Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — FY2015 Earnings Presentation
48 slides from Japan Airlines's earnings presentation, Apr 28, 2016
Slide 1: Financial Results Mar/2016 (FY2015)
JAPAN AIRLINES Co., Ltd. Financial Results MAR/2016（FY2015） April 28th, 2016
Slide 2: Contents
CONTENTS P.1 P.2 P.3 P.5 P.6 P.21
Slide 3: Overview of Mar/2016 Financial Results
Overview of Mar/2016 Financial Results Operating Revenue Operating Profit （JPY Bn） （JPY Bn） （OP Margin） 1,360 250 20% ▲8.0Bn ＋29.5Bn 1,344.7 （▲0.6%） （+16.4%） 209.1 18% 1,340 1,336.6 200 179.6 16% 15.7% 14% 1,320 150 13.4% 12% 1,300 100 10% Mar/2015 Mar/2016 Mar/2015 Mar/2016 Full-Year Full-Year Full
Slide 4: Operating revenue and operating profit commentary
Operating revenue decreased by 0.6% year-on-year to 1 trillion 336.6 billion yen. Operating profit increased by 16.4% year-on-year to 209.1 billion yen. When we announced our second-quarter financial results and Medium Term Management Plan, we had forecast an operating profit of 204 billion yen fo
Slide 5: Dividend for Mar/2016
Dividend for Mar/2016 Dividend (1) Mar/2016 Mar/2015 Dividend per share for FY3/16 New Announcement on Announcement January 29,2016 FY3/16 Net Income (2) 149.0 JPY Bn 174.4 JPY Bn 172.0 JPY Bn 16.00 JPY 120.00JPY Income Tax-Deferred +1.3 JPY Bn ▲0.4 JPY Bn － increase (+15.4%) Income available for 15
Slide 6: Dividend commentary
As mentioned earlier, we will allocate approximately 25% of total net income attributable to owners of parent after deducting income tax deferred as the total dividend amount. Therefore, we will pay 120 yen per share for fiscal 2015, which is an increase of 16 yen from the previous fiscal year. 2-S
Slide 7: Progress of Management Targets
Progress of Management Targets Targets Progress Flight Safety Indicator FY3/133 FY3/14 FY3/15 FY3/163 Achieve Zero Aircraft Accidents1 and Aircraft Accidents 1 0 2 1 Serious Incidents2 Serious Incidents 2 1 0 3 Customer Satisfaction Indicator FY3/13 FY3/14 FY3/15 FY3/16 Customer Achieve “No. 1 in Cu
Slide 8: Management targets progress commentary
I will explain the progress we have made with the three management targets set out in the Medium Term Management Plan. As for safety, we had one aircraft accident and three serious incidents in fiscal 2015. In fiscal 2016, we aim for zero aircraft accident and zero serious incident and will mainta
Slide 9: Management Topics
Management Topics Route Network, Products and Services Int’l：Boeing 777-200ER revamped with ” JAL SKY SUITE Ⅲ” JAL Express Tag Service for domestic flights will be introduced at from July 2016 to be introduced on the route in order Sapporo, Osaka, Fukuoka and Okinawa airport following Haneda. To
Slide 10: Route network, products and services commentary
In our route network, products and services, we revamped our international 777-200ER aircraft into the SKY SUITE Ⅲ (three), and will progressively introduce them on Bangkok, Singapore and Honolulu routes from July 2016. As a result, flights on almost all of our medium- and long-haul routes will be
Slide 11: Mar/2017 Earnings Forecast
Mar/2017 Earnings Forecast Operating Revenue Operating Profit （JPY Bn） （JPY Bn） （OP Margin） 1,360 220 20% +6.3JPY Bn ▲8.1JPY Bn （+0.5%） 1,343.0 1,340 1,336.6 209.1 （▲3.9%） 201.0 200 15% 15.7% 1,320 15.0% 1,300 180 10% Mar/2016 Mar/2017 Mar/2016 Mar/2017 Results Forecast Results Forecast Operational
Slide 12: Earnings forecast commentary
We forecast operating revenue to increase by 6.3 billion yen to 1 trillion 343 billion yen, and operating profit to decrease by 8.1 billion yen to 201 billion yen. We project lower earnings on higher revenues, but will put forth group-wide efforts to achieve higher earnings led by higher revenues.
Slide 13: Overview of Consolidated Financial Results
Overview of Consolidated Financial Results Consolidated Financial Results 4Q (JPY Bn) Mar/2015 Mar/2016 y/y (Jan-Mar) y/y Operating revenue was Mar/2016 (5) 1,336.6 billion yen, ▲0.6% Operating Revenue 1,344.7 1,336.6 ▲0.6% 313.2 ▲2.8% y/y. Air Transportation Segment 1,196.2 1,205.2 +0.7% 281.9 ▲1
Slide 14: Operating profit margin and EBITDAR commentary
Operating revenue decreased by 0.6% year-on-year to 1 trillion 336.6 billion yen. Operating expense decreased by 3.2% year-on-year to 1 trillion 127.4 billion yen, mainly due to a sharp drop in fuel prices. We will continuously strive to maximize revenues and minimize expenses. As a result, opera
Slide 15: Changes in Operating Profit
Changes in Operating Profit Mar/2016 Full-Year +29.5Bn (JPY Bn) (+16.4%) Aircraft Impact From Currency Market ▲21.1Bn Depreciation Fuel Maintenance Revenue ＋9.8Bn and Cost ▲30.9Bn ▲7.3 Leases Personnel Fuel ▲20.2Bn Ex. Fuel ▲10.7Bn ▲18.0% ▲1.0 ▲9.7 Other Cost ▲1.1% +54.3 ▲4.1% ASK y/y ： +0.2% ▲22.2
Slide 16: Revenue and expense change commentary
In revenue, domestic passenger operations enjoyed strong demand, but both international passenger and international cargo revenues decreased to result in a decline of total 8 billion yen revenue from the previous year. International passenger revenue decreased by 6 billion yen due to the decrease
Slide 17: International Passenger Operations (Operating Results)
International Passenger Operations (Operating Results) International Passenger 4Q(Jan-Mar) Passenger Revenue was 448.7 Mar/2015 Mar/2016 y/y y/y Mar/2016(1) billion yen, 6.0 billion yen Passenger Revenue (JPY Bn) 454.8 448.7 ▲1.3% 102.7 ▲5.6% declined y/y basis. ASK was up 1.3% and RPK ASK (MN s
Slide 18: International operations commentary
ASK on international routes increased by 1.3% year-on-year and RPK increased by 5.4%. As a result, the load factor rose by 3.1 percentage points to 78.8%. Revenue per passenger decreased by 4.8%, but as seen in the chart in the lower right corner, taking into account that unit revenue declined by
Slide 19: International Passenger Operations (Change in Revenue)
International Passenger Operations (Change in Revenue) Mar/2016 Full-Year ▲6.0Bn (JPY Bn) (▲1.3%) Although revenue per passenger declined due to a decrease in fuel 454.8 surcharge, revenue management 448.7 and expansion of JAL SKY SUITE contributed to an increase in L/F ▲21.5 +15.4 and net unit pr
Slide 20: International revenue factors commentary
When examining international passenger revenue by factor, the decrease in fuel surcharge revenue drove down revenue by 21.5 billion yen, but net unit revenue increased through revenue management as shown by the arrow on the right on page 8. Passenger numbers uplifted revenue by 15.4 billion yen du
Slide 21: Domestic Passenger Operations (Operating Results)
Domestic Passenger Operations (Operating Results) Domestic Passenger 4Q (Jan-Mar) Passenger revenue was Mar/2015 Mar/2016 y/y y/y Mar/2016 (1) 501.2 billion yen, up 2.8% Passenger Revenue y/y. (JPY Bn) 487.5 501.2 +2.8% 117.1 +2.3% ▲1.2% ▲1.6% ASK was ▲1.2% while ASK (MN seat km) 36,306 35,869 8
Slide 22: Domestic operations commentary
ASK on domestic routes decreased by 1.2% year-on-year, but RPK increased by 1.5%. As a result, the load factor increased by 1.8 percentage points year-on-year to 67.9%. Through revenue management and measures to boost demand, yield increased by 1.3% year-on-year and unit revenue increased by 1.3%.
Slide 23: Domestic Passenger Operations (Change in Revenue)
Domestic Passenger Operations (Change in Revenue) Mar/2016 Full-Year (JPY Bn) +13.7Bn Changes in customer mix through (+2.8%) revenue management 501.2 ・Well-reputed JAL SKY NEXT +7.3 ・Increase of individual passengers 487.5 +6.4 High-yield passenger percentage • Boost demand increased in holiday
Slide 24: Domestic revenue factors commentary
By factor, revenue per passenger uplifted revenue by 6.4 billion yen year-on-year due to changes in customer mix through revenue management. Passenger numbers uplifted revenue by 7.3 billion yen year-on-year due to the new Ultra Sakitoku discount fare and increasing inbound passengers demand, alth
Slide 25: Major Operating Expense Items
Major Operating Expense Items Operating Expenses 4Q Although increase in some (JPY Bn) Mar/2015 Mar/2016 difference y/y (Jan-Mar) difference y/y cost items due to the weak Mar/2016 (1) yen and service Fuel 282.5 228.1 ▲54.3 ▲19.3% 47.4 ▲12.0 ▲20.2% enhancements, we will maintain cost reduction Lan
Slide 26: Operating expense commentary
Fuel costs decreased by 54.3 billion yen to 228.1 billion yen. We will explain in detail on page 14. Maintenance costs increased, mainly due to the weaker yen. Personnel costs increased by 9.7 billion yen year-on-year due to increases in basic wage and bonuses, exchange rates, and such. The decrea
Slide 27: Maximizing Profit per ASK
Maximizing Profit per ASK To build the foundation for stable business operations in the medium and long term and enhance services and products, we will proactively assign resources to human resources and products and services to maximize profit per ASK （JPY） 20 104 105 15 100 12.7 12.9 13.7 12.5 ユニッ
Slide 28: Profit per ASK commentary
As we have emphasizing service quality (as we have not been increasing ASK so much), we have focused on expenditures to improve services for the customers, and Unit Cost has increased. However, we will pursue efforts to improve cost-efficiency. Air transport revenue per ASK excluding fuel surcharg
Slide 29: Impact of Fuel and FX Markets
Impact of Fuel and FX Markets Hedge Ratio of Fuel Costs Transition of Fuel Cost by factors (As of End of FY Mar/2017) 300 100% Market Fuel FX Volume 80% 250 increase / Approx. 282.5 Hedging etc., ▲103.8 60% Approx. 50% FX +29.2 200 40% +20.2 40% 228.1 Approx. Approx. 150 10% 10% Approx. Approx. 20%
Slide 30: Fuel and hedging commentary
The chart in the upper left corner shows the factors for decrease in fuel costs. Although the fuel costs decreased by 103.8 billion yen year-on-year due to lower fuel prices, the weaker yen drove fuel costs upward by 20.2 billion yen, and loading volume and gains and losses on hedging, by 29.2 bill
Slide 31: Major Balance Sheet Items
Major Balance Sheet Items Consolidated Balance Sheet Summary as of Mar/2016 End of End of (JPY Bn) difference Mar/2015 Mar/2016 The balance of interest- bearing debt decreased by Total Assets 1,473.3 1,578.9 +105.5 7.9 billion yen to 92.6 billion 420.3 +55.3 yen as a result of Cash and Deposits 36
Slide 32: Balance sheet commentary
The balance of interest-bearing debt decreased by 7.9 billion yen from the previous fiscal year-end to 92.6 billion yen after repaying long-term loans and lease obligations. Off balance unexpired lease fees decreased by 28.1 billion yen from the previous year to 96.9 billion yen. The equity ratio
Slide 33: Major Cash Flow Items (Results)
Major Cash Flow Items（Results） (JPY Bn) Mar/2015 Mar/2016 Difference Net Income Before Income Taxes and Non-controlling Interests 169.9 207.3 +37.4 Depreciation and Amortization 85.8 88.5 +2.6 Other 5.3 16.4 +11.1 Cash Flow from Operating Activities 261.1 312.3 +51.2 Capital Expenditure (1) ▲198.6 ▲
Slide 34: Cash flow commentary
Cash flow from operating activities increased by 51.2 billion yen year-on-year to 312.3 billion yen. Cash flow from investing activities shows a cash outflow of 207.2 billion yen, resulting in an increase of 7.9 billion yen year-on-year. Cash flow from financing activities shows a cash outflow of
Slide 35: Mar/2017 Earnings Forecast (Consolidated)
Mar/2017 Earnings Forecast (Consolidated) Consolidated Financial Results Operational Preconditions Mar/2016 Mar/2017 Mar/2016 Mar/2017 (JPY Bn) difference y/y Results Forecast Results Forecast Revenue 1,336.6 1,343.0 +6.3 +0.5% ASK* Int’l +1.3% ▲0.6% Int’l Passenger 448.7 450.0 +1.2 +0.3% Doms ▲1.2%
Slide 36: Consolidated forecast commentary
As explained earlier, we estimate operating revenue to increase by 6.3 billion yen to 1 trillion 343 billion yen for the fiscal year ending March 31, 2017. Operating profit is estimated to decrease by 8.1 billion yen to 201 billion yen, and ordinary income to decrease by 16.2 billion yen to 193 bi
Slide 37: Changes in Operating Profit / Forecast Mar/2017
Changes in Operating Profit/ Forecast Mar/2017 (JPY Bn) Impact From Currency Market ▲2.5Bn Revenue ＋0Bn Cost ▲2.5Bn ▲8.1Bn ▲2.5Bn Fuel Ex. Fuel ▲0Bn （▲3.9%） +26.1 ▲40.6 +9.9 209.1 +1.2 +1.7 ▲6.5 201.0 Mar/2016 Int’l Domestic Cargo & Mail Other Revenue Fuel Other Cost Mar/2017 Full-Year Passenge Pass
Slide 38: Operating profit forecast commentary
We will strive to increase revenues by raising unit revenue of international and domestic passengers, although we may see a decrease in fuel surcharge revenue. As for expenses, fuel costs are expected to decrease by 26.1 billion yen, but personnel costs are projected to increase by 21 billion yen
Slide 39: Mar/2017 Earnings Forecast (Consolidated Balance Sheet)
Mar/2017 Earnings Forecast (Consolidated Balance Sheet) We aim to improve our credit rating, maintain shareholder’s equity ratio of 50% or above, and increase financial stability. Balance Sheet Fundamental Capital Policy End of End of Accumulate retained earnings to （JPY Bn） Mar/2016 Mar/2017 Diff.
Slide 40: Balance sheet forecast commentary
Interest-bearing debt is seen to decrease by 4.6 billion yen to 88 billion yen at the end of fiscal 2017 after repaying lease obligations and long-term loans. Shareholders’ equity is estimated to reach 1 trillion 35 billion yen, as we expect to post approximately 30 billion yen in income tax defer
Slide 41: Mar/2017 Earnings Forecast (Cash Flow)
Mar/2017 Earnings Forecast (Cash Flow) Make relevant capital investments based on strict investment discipline. Secure return on investment and maximize Free Cash Flow Cash Flow Use of cash flows（Mar/2017 ） （JPY Bn） 300 Mar/2016 Mar/2017 268.0 243.0 Aircraft Investments (new （JPY Bn） Diff. aircraft
Slide 42: Cash flow forecast commentary
Cash flow from operating activities is seen to decrease by 44.3 billion yen year-on-year due to an increase in corporate tax payment, and shows a cash inflow of 268 billion yen. In cash flow from investing activities, we will be taking delivery of many aircraft in fiscal 2016 and expect an increas
Slide 43: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines
Slide 44: Supplemental Reference: Revenue of International Routes by Geographic segment
《Supplemental Reference》 Revenue of International Routes by Geographic segment Passenger Revenue (% of the whole int’l revenue) Passengers Revenue y/y Revenue ratio 4Q(Jan- (%) 4Q(Jan- 4Q(Jan- (‘000) Mar/2015 Mar/2016 y/y Mar) y/y Mar/2016 Mar) Mar/2015 Mar/2016 Mar) Mar/2016 Mar/2016 Mar/2016 Trans
Slide 45: Supplemental Reference: Number of Aircraft
《Supplemental Reference》 Number of Aircraft Mar/2016 End of Mar/2015 End of Mar/2016 Difference Owned Leased Total Owned Leased Total Boeing 777-200 13 0 13 12 0 12 ▲1 Boeing 777-200ER 11 0 11 11 0 11 - Boeing 777-300 7 0 7 4 0 4 ▲3 Boeing 777-300ER 13 0 13 13 0 13 - Large-sized Total 44 0 44 40 0 4
Slide 46: Earnings Forecast Mar/2017: International Passenger Operations
《Supplemental Reference》 Earnings Forecast Mar/2017（ Air transportation Segment ） International Passenger Operations y/y （%） Mar/2016 Mar/2017 Results Forecast Full-year 1H 2H （Forecast） (Forecast) (Forecast) Passenger Revenue ▲3.3% (JPY Bn) 448.7 450.0 +0.3% +4.4% ASK ▲0.6% ▲0.1% ▲1.0% (MN seat km)
Slide 47: Earnings Forecast Mar/2017: Domestic Passenger Operations
《Supplemental Reference》 Earnings Forecast Mar/2017（ Air transportation Segment ） Domestic Passenger Operations y/y （%） Mar/2016 Mar/2017 Results Forecast Full-year 1H 2H （Forecast） (Forecast) (Forecast) Passenger Revenue ▲0.0% (JPY Bn) 501.2 503.0 +0.3% +0.8% ASK ▲0.0% ▲1.3% (MN seat km) 35,869 35,
Slide 48: Disclaimer on forward-looking statements
This contents 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 created by the