Japan Airlines Co., Ltd. · TSE:9201

Japan Airlines — Q1 FY2021 Earnings Presentation

38 slides from Japan Airlines's earnings presentation, Aug 3, 2021

  1. Slide 1: Financial Results 1st Quarter Mar/2022 (FY2021)

    JAPAN AIRLINES Co., Ltd. Financial Results 1st Quarter Mar/2022（FY2021） August 3, 2021 ©Japan Airlines, ALL rights reserved.

  2. Slide 2: Agenda

    SKYTRAX SKYTRAX 2019 The World’s Best Economy Class 5-Star Airline The Best Economy Class Seat 1. PERFORMANCE OVEVIEW FOR FY21Q1 APEX The 8th SKYTRAX Health Safety Powered IR Good Visual Award 2. RECENT OUTLOOK Covid-19 Safety Rating by SimpliFlying Audit 5-Sat Diamond 3. DETAILS OF FINANCIAL RESULT

  3. Slide 3: Performance Overview for FY21Q1

    PERFORMANCE OVERVIEW FOR FY21Q1 ✓ COVID-19 effect continues significantly ✓ In order to secure liquidity at hand in this difficult situation, no interim dividends will be paid Revenue EBIT (1)/Profit or Loss (2) （JPY Bn）400.0 （JPY Bn） EBIT Profit or Loss ▼215.7 Bn 40.0 348.8 19.9 12.9 (▼61.9%) 300.0

  4. Slide 4: Speaker notes: first quarter performance overview

    ➢ Thank you very much for joining with us today. ➢ The first quarter Revenue was 133 billion yen, which was up 74.1% from the previous year, however, it was down 61.9% from pre-COVID FY2019 first quarter. ➢ The COVID effect still continues and EBIT was a loss of 82.6 billion yen and Net Loss became

  5. Slide 5: Agenda

    1. PERFORMANCE OVEVIEW FOR FY21Q1 2. RECENT OUTLOOK 3. DETAILS OF FINANCIAL RESULTS FOR FY21Q1 4. RECENT TOPICS 5. REFERENCES ©Japan Airlines, ALL rights reserved. 4

  6. Slide 6: Intentionally left blank

    INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.

  7. Slide 7: Recent Outlook

    Recent Outlook Int’l / Domestic Passenger Operations (Full Service Carrier), Cargo / Mail ✓ Passenger number increased gradually by transit demand for International Passenger Business while border restrictions continued ✓ Domestic demand gradually recovered even with declaration of a state of emerge

  8. Slide 8: Speaker notes: recent outlook

    ➢ On this page, I will explain the current outlook of International Passenger Business and Domestic Passenger Business. ➢ For International Passenger Business, there is no sign of robust recovery due to continuing border restrictions. We are focusing on transit demands between North America and Sout

  9. Slide 9: Initiatives for liquidity at hand

    Initiatives for liquidity at hand Liquidity and cash burn ✓ Secured a sufficient level of liquidity over 650 billion yen, together with credit line ✓ Q1 Cash burn was about 10 to 15 billion yen per month ✓ Cash burn is expected to stop as demand recovers and advance received increases Cash Balance &

  10. Slide 10: Speaker notes: liquidity and cash burn

    ➢ Then, I would like to explain liquidity at hand and cash burn. ➢ For liquidity, We have financed 54.4 billion yen through issuance of straight bond and bank borrowing, resulting in 357 billion yen of cash at hand at the end of June. Together with the unused credit line of 300 billion yen, we have

  11. Slide 11: Agenda

    1. PERFORMANCE OVEVIEW FOR FY21Q1 2. RECENT OUTLOOK 3. DETAILS OF FINANCIAL RESULTS FOR FY21Q1 4. RECENT TOPICS 5. REFERENCES ©Japan Airlines, ALL rights reserved. 7

  12. Slide 12: Intentionally left blank

    INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.

  13. Slide 13: Details of Financial Results for FY21Q1: Consolidated Financial Results

    DETAILS OF FINANCIAL RESULTS FOR FY21Q1 Consolidated Financial Results FY19Q1 FY20Q1 （JPY：Bn ） FY19Q1 FY20Q1 FY21Q1 Diff. y/y Diff. y/y Revenue 348.8 76.3 133.0 ▼215.7 ▼61.9% +56.6 +74.1% International PAX 130.6 2.7 11.2 ▼119.3 ▼91.4% +8.5 +315.0% Domestic PAX 127.1 18.9 38.0 ▼89.0 ▼70.1% +19.0 +100

  14. Slide 14: Speaker notes: consolidated financial performance

    ➢ This page shows consolidated financial performance. ➢ For your comparison, we added the previous year, FY2020’s figures and also FY2019 figures as well. ©Japan Airlines, ALL rights reserved. 8-S

  15. Slide 15: Changes in EBIT (Revenues/Expenses)

    DETAILS OF FINANCIAL RESULTS FOR FY21Q1 Changes in EBIT (Revenues／Expenses) ASK y/y ： +139.7% + stands for profit increase（ revenue increase, cost decrease ) RPK y/y ： +173.3% ▼ stands for profit decease ( revenue decrease, cost increase ) ＋48.3 Bn （JPY Bn） 4.2 Bn yen of Personnel cost reduction thr

  16. Slide 16: Speaker notes: revenues and expenses

    ➢ This page shows ups and downs of revenues and expenses. ➢ Revenue increased by 56.6 billion yen year-on-year due to good Cargo and Mail Business and an increase of Passenger Business revenue. ➢ Expenses increased only by 9.6 billion yen year-on-year in spite of variable cost increase due to supply

  17. Slide 17: Int'l / Domestic Passenger Operations (Full Service Carrier)

    DETAILS OF FINANCIAL RESULTS FOR FY21Q1 Int’l / Domestic Passenger Operations (Full Service Carrier) International Passenger (1) FY19Q1 FY20Q1 FY21Q1 Vs. FY19Q1 Vs. FY20Q1 Passenger Revenue（JPY Bn） 130.6 2.7 11.2 ▼91.4% +313.8% Passengers（’000） 2,429 33 149 ▼93.8% +341.3% ASK（MN seat km） 13,767 1,13

  18. Slide 18: Speaker notes: passenger business

    ➢ This page shows the result of International Passenger Business and Domestic Passenger Business. ➢ For International Passenger Business, a difficult situation continued but we obtained transit demand, and expat and returnee demand. As a result, the passenger number increased by 4.4 times larger yea

  19. Slide 19: Cargo / Mail

    DETAILS OF FINANCIAL RESULTS FOR FY21Q1 Cargo / Mail ✓ International Cargo revenue significantly increased because of high demand and high price level under decreased capacity of passenger fight belly space ✓ To capture strong demand, many cargo flights with own passenger aircraft and chartered frei

  20. Slide 20: Speaker notes: cargo and mail

    ➢ This page is about Cargo and Mail. ➢ International Cargo Business is still good. Revenue achieved to double of last year’s first quarter revenue, which already exceeded the pre-COVID level. The capacity level was about double of last year’s first quarter because of cargo flights using passenger ai

  21. Slide 21: Expenses

    DETAILS OF FINANCIAL RESULTS FOR FY21Q1 Expenses Major Operating Expense Items 主要営業費用項 FY19Q1 FY20Q1 （JPY：Bn ） FY19Q1 FY20Q1 FY21Q1 Diff. y/y Diff. y/y Fuel 63.6 19.4 26.5 ▼37.0 ▼58.2% +7.1 +36.8% Landing and navigation fees 21.4 7.7 8.0 ▼13.3 ▼62.5% +0.2 +3.0% Maintenance 19.2 18.5 17.5 ▼1.7 ▼8.8%

  22. Slide 22: Speaker notes: costs

    ➢ This page explains costs. ➢ Our most important message regarding cost control in our mid-term management plan is control of actual fixed cost. The actual fixed cost in this first quarter was 117.4 billion yen. As we committed in our mid-term management plan, we were able to control the actual fixe

  23. Slide 23: Summary of Consolidated Statement of Financial Position and Cash Flow

    DETAILS OF FINANCIAL RESULTS FOR FY21Q1 Summary of Consolidated Statement of Financial Position and Cash Flow ✓ Secured 42.4% of Equity Ratio in the difficult situation BS ✓ Sufficient long-term fund has been secured for 573.2 billion yen of Interest-bearing debts and 74.3 billion yen of repayment w

  24. Slide 24: Speaker notes: balance sheet and cash flow

    ➢ This page shows balance sheet and cash flow. ➢ In spite of the current difficult situations, we can maintain one of the best financial structure among airlines as 42.4% of equity ratio. ➢ Operating cash flow is still negative, however it improved from the previous year. In spite of a declaration o

  25. Slide 25: Agenda

    1. PERFORMANCE OVEVIEW FOR FY21Q1 2. RECENT OUTLOOK 3. DETAILS OF FINANCIAL RESULTS FOR FY21Q1 4. RECENT TOPICS 5. REFERENCES ©Japan Airlines, ALL rights reserved. 14

  26. Slide 26: Intentionally left blank

    INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.

  27. Slide 27: Recent Topics: JAL's LCC Strategy Based in Narita Starts in Earnest

    RECENT TOPICS LCC JAL’s LCC Strategy Based in Narita Starts in Earnest ✓ Global network was established with three Narita-based LCCs ✓ Will capture swiftly post-COVID demand recovery • Various services will be provided with cutting-edge technology Japan’s first Mid- and • Restarts a Honolulu route i

  28. Slide 28: Speaker notes: LCC strategy

    ➢ This page and the following pages explain our recent topics. Let me start with LCC. ➢ We have started our Narita-based LCC strategy in earnest. ➢ Spring Japan that can capture an ex-China inbound demand became our subsidiary. Also, ZIPAIR will increase its Hawaiian flight frequency start a Singapo

  29. Slide 29: Recent Topics: ESG

    RECENT TOPICS ESG ESG Management to achieve SDGs Initiatives • Key initiatives and FY2025 targets regarding ✓ Disclosure of climate-related financial 4 priority areas and 22 issues through JAL’s information along with TCFD guideline business activities are disclosed on JAL’s • JAL announced its supp

  30. Slide 30: Speaker notes: ESG

    ➢ On this page, I will explain ESG. ➢ To promote ESG management to achieve SDGs, we have set 4 priority areas and 22 issues. We have disclosed development of major 50 initiatives, together with the past results and our targets in FY2025, on our website. Also, A sustainability-promotion Council chair

  31. Slide 31: Recent Topics: Safety and Comfort

    RECENT TOPICS Safety and Comfort ✓ Complimentary COVID-19 ✓ Contactless ✓ Hygiene measures ✓ Awards ✓ PCR Testing Service Cover SMART AIRPORT First airline in Asia to be Extended complimentary COVID- Antiviral and best-awarded in the two PCR testing service for domestic routes Expansion 19 cover for

  32. Slide 32: Speaker notes: safety and comfort initiatives

    ➢ Finally, on this page, our recent initiatives are shown. ➢ We are working on those initiatives for safety and comfort during this pandemic. ➢ Also, we are working on initiatives to achieve our mid-term management goals ➢ The following pages are your references. Page 19 is a break-even matrix of EB

  33. Slide 33: Agenda

    1. PERFORMANCE OVEVIEW FOR FY21Q1 2. RECENT OUTLOOK 3. DETAILS OF FINANCIAL RESULTS FOR FY21Q1 4. RECENT TOPICS 5. REFERENCES ©Japan Airlines, ALL rights reserved. 18

  34. Slide 34: A break-even matrix is shown as below

    Originally disclosed on May 7,2021 《Reference》 A break-even matrix is shown as below ✓ However, EBIT & EBITDA(1) break-even Int’l PAX/Domestic PAX demand matrix is shown below(2) ✓ Will take all possible measures to improve performance by flexible adjusting to fluctuating demands 100% 【Break-even De

  35. Slide 35: Operation Performance by Geographic Segment

    《Reference》 (1) Operation Performance by Geographic Segment (Full Service Carrier) Passenger Revenue Revenue Passengers Carried Component Ratio (%) Vs. FY19Q1 Vs. FY20Q1 (‘000) FY21Q1 Vs. FY19Q1 Vs. FY20Q1 FY21Q1 America 49% ▼85.6% +815.7% America 61 ▼84.5% +605.0% Europe 13% ▼93.2% +151.3% Europe 1

  36. Slide 36: Fleet Information

    《 Reference 》 Fleet Information End of FY20 (March 31, 2021) End of FY21Q1 (June 30, 2021) Diff. Owned Leased Total 1 Total 2 Owned Leased Total 1 Total 2 retired aircraft retired aircraft Total2 of Mar/21 - excluded excluded Jun/21 Airbus A350-900 4 4 8 8 5 4 9 9 +1 Boeing 777-300ER 13 0 13 13 13 0

  37. Slide 37: Finance & Investor Relations, Japan Airlines

    Finance & Investor Relations, Japan Airlines ©Japan Airlines, ALL rights reserved. 22

  38. Slide 38: Disclaimer

    Disclaimer This content contains descriptions of the future expectations, outlooks, objectives and plans etc. of Japan Airlines Co., Ltd. (hereafter "the company") and related Group companies (hereafter "the Group"). These are based on information available at the time when these materials were crea

Japan Airlines — Q1 FY2021 Earnings Presentation on 6ix