Chorus Aviation Inc. · TSX:CHR
Chorus Aviation — Investor Presentation (September 2016)
32 slides from Chorus Aviation's investor presentation, September 2016
Slide 1: Investor Presentation September 2016
Investor Presentation September 2016
Slide 2: Caution Regarding Forward-Looking Information
CAUTION REGARDING FORWARD-LOOKING INFORMATION CAUTION REGARDING FORWARD-LOOKING INFORMATION Certain information in this presentation, may contain ‘forward-looking information’ as defined under applicable Canadian securities legislation. Forward-looking information typically contains words such as “a
Slide 3: Chorus at a Glance
CHORUS AT A GLANCE TSX: CHR ~ $1.5 billion Consistently profitable Ticker symbol Operating revenue - 2015 since becoming publicly traded in 2006 ~ 122 million ~ $209 million Focused on building Outstanding shares (1) Adjusted EBITDA - 2015 additional shareholder value ~ $735 million ~ $220 million C
Slide 4: Growth Strategy – Chorus Lines of Business
GROWTH STRATEGY – CHORUS LINES OF BUSINESS Focused on providing a suite of regional airline services to customers around the world Contracted flying Maintenance, repair Regional operations and overhaul (MRO) aircraft leasing Operated by Positioned for growth and diversification 4
Slide 5: Contracted Flying Operations
CONTRACTED FLYING OPERATIONS CPA – foundation of our business Operates fleet of 112 regional aircraft on behalf of Air Canada Operated by CPA in place until 2025 ~ 95% of Chorus’ total revenue Ad hoc flying Various customers • sport teams • corporate clients Stand alone fleet of three
Slide 6: Air Canada Express - Responsibilities
AIR CANADA EXPRESS - Responsibilities Air Canada Air Canada Express – operated by Jazz Purchases capacity Provides crews, airframe maintenance, flight operations, some airport operations, and Manages routes general administration Sets flight schedules Scope of operation Sets ticket prici
Slide 7: Cost Management Under the CPA
COST MANAGEMENT UNDER THE CPA Controllable Revenue (controllable costs) General overhead, salaries, wages and benefits Depreciation and amortization on aircraft and parts Type of costs Aircraft maintenance Materials and supplies Majority of costs, excluding crew rates, set annually, based
Slide 8: Cost Management Under the CPA: Pass-through costs
COST MANAGEMENT UNDER THE CPA Pass-through costs – 100% reimbursed Incurred by Chorus under the CPA Pass-through costs Passed through to Air Canada and 100% reimbursed Airport fees Type of costs Navigational fees Terminal handling fees Services provided by Air Canada at no cost to Chorus i
Slide 9: Revenue Generation Under the CPA
REVENUE GENERATION UNDER THE CPA Fixed Performance Aircraft Fees Incentives Leasing Minimum fleet established Achieving established Chorus-owned Q400 aircraft for term of CPA targets: leased into Jazz’s Air – Controllable on-time Canada Express operation Fixed margin per covered (5 CRJ900s i
Slide 10: Revenue Generation Under the CPA - Outlook
REVENUE GENERATION UNDER THE CPA - OUTLOOK Revenue generation under the CPA (1) CPA revenue for 2016-2020 is not contingent upon fleet size while 2021-2025 has a (unaudited) For the calendar portion adjusted downward as the remaining For the twelve Average for Average for Dash 8 100 aircraft reach t
Slide 11: Jazz's Competitiveness Under the CPA
JAZZ’S COMPETITIVENESS UNDER THE CPA Focused on increasing market competitiveness and growing services provided to Air Canada Industry-leading collective agreements • Pilots, Flight Attendants, Maintenance, Dispatchers • Pilots’ DB pension replaced by DC pension (new hires) • Agreements expire in
Slide 12: Voyageur Airways
VOYAGEUR AIRWAYS ~ 70% of revenue generated through specialized flight operations. Fleet of 17 owned aircraft (15 Bombardier manufactured) Contract flying services • Flight and cabin crew • Maintenance personnel • On-site manager Missions • Medical, logistical and humanitarian • Canada and A
Slide 13: Contracted Flying Operations - Summary
CONTRACTED FLYING OPERATIONS - SUMMARY Long history in flying operations with strong industry relationships – competitive advantage Jazz Aviation Jazz is Air Canada’s primary regional partner, providing 70% of their regional capacity Minimum of 96 aircraft under the CPA in 2025 with the objectiv
Slide 14: Maintenance Repair and Overhaul (MRO) and Parts
MAINTENANCE REPAIR AND OVERHAUL (MRO) AND PARTS New division under Jazz Separate profit centre Focused on traditional heavy maintenance on Bombardier aircraft Operating in North Bay, ON 200,000 square foot facility Highly specialized and custom MRO International clients Regional airc
Slide 15: Jazz Technical Services
JAZZ TECHNICAL SERVICES Traditional heavy maintenance on Bombardier regional aircraft Five-year contract with another Air Canada Express partner • Heavy maintenance checks on 14 regional jets Efficiencies gained through economies of scale Positioned for growth and diversification 15
Slide 16: Voyageur Aerotech
VOYAGEUR AEROTECH Design engineering Aircraft modifications Maintenance, repair and overhaul (MRO) • All models of Bombardier regional aircraft • Worldwide customer base • Highly specialized MRO work ~ 25% of revenue generated from Aerotech with opportunities to grow Positioned for growth an
Slide 17: Voyageur Avparts
VOYAGEUR AVPARTS Newly created business Part sales and service in support of future growth Primary focus • Bombardier products Services • Consignment inventories • Aircraft part-outs • Purchase and sale of bulk/surplus inventories from third parties Synergies with services provided by the
Slide 18: MRO and Parts – Summary
MAINTENANCE REPAIR AND OVERHAUL (MRO) AND PARTS – SUMMARY Jazz Technical Services Jazz Technical Services provides opportunity to grow as separate profit centre New, industry-leading maintenance collective agreement 24/7 operation enabling quick aircraft turnaround times Facility has capacit
Slide 19: Aircraft Leasing and Trading
AIRCRAFT LEASING AND TRADING Regional aircraft leasing is an emerging business with few providers and growing demand 39 aircraft aircraft leased under CPA by Q2 2017 and expect a minimum of 58 aircraft by end of 2018 Annual aircraft leasing revenues anticipated to be over $118 million annually
Slide 20: Corporate Growth Opportunities
CORPORATE GROWTH OPPORTUNITIES Solid platform to profitably grow and diversity Chorus Our experience in regional business • Scope of operation • Technical knowledge • Industry relationships • Safety and operational record Our expertise in various disciplines • Contracted flying operations • MRO
Slide 21: Committed to Shareholder Value
COMMITTED TO SHAREHOLDER VALUE Growing aircraft Pursuing growth Advancing business Strengthening leasing revenues opportunities for diversification leveraging Jazz competitiveness inside/outside CPA Voyageur in MRO and parts our regional aviation expertise Positioned for growth and diversification 2
Slide 22: Contact
CONTACT Nathalie Megann Vice President, Investor Relations and Corporate Affairs nmegann@chorusaviation.ca (902) 873-5094 Positioned for growth and diversification 22
Slide 23: Appendices
APPENDICES Q2 2016 Income Statement Q2 2016 Balance Sheet CPA fleet modernization plan by type and year Jazz fact sheet Jazz’s network 2016 Jazz industry recognition Voyageur fleet Positioned for growth and diversification 23
Slide 24: Income Statement – Q2 2016
INCOME STATEMENT – Q2 2016 Three months ended Six months ended June 30, June 30, (expressed in thousands of Canadian dollars, except 2016 2015 2016 2015 earnings per share) $ $ $ $ Revenue Controllable Revenue 182,450 200,003 372,043 397,973 Aircraft leasing revenue under the CPA 23,106 15,897 46,31
Slide 25: Income Statement – Q2 2016 (cont'd)
INCOME STATEMENT – Q2 2016 (cont’d) Three months ended Six months ended June 30, June 30, (expressed in thousands of Canadian dollars, except 2016 2015 2016 2015 earnings per share) $ $ $ $ Operating income 34,411 38,048 61,196 53,900 Non-operating income (expenses) Interest revenue 115 274 241 611
Slide 26: Balance Sheet – Q2 2016
BALANCE SHEET – Q2 2016 As at 30-Jun-16 31-Dec-15 $ $ Assets Current assets Cash 21,016 32,677 Restricted cash 2,287 1,829 Accounts receivable – trade and other 72,346 81,357 Inventories 48,058 45,942 Prepaid expenses and deposits 13,542 15,718 Total current assets 157,249 177,523 Property and equip
Slide 27: Balance Sheet – Q2 2016 (cont'd)
BALANCE SHEET – Q2 2016 (cont’d) As at 30-Jun-16 31-Dec-15 $ $ Liabilities Current liabilities Accounts payable and accrued liabilities 166,375 177,313 Current portion of obligations under finance leases 5,543 5,432 Current portion of long-term incentive plan 5,267 5,159 Current portion of long-term
Slide 28: Jazz Fleet Modernization Plan
JAZZ FLEET MODERNIZATION PLAN The Chorus fleet will transition to more efficient, larger aircraft with significant fleet simplification Jazz will transition to a mix of larger, newer technology regional jets (CRJ900s) and turboprops (Q400s) Aircraft Type 2015 2016 2017 2018 2019 2020 2021 2022 202
Slide 29: Jazz Fact Sheet
JAZZ FACT SHEET Corporate Fact Sheet Aircraft type Number Capacity Head office: Halifax 37 74 Regional offices: Vancouver Bombardier Q400 NextGen Calgary Toronto 16 75 Montreal Bombardier CRJ-705 Halifax (Operations Centre) Destinations served 70 destinations across Canada and the U.S. 14 50 Bombard
Slide 30: Jazz – Canada's Regional Airline
JAZZ – CANADA’S REGIONAL AIRLINE Positioned for growth and diversification 30
Slide 31: 2016 Jazz Industry Recognition
2016 JAZZ INDUSTRY RECOGNITION Jazz received top Airline Reliability Performance Awards for dispatch reliability: • Q400 Aircraft Programs for North America • CRJ100/200 Aircraft Programs for North America • CRJ700/900/1000 Aircraft Programs for North America Recognized in 2016 as one of North A
Slide 32: Voyageur Fleet
VOYAGEUR FLEET Aircraft Number Aircraft Type 7 Passenger charter Bombardier CRJ-200LR 6 Passenger charter Bombardier Dash 8-300 1 Passenger charter Bombardier Dash 8-100 1 Passenger charter De Havilland Dash 7 2 Air ambulance Beechcraft King Air 200 Positioned for growth and diversification 32
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