Change + The capacity of Icelandair's route network decreased by 95% Transport revenue 37.8 245.0 -207.2 and the number of passengers dropped by 97% between years Aircraft and aircrew lease 6.7 23.9 -17.1 O
Slide 16: Net loss USD 376.2 million
Net loss USD 376.2 million All main deviations from LY are directly related to C-19 USD million 12M 2020 12M 2019 Change + Revenue down by USD 1,071 million or 71% Transport revenue 265.5 1,159.5 -894.0 Aircraft and aircrew lease 64.7 91.6 -26.9 + Freight services less affected with cargo revenue in
Slide 17: Traffic Data
Traffic Data All operation heavily affected by COVID-19 2020 - changes from 2019 -5 -15 -14 Increased cargo aircraft flights explain less drop -53 in cargo -55 operations than -58 in passenger services -83 -81 Pax ASK LF (ppt) Pax ASK LF (ppt) BH FTK Pax = Passengers, ASK = Available Seat Km, LF = L
Slide 18: Salaries and salary-related cost USD 207.9 million in 2020
Salaries and salary-related cost USD 207.9 million in 2020 Number of full-time employees down by 2,725 between years Salaries and salary-related cost Number of FTEs end of year Gender ratio USD million -221 -2,725 429.3 4,256 Female 48% 52% 207.9 1,531 Male 2019 2020 2019 2020 18
Slide 19: Fuel cost USD 76.5 million
Fuel cost USD 76.5 million Fuel cost Fuel hedges USD million + Restructuring in July 2020 resulted in considerable reduction in hedged volume and a longer horizon -247.1 + Settlements accounted for in Fuel cost (USD 11.5 million) and financial expenses 323.5 (USD 32.6 million) 26% 30% + No new hedge
Slide 20: All main deviations in expenses are related to the pandemic
All main deviations in expenses between years are directly related to the adverse effects of the pandemic Aviation expenses Other expenses -61% -62% 133.6 79.2 73.2 61.0 60.5 50.7 47.2 40.4 42.0 37.4 32.2 25.2 24.1 17.9 19.9 20.7 2019 17.5 17.5 14.4 7.4 6.6 9.4 8.6 2020 2.7 Aircraft lease Aircraft H
Slide 21: RASK and CASK comparison between years difficult
RASK and CASK overview US cents RASK and CASK +126% comparison between 15.8 years difficult due to the significant drop in capacity +15% 7.5 7.0 6.5 RASK 2019 RASK 2020 CASK 2019 CASK 2020 21
Slide 22: Balance sheet
Balance sheet Assets Equity and liabilities 31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 Operating assets 498.4 630.4 Shareholders' equity 232.8 482.5 Right-of-use assets 119.8 134.0 Loans and borrowings non-current 239.6 241.3 Intangible assets and goodwill 60.3 175.2 Lease liabilities 119.7 135
Slide 23: Net interest-bearing debt excluding lease liabilities
Net interest-bearing debt excluding lease liabilities USD 104 million Decreased by USD 36 million from the beginning of the year Equity ratio Interest-bearing debt Net lease liabilities NIBD excl. lease liabilities USD million USD million USD million Excluding warrants Held for sale Current Non-curr
Slide 24: Deferred income USD 187 million
Deferred income at year-end 2020 USD million Deferred income 187 USD 187 million 21 9 Vouchers valid for 3 years representing 94 50% thereof 64 Sold unused tickets Vouchers Frequent Other prepayments Total deferred flyer points income 31 December 2020 24
Slide 25: Liquidity position USD 331 million at year-end
Liquidity position USD 331 million at year-end Liquidity breakdown Liquidity developments in Q4 2020 USD million USD million 399 399 37 120 331 302 11 120 55 52 36 8 52 3 2 30 Cash - assets held for sale 42 Government guaranteed credit facility 235 19 4 Undrawn revolving facilities 3 191 331 Marketa
Slide 26: Outlook
Outlook Bogi Nils Bogason President and CEO Icelandair Group
Slide 27: We expect to reach previous capacity in 2024
We expect to reach previous capacity in 2024 Number of available seat kilometers (ASK) per year: 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 28: Iceland will continue to be an attractive tourist destination
Iceland will continue to be an attractive tourist destination post-COVID Iceland’s small population, spaciousness and untouched nature are seen as positive attributes 28
Slide 29: Changes in the competitive landscape
Icelandair route network Changes in the competitive landscape are likely to rationalize capacity across the North Atlantic, creating opportunities for Icelandair’s business model 29
Slide 30: Increased focus on cargo operations
Increased focus on cargo operations which were successful in 2020 30
Slide 31: Sales process for Iceland Travel initiated
Sales process for Iceland Travel initiated in line with Icelandair Group’s strategy to focus on aviation Iceland Travel is the leading incoming travel agency in Iceland 31
Slide 32: Boeing 737 MAX recertified as safe to fly
Boeing 737 MAX recertified as safe to fly After almost two years on the ground Icelandair has started Delivery schedule The Boeing 737 MAX is both cost-effective and more preparation for the environmentally friendly reintroduction with safety as #1 priority + Additional operational 3 3 flexibility +
Slide 33: Icelandair Group is in a strong position to scale up
Icelandair Group is in a strong position to scale up as soon as markets open again Proven and Improved Strong position in Opportunities to Strong balance flexible competitiveness to highly attractive grow unique sheet and liquidity business model ensure profitability Icelandic tourism transatlantic
Slide 34: Q&A
Q&A
Slide 35: Disclaimer
Disclaimer + This material has been prepared by Icelandair Group hf. It may include confidential information about Icelandair Group hf. unless stated otherwise all information is sourced by Icelandair Group hf. + The circulation of the information contained within this document may be restricted in