Wizz Air Holdings Plc · LSE:WIZZ
Wizz Air — FY2016 Earnings Presentation
38 slides from Wizz Air's earnings presentation, May 25, 2016
Slide 1: Full Year F16 Results
Half Year F1 Results November 4, 2015 Full Year F16 Results 25 May 2016
Slide 2: Business Highlights for FY 2016
BUSINESS HIGHLIGHTS FOR FY 2016 • 21% passenger growth to 20m pax • Building on our strong market leadership in CEE • Strong end to FY 2016 • Underlying net profit increased by 53% to €224m • Increasing our cost advantage • Enhancing the customer experience • Continuing excellent operational perform
Slide 3: Building on Market Leadership
BUILDING ON MARKET LEADERSHIP Aircraft 67 Airports Schedule 121 Integrity Countries 38 Utilisation 12.4 hours Bases 25 Punctuality 84.5% Staff 2,600+ Regularity 99.9% Passengers 20 million Dispatch 99.4% Flights 125,000+ 3
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS FY2016 FY2015 Change Revenue (€ m) 1,429 1,227 +16.4% Net profit (€ m), (IFRS) 193 183 +5.3% Underlying net profit after tax* (€ m) 224 146 +53.2% EBITDAR Margin (%) 30.8% 27.6% +3.2ppt Underlying net profit margin* (%) 15.7% 11.9% +3.8ppt CASK (€ cents) 3.43 3.62 (5.4)% CASK ex
Slide 5: Profitable Winter Performance
PROFITABLE WINTER PERFORMANCE H2 Operating profit* development Drivers 30 15% • Better than expected Easter performance 20 23 10% • Disciplined capacity management 10 3.8% 5% 0.9% • Benign competitive environment 4 0 F11 F12 F13 F14 F15 F16 0% going into winter 2015/16 -15 -10 -36 -36 -34 -3.6% -5%
Slide 6: Strong Revenue Growth
STRONG REVENUE GROWTH Revenue Development Total Revenue increased 16.4% to €1,429m (€m) 1,429 • Total Ticket revenues increased 12.7% • Total Ancillary revenues increased 23.2% 1,227 • Ancillary has reached 37.4% of total revenue 534 1,012 Load factor increased 1.5ppt to 88.2% 433 851 353 766 Revenu
Slide 7: Increasing Our Cost Advantage
INCREASING OUR COST ADVANTAGE Opportunities Challenges CASK and ex-fuel CASK development € cents 3.88 • Fleet development • Inflationary pressures 3.74 3.72 3.62 3.51 • Economies of scale • Infrastructure costs 3.43 • Improved financial • US dollar strength 1.58 standing 1.49 1.48 1.36 1.19 1.16 CAS
Slide 8: Continuous Cost Control
CONTINUOUS COST CONTROL € cent € cent € cents F2016 F2015 Change Fuel costs 1.15 1.36 - 0.21 Staff costs 0.29 0.29 - Distribution and marketing 0.07 0.06 + 0.01 Maintenance, materials and repairs 0.22 0.21 + 0.01 Aircraft rentals 0.51 0.47 + 0.04 Depreciation and amortisation 0.08 0.12 - 0.04 Airpor
Slide 9: Margin Expansion
MARGIN EXPANSION EBITDAR (€m) & Margin Underlying Net Income (€m) & Margin* +30.2% +53.2% 224 440 338 146 15.7% 30.8% 146 27.6% 11.9% F16 F15 F16 F15 Source: Audited financial statements. * Excluding unrealised FX gains/losses and exceptional items 9
Slide 10: Strong Cash-Flow
STRONG CASH-FLOW 800 21 (91) 29 236 700 (12) 15 600 500 € millions 400 646 300 449 200 100 0 Opening Free Cash Operating Profit Ammortisation and Net Working Capex Financial Expenses Others Closing Free Cash Depreciation Capital incl. Taxes Source: Audited financial statements 10
Slide 11: Liquidity and Leverage
LIQUIDITY AND LEVERAGE Free Cash1 as % of LTM Revenue Leverage2 45% 36% 18% 12% 14% 11% Audited financial statements. Note 1: Cash and Cash Equivalents (€m) Note 2: Leverage is defined as net debt adjusted to include capitalised operating lease obligations divided by earnings before interest, tax, d
Slide 12: Hedge Programme
HEDGE PROGRAMME Jet Fuel US Dollar Hedge Coverage 60% 8% 55% 14% Average capped rate $675 $505 $1.13 $1.12 Average floor rate $708 $456 $1.09 $1.10 Zero cost collar instruments Fuel Caps Zero cost collars & Natural Hedges Sensitivities (before hedges) for the remaining F17 period without hedge impac
Slide 13: Outlook: FY17 Guidance
OUTLOOK: FY17 GUIDANCE 2017 Financial Year Comments Capacity growth (ASKs) 17% H1: 18%, H2: 16% Average stage length Modest increase - Load Factor Modest improvement - Fuel CASK - 15% Assumes spot price of $450/MT Ex-fuel CASK Broadly flat Assumes $/€1.12 Total CASK - 5% - Revenue per ASK Down mid s
Slide 14: CEE – A Unique Opportunity for Growth
CEE – A UNIQUE OPPORTUNITY FOR GROWTH Large Addressable Market Deregulation GDP Growth Weak Legacy Carriers Growing Growing Propensity LCC Market to Air Travel Share 14
Slide 15: Market Position
MARKET POSITION Number 1 Number 2 Number 3 LCC Market Carrier Carrier Carrier CEE Ryanair Easyjet 43% 33% 6% Poland Ryanair Norwegian Romania Blue Air Ryanair Hungary Ryanair Easyjet Czech Republic Easyjet Ryanair Lithuania Ryanair Wizz Air Norwegian Bulgaria Wizz Air Easyjet Transavia Latvia Ryanai
Slide 16: De-risked Growth Profile
DE-RISKED GROWTH PROFILE F16 Capacity Increasing Frequencies 64.8 % Joining Existing Airports 25.1 % New Airports 8.4 % New Destination Countries 1.8 % Source: Company Information 16
Slide 17: Summer 2016 vs. Summer 2015
SUMMER 2016 VS. SUMMER 2015 Base Country Sep’ Sep’ 14 New Destinations (# of Aircraft) 16 15 Poland 21 19 Romania 19 15 Hungary 11 8 Germany +3 Latvia Bulgaria 6 5 Lithuania Lithuania 4 4 +2 Macedonia 3 3 Spain Lithuania Latvia 2 2 +2 Ukraine 1 1 France +1 Serbia 1 1 Czech Republic 1 1 Poland +1 Pol
Slide 18: F17 Network Development
F17 NETWORK DEVELOPMENT 60+ new routes 3 new bases 18
Slide 19: Increasing Ancillary Revenues in FY 2016
INCREASING ANCILLARY REVENUES IN FY 2016 Ancillary Income per pax increase by €0.4 €26.3 €26.7 - Non Bag Income + €1.4 per pax - Bag Fee Income - €1.0 per pax Revenue per passenger in € 13.9 15.2 Ancillary 0.0 Ticket 74.5 72.7 71.5 68.1 69.0 0.0 59.8 0.0 0.0 48.2 46.8 47.3 12.5 11.5 0.0 49.1 44.8 43
Slide 20: Ancillary Highlights in FY 2016
ANCILLARY HIGHLIGHTS IN FY 2016 New Initiatives Increasing Penetration Example: Assigned Seating Example: Members (in 000’s and % yoy growth)) + 41% + 29% 815 + 65% 580 + 35% 448 272 201 0 Phase 1: Test routes May 4, 2015 F11 F12 F13 F14 F15 F16 Phase 2: Network-wide rollout May 19, 2015 Phase 3: Pr
Slide 21: New 3 Click Booking within 30 Seconds
NEW 3 CLICK BOOKING WITHIN 30 SECONDS Click 1 Destination Click 2 Date Click 3 Payment 21
Slide 22: *5 A321ceo as of 20 May 2016
* *5 A321ceo as of 20 May 2016 22
Slide 23: Closing Comments
CLOSING COMMENTS • Underlying net profit increased by 53% to €224m • Passenger growth of 21% to 20m pax • Ex-fuel CASK well under control • Ancillary revenue per passenger increased by 1.7% • Underlying net profit margin expansion of 3.8% ppt • FY 2017 underlying net profit guidance range of of €245
Slide 24: Thank You for Your Attention
THE WORLD 3 OF OPPORTUNITY ~ S > BEGINS WITH A SMILE ¥: ye a THANK YOU FOR YOUR ATTENTION WIZZ4 wizzair.com
Slide 25: Appendix
APPENDIX CONFIDENTIAL
Slide 26: Underlying Performance
UNDERLYING PERFORMANCE Operating Profit for Profit the year 2016 2015 2016 2015 Statutory (IFRS) profit measure 235.5 167.3 192.9 183.2 Exceptional items: Realised Fx gain on conversion of deposits - (8.7) - Cost of extending and revaluing convertible debt - - - 2.5 Translation gain relating to clos
Slide 27: Summary Balance Sheet
SUMMARY BALANCE SHEET € million F2016 F2015 Property, plant and equipment 353.6 247.1 Restricted cash1 101.6 73.6 Derivative financial instruments1 1.7 60.7 Trade and other receivables1 197.7 167.9 Cash and cash equivalents 645.6 448.6 Other assets1 31.7 22.6 Total assets 1,331.8 1,020.5 Trade and o
Slide 28: Q4 Financial Highlights
Q4 FINANCIAL HIGHLIGHTS (€’000) Q4 2016 Q4 2015 Change Passenger ticket revenue 163,307 139,373 +17.2% Ancillary revenue 118,962 96,011 +23.9% Total revenue 282,269 235,384 +19.9% Fuel costs 78,024 83,214 (6.2)% Other expenses 202,946 157,864 +28.6% Total operating expenses 280,969 244,078 +15.1% Op
Slide 29: 2016 Quarterly Performance
2016 QUARTERLY PERFORMANCE Q1 F16 Q2 F16 Q3 F16 Q4 F16 Total Passenger ticket revenue 205,897 338,669 187,063 163,307 894,937 Ancillary revenue 126,596 165,245 123,410 118,962 534,213 Total revenue 332,493 503,914 310,474 282,269 1,429,150 Staff costs 22,899 26,134 25,882 26,484 101,399 Fuel costs 1
Slide 30: 2016 Quarterly Operational KPI
2016 QUARTERLY OPERATIONAL KPI CAPACITY Q1 F16 Q2 F16 Q3 F16 Q4 F16 Number of aircraft at end of period 62 63 65 67 Equivalent aircraft 58.10 62.77 63.67 65.73 Utilisation 13.00 13.49 11.91 11.53 Total block hours 68,998 77,895 69,795 68,205 Total flight hours 59,794 67,532 60,480 59,124 Revenue dep
Slide 31: Income Statement
INCOME STATEMENT € million 2016 2015 Passenger ticket revenue 894.9 793.8 Ancillary revenue 534.2 433.5 Total revenue 1,429.2 1,227.3 Staff costs 101.4 (83.4) Fuel costs 401.5 (396.6) Distribution and marketing 23.5 (18.8) Maintenance materials and repairs 77.5 (62.0) Aircraft rentals 176.2 (137.1)
Slide 32: Balance Sheet
BALANCE SHEET € million ASSETS 2016 2015 Non-current assets 536.8 431.5 Property, plant and equipment 353.6 247.1 Restricted cash 100.0 70.4 Other non-current assets 83.2 114.0 Current assets 795.1 589.0 Restricted cash 1.6 3.2 Cash and cash equivalents 645.6 448.6 Other current assets 147.9 137.2 T
Slide 33: Cash Flow
CASH FLOW € million 2016 2015 Profit before tax 201.4 191.7 Adjustments for: Depreciation 26.8 32.5 Amortisation 2.0 1.4 Financial income (2.0) (44.2) Financial expense 47.3 8.1 Loss on sale of property, plant and equipment - - Share based payment charges 1.2 0.2 Cash flows from operating activities
Slide 34: Selected KPI's
SELECTED KPI’S CAPACITY 2016 2015 Number of aircraft at end of period 67 55 Equivalent 62.57 52.53 Utilisation 12.4 12.6 Total block hours 284,894 240,711 Total flight 246,930 208,736 Revenue 125,501 105,627 Average departures per day per aircraft 5.48 5.51 Seat capacity 22,654,100 19,012,860 Averag
Slide 35: Selected Financial KPI's
SELECTED FINANCIAL KPI’S 2016 2015 Yield (€ cents) 4.64 4.84 Average revenue per seat (€) 63.09 64.55 Average revenue per passenger 71.52 74.46 RASK (€ cents) 4.1 4.19 CASK (including exceptional item) (€ cents) 3.43 3.62 CASK (excluding exceptional item) (€ cents) 3.43 3.61 Ex-fuel CASK (including
Slide 36: Diverse Revenue Mix
DIVERSE REVENUE MIX Central Eastern Europe Western Europe Western vs. Central Eastern Europe Source: Company Information. Note: Other includes Finland, Switzerland, Cyprus, Portugal and Greece for Western Europe. Israel, Georgia, Azerbaijan, Russi an Federation, Turkey, Egypt considered outside Euro
Slide 37: Planned Fleet Development
PLANNED FLEET DEVELOPMENT Seat Count F16 F17 F18 F19 F20 F21 F22 F23 F24 A320 180 35 35 35 24 15 10 5 0 0 A320S 180 28 28 31 36 36 36 34 23 19 A321S 230 4 15 25 30 30 30 30 30 30 A321neo 230 0 0 0 9 17 17 17 17 17 A321neo 239 0 0 0 0 4 26 50 70 86 Total Fleet size 67 78 91 99 102 119 136 140 152 Sha
Slide 38: Disclaimer
DISCLAIMER This presentation has been prepared by Wizz Air Holdings Plc (the Company). By receiving this presentation and/or attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation is intended