International Consolidated Airlines Group Sa · LSE:IAG
International Consolidated Airlines Group Sa — FY2020 Earnings Presentation
33 slides from International Consolidated Airlines Group Sa's earnings presentation, Feb 27, 2021
Slide 1: IAG results presentation Full Year 2020
IAG results presentation Full Year 2020 26 February 2021
Slide 2: 2020 Highlights
2020 Highlights Luis Gallego, Chief Executive Officer
Slide 3: IAG has responded quickly and decisively to the pandemic
IAG has responded quickly and decisively to the pandemic Actions to address COVID-19 Health and safety • Customers and employees health and safety remains our top priority • Passenger demand (RPKs) declined by -74.7% for full year 2020 compared to 2019 and by -87.2% from March to December Passenger
Slide 4: Significant actions taken to enhance IAG's long-term strategic position
Significant actions taken to enhance IAG’s long-term strategic position FY 2020 and 1Q 2021 strategic highlights • NPS improved by 10.9 points to 36.7 • BA Club World Suite installed on 28 longhaul aircraft as of the end February Customer • Aer Lingus received antitrust approval to join Atlantic Joi
Slide 5: Financial results
Financial results Steve Gunning, Chief Financial Officer
Slide 6: Liquidity remains strong despite substantial loss
Liquidity remains strong despite substantial loss FY 2020 financial highlights Jan+Feb Mar to Dec 2019 2020 5.1% 2.1% 3.3 RPK, ASK 81.4% 50.0% +2.3pts -35.5pts Pre exceptional Load Factor operating result 2020 (€bn) (%vly) RPKs ASKs -78.1% -87.2% Load Factor -4.4 UKEF 15.7 Facilities 10.3 14.3 9.1 C
Slide 7: Continued losses due to COVID-19
Continued losses due to COVID-19 Pre exceptional operating results, 4Q 2020 and FY 2020 4Q 2020 4Q 2019 vly FY 2020 FY 2019 vly Passenger revenue 686 5,390 -87.3% 5,574 22,468 -75.2% Cargo revenue 389 292 +33.2% 1,306 1,117 +16.9% Other revenue 228 532 -57.1% 988 1,921 -48.6% Total revenue 1,303 6,2
Slide 8: Exceptional charge of €3.1bn for full year 2020
Exceptional charge of €3.1bn for full year 2020 Exceptional items, 4Q 2020 and FY 2020 €m 4Q 2020 FY 2020 Passenger revenue -2 -62 ‘Over-hedging’ charge related to FX Total revenue -2 -62 Restructuring costs related to redundancy programmes Employee costs -44 -313 mainly at British Airways and Aer L
Slide 9: Significant losses at all airlines
Significant losses at all airlines Financial performance at airline level, FY 2020 FY 2020 FY 2020 FY 2020 FY 2020 vly vly vly vly (€m) (£m) (€m) (€m) Passenger revenue 382 -81.4% 2,894 -75.7% 1,160 -71.4% 569 -76.7% Cargo revenue 88 +62.5% 890 +25.2% 240 -17.6% - - Other revenue - nm 217 -68.0% 859
Slide 10: Strong cash position at the end of 2020
Strong cash position at the end of 2020 Cash bridge FY 2020 (€m) -766m 8,000 7,000 Deferred revenue 391 6,000 2,266 1,164 978 808 1,410 1,698 1,187 2,674 5,000 313 1,536 383 4,000 489 2,157 6,683 5,917 5,917 3,000 4,951 4,951 5,170 4,572 1,939 4,738 4,417 4,417 4,259 3,876 1,133 2,000 3,387 3,634 3,
Slide 11: Liquidity position higher than before the COVID-19 crisis
Liquidity position higher than before the COVID-19 crisis Liquidity position Management actions Cash + Facilities (% of 2019 revenue) FY 2020 36% 37% 32% 26% 37% 40% • $1.38bn British Airways RCF extended • £0.3bn UK CCFF commercial paper for BA €10.3bn • €1.0bn of term loans 70% guaranteed by the I
Slide 12: €2.2bn increase in net debt in full year 2020
€2.2bn increase in net debt in full year 2020 Leverage €m 31 Dec 2020 30 Sep 2020 30 Jun 2020 31 Mar 2020 31 Dec 2019 Gross debt 15,679 16,107 16,479 14,453 14,254 Bank and other loans 3,466 4,078 4,014 1,995 1,954 Asset finance and lease liabilities 12,213 12,029 12,465 12,458 12,300 Cash, cash equ
Slide 13: Manageable debt repayment schedule
Manageable debt repayment schedule Financial debt maturity profile 2021-2027 €2,232m €774m €621m €655m €568m €407m €313m 2021 2022 2023 2024 2025 2026 2027 CCFF pound sterling commercial paper ISIF facility Floating rate ICO guaranteed loans UKEF loan Other secured loans Other unsecured bonds and lo
Slide 14: Capex reduced for 2020 and 2021
Capex reduced for 2020 and 2021 • 2020 capex €1.9bn vs €2.7bn expected at the end of 1H 2020 • Fleet capex reduction driven by delays of 7 aircraft from 2020 to 2021 • 2021 capex €1.7bn vs €1.9bn expected at the end of 1H 2020 • Fleet deliveries still expected to be 15 aircraft (5 shorthaul and 10 l
Slide 15: Cash operating costs more than halved
Cash operating costs more than halved Actual operating cash costs per week Estimated operating cash costs per week 4Q20 1Q21 €415m €410m -48% -55% €18m €215m Cargo- driven €185m flight costs €197m 4Q20 planned flying Post management 1Q20 planned flying Post management programme actions programme act
Slide 16: Outlook
Outlook Luis Gallego, Chief Executive Officer
Slide 17: Outlook for 2021 remains uncertain
Outlook for 2021 remains uncertain • Capacity for 1Q 2021 is uncertain but current expectation is for around 20% of 2019 capacity • The outlook beyond 1Q 2021 remains highly uncertain. The vaccination programmes in our main markets should facilitate a recovery in international air travel through the
Slide 18: Key themes
Key themes Luis Gallego, Chief Executive Officer
Slide 19: Bookings driven by the imposition and release of restrictions
Bookings driven by the imposition and release of restrictions Weekly new passenger booking intake vs. last year (5 Jan 2020 - 21 Feb 2021) Weekly total booking intakes (% of 2019) Spain domestic International shorthaul Longhaul 120% 120% 120% 100% 100% 100% 80% 80% 80% 60% 60% 60% 40% 40% 40% 20% 20
Slide 20: Positive reaction to UK Prime Minister's lockdown speech
Positive reaction to UK Prime Minister’s lockdown speech on 22 Feb British Airways new bookings sold by hour, 22 - 23 Feb 2021 vs. previous 7-day average 22-Feb 23-Feb prior 7d average New Passenger Bookings 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Booking Hour 20
Slide 21: VFR passenger demand more relevant on longhaul than shorthaul
VFR passenger demand more relevant on longhaul than shorthaul Regional flown passenger revenue contribution (%) (Jul 2020 - Jan 2021) British Airways Iberia 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Jul-20
Slide 22: A roadmap is needed for the re-start of passenger flying
A roadmap is needed for the re-start of passenger flying Objectives 1) IAG believes the rollout of vaccination programmes in countries where our airlines are based and operate should facilitate the reopening of international aviation on which economic recovery depends 2) As public health outcomes im
Slide 23: Digital solutions necessary to support verification and exchange of data
Digital solutions necessary to support verification and exchange of data Currently airline staff have the responsibility to police and ensure compliance of government requirements IAG is actively testing a range of solutions launched Crew Status app in July 2020 Many other solutions are available in
Slide 24: IAG Cargo demonstrated its agility during the pandemic
IAG Cargo demonstrated its agility during the pandemic Strong foundations Agility during the pandemic • A global network of 350+ destinations providing connectivity across three • A global network maintained through ‘Cargo only’ flying serving all the top main hubs cargo markets. Agility to adjust a
Slide 25: Maintaining our commitment to lead the industry to Net Zero emissions
Maintaining our commitment to lead the industry to Net Zero emissions Underpinned by sustainability roadmap to Net Zero 1 Fleet and operations IAG carbon targets Despite COVID-19 we IAG continues to invest in next-generation MT CO2 New aircraft and operations remain on track with aircraft and engine
Slide 26: IAG had a strong position going into the COVID-19 crisis
IAG had a strong position going into the COVID-19 crisis Operating result and lease adjusted margin Return on invested capital (RoIC) Lease adjusted margin (%) 14.4% 12.9% 16.9% Operating result (€m) 14.4% 3,485 Target from 2016 16.0% 3,285 15% 14.7% 12.3% 3,015 11.2% Target before 2016 12.7% 13.6%
Slide 27: IAG's business model has proven resilient
IAG’s business model has proven resilient 27
Slide 28: Set to emerge from COVID-19 in a stronger competitive position
Set to emerge from COVID-19 in a stronger competitive position Conclusions • Strong position both strategically and financially going into the COVID-19 crisis • Quick and decisive actions taken to minimise net operating cash outflows • We have made substantial efforts to raise capital since the star
Slide 29: Appendices
Appendices IAG INTERNATIONAL, ROUP
Slide 30: Net loss of €6.9bn in full year 2020
Net loss of €6.9bn in full year 2020 Reconciliation between pre exceptional operating result and post exceptional result after tax €m 4Q 2020 4Q 2019 FY 2020 FY 2019 Operating result (pre exceptional) -1,165 765 -4,365 3,285 Exceptional items -306 -672 -3,061 -672 Operating result (post exceptional)
Slide 31: 4Q 2020 and FY 2020 traffic and capacity statistics
4Q 2020 and FY 2020 traffic and capacity statistics Group performance Quarter Year to date Q4 2020 Q4 2019 vLY 2020 2019 vLY Passengers carried ('000s) 4,298 27,805 -84.5% 31,275 118,253 -73.6% Domestic (UK & Spain) 1,822 6,836 -73.3% 10,443 28,278 -63.1% Europe 1,611 14,035 -88.5% 14,150 62,344 -77
Slide 32: 4Q 2020 and FY 2020 traffic and capacity statistics
4Q 2020 and FY 2020 traffic and capacity statistics Performance by airline Quarter Year to date Q4 2020 Q4 2019 vLY 2020 2019 vLY Passengers carried ('000s) 151 2,608 -94.2% 2,118 11,649 -81.8% Revenue passenger km (m) 229 5,720 -96.0% 4,056 24,753 -83.6% Available seat km (m) 1,097 7,132 -84.6% 8,7
Slide 33: Disclaimer
Disclaimer Forward-looking statements: Certain statements included in this announcement are forward-looking. These statements can be identified by the fact that they do not relate only to historical or current facts. By their nature, they involve risk and uncertainties because they relate to events
International Consolidated Airlines Group — FY2020 Earnings Presentation on 6ix