Qantas Airways Limited · ASX:QAN
Qantas Airways — H1 2017 Earnings Presentation
23 slides from Qantas Airways's earnings presentation, Feb 23, 2017
Slide 1: 1H17 Results Supplementary Presentation
For personal use only Qantas Airways Limited 1H17 Results Supplementary Presentation 23 February 2017 ASX:QAN US OTC:QABSY
Slide 2: Group Performance
For personal use only Group Performance
Slide 3: 1H17 Key Group Financial Metrics
1H17 Key Group Financial Metrics For personal use only 1H17 1H16 VLY %8 Comments Underlying PBT1 ($M) 852 921 (7.5) Underlying PBT per share (c) 45.1 42.7 5.6 Reflecting value of share buy-back Statutory Profit Before Tax ($M) 715 983 (27) Statutory Earnings Per Share (c) 27.3 31.9 (14) Includes the
Slide 4: Underlying Income Statement Summary
Underlying Income Statement Summary For personal use only $M 1H17 1H16 VLY % Unit Revenue decline of five percent with significant international market capacity growth and domestic resources decline. Partially Net passenger revenue 7,064 7,307 (3.3) offset by increase in flying activity embedded thr
Slide 5: Items Not Included in Underlying PBT
Items Not Included in Underlying PBT For personal use only $M 1H17 1H16 Ineffectiveness and non-designated derivatives relating (1) 14 to other reporting periods Net gain on sale of property, plant and equipment - (201) Gain on sale of Sydney Airport Terminal 3 in September 2015 Redundancies, restru
Slide 6: Reconciliation to Underlying PBT
Reconciliation to Underlying PBT For personal use only $M 1H17 1H16 Statutory Ineffectiveness Other items Underlying1 Statutory Ineffectiveness Other items Underlying1 relating to not included in relating to not included in other reporting Underlying other reporting Underlying periods PBT periods PB
Slide 7: Revenue Detail
Revenue Detail For personal use only Net passenger revenue down 3% Revenue ($B) • Group Unit Revenue decreased five percent – Significant international market capacity putting pressure on yields 8.5 (3)% 8.2 – Moderating decline in resources sector demand • Reduced domestic capacity offset by growth
Slide 8: Expenditure Detail
Expenditure1 Detail For personal use only Fuel costs down 13% Expenditure ($B) • Benefit from lower jet fuel prices compared to 1H16 • Improvement in fuel efficiency from Qantas Transformation fuel initiatives • Offset by higher consumption from increased flying 7.4 3% 7.2 Manpower and staff-related
Slide 9: Cash Flow
Cash Flow For personal use only $M 1H17 1H16 VLY % • Positive net free cash flow1 of $288m Operating cash flows 1,173 1,373 (15) – Strong operating cash flows of $1.2b Investing cash flows (excluding aircraft operating (885) (603) (47) 1H16 included $185m proceeds from the lease refinancing) sale
Slide 10: Invested Capital Calculation
Invested Capital Calculation For personal use only $M 12 mths 12 mths • Refinanced 9 operating leased aircraft to to Dec 16 to Dec 15 unencumbered owned aircraft Receivables (current and non-current) 971 967 – Decrease in capitalised operating leased assets Inventories 352 337 Other assets (current
Slide 11: Net Debt
Net Debt For personal use only $M 1H17 FY16 VLY • Two medium term notes of $425m at favourable rates and long tenor of 7 and 10 Current interest bearing liabilities on balance sheet 439 441 (2) years4 Non-current interest bearing liabilities on balance sheet 4,653 4,421 232 • Repayment of $227m in s
Slide 12: Net Debt Movement
Net Debt Movement For personal use only $M Opening Net Debt (30 June 16) 5,646 Net cash from operating activities (1,173) Principal portion of aircraft operating lease rentals (119) Funds From Operations (1,292) Net cash from investing activities 1,212 Aircraft operating lease refinancing (327) New
Slide 13: Total Unit Cost
Total Unit Cost For personal use only C/ASK 1H17 1H16 VLY % Total Unit Cost1 6.90 7.23 (5) Excluding: Fuel (1.97) (2.30) Change in FX rates - (0.02) Impact of changes in the discount rate and other actuarial assumptions 0.06 (0.02) Share of net profit/(loss) of investments accounted for under the eq
Slide 14: Qantas Transformation Scorecard
Qantas Transformation Scorecard only Target Progress to Date Metric Timeframe use $2.1b gross benefits $1.9b benefits realised ACHIEVING OUR TARGETS Accelerated FY17 Transformation >10% Group ex-fuel expenditure reduction1 Ex-fuel expenditure reduced by 9%2 Benefits personal 5,000 FTE reduction FY17
Slide 15: Group Operational Information
For personal use only Group Operational Information
Slide 16: Fleet at December 2016
Fleet at 31 December 2016 For personal use only Aircraft Type 1H17 FY16 Change • Net addition3 of 5 aircraft in 1H17 A380-800 12 12 - B747-400 5 5 - – 2 x A321-200 B747-400ER 6 6 - A330-200 18 18 - – 3 x F100 A330-300 10 10 - • Increased cross-utilisation of A330-200 and B737-800 B737-800NG 75 75 -
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 6 179 177 151 5 129 130 109 115 96 98 82 59 67 31 39 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 1H17 2 BUSINESS OWNERSHIP2 LAUNCH AIRCRAFT 4 ❶Jetstar Australia 100% 2004 52 x A320s/A321s ❷Jetstar Internation
Slide 19: Jetstar Domestic
Jetstar Domestic For personal use only • Underlying EBIT of $151m Jetstar Domestic 1H17 1H16 VLY % • Consistent strong earnings1 with healthy operating margins2, ASKs M 9,662 9,750 (0.9) ROIC > WACC RPKs M 8,080 8,273 (2.3) • Continuing to leverage fleet size, network and frequency advantage over co
Slide 20: Jetstar International
Jetstar International (Australia outbound and New Zealand) For personal use only • Record half year earnings1 driven by B787-8 performance Jetstar International (incl. New Zealand Domestic and Regional, 1H17 1H16 VLY % excl. Jetstar Asia) • Long-haul business focused on Asian markets where Jetstar i
Slide 21: Jetstar Airlines in Asia
Jetstar Airlines in Asia1 For personal use only • Earnings2 improvement compared to 1H16 – Jetstar Japan scale grows with international expansion, largest Japanese LCC3 in market4, profitability2 continues to improve – Jetstar Asia (Singapore) remains profitable2 despite competitive market, enhanced
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 Core earnings stream Leveraging core to point recognised upfront for the service Loyalty (QFF1 + QBR2) diversify & grow provi
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 23 Febr