Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — FY2017 Earnings Presentation
47 slides from Japan Airlines's earnings presentation, Apr 27, 2018
Slide 1: Financial Results MAR/2018 (FY2017)
JAPAN AIRLINES Co., Ltd. Financial Results MAR/2018（FY2017） April 27th, 2018
Slide 2: Today's Topics
Today’s Topics P.1 P.2 P.3 P.4 P.14 P.20 ※JAL Corporate Website ※the CONTRAIL Project
Slide 3: Speaker introduction
I’m Norikazu Saito. Thank you very much for joining our conference call today. First, I will explain the material details and will answer your questions later on. 0-S
Slide 4: Overview of Financial Results for Mar/18
Overview of Financial Results for Mar/18 Resulted in an increase both in revenue and operating profit compared to the previous year. Aim to increase both revenue and profit in FY2018 Operating Revenue Operating profit・Net profit Operating （JPY Bn） Operating Net Profit ROIC (2) （JPY Bn） Profit Pr
Slide 5: Overview of financial results for the fiscal year (speaker notes)
Now, I will present an overview of the financial results for the fiscal year ending March 31, 2018. The operating revenue increased by 94.2 billion yen, up 7.3% year-on-year, to 1 trillion and 383.2 billion yen The operating profit increased by 4.2 billion yen, up 2.5% year-on-year, to 174.5 bill
Slide 6: Dividend
Dividend Payout Approximately 30% of net profit attributable to owners of parent excluding income tax deferred is Ratio considered as a reference of dividends to shareholders DOE JAL will aim at 3% or above, considering the target ROE level(10%) and the target dividend ratio (30%) Dividend per sha
Slide 7: Dividend and dividend forecast (speaker notes)
In this page, I will explain the dividend and dividend forecast. We would like to aim for stable and predictable dividend, considering payout ratio of approxinately 30% and DOE of 3% or above. As we have entered a phase for stable growth, dividend should be stable as well, instead of determined
Slide 8: ESG
ESG Environmental Social Governance Low-Carbon Initiatives ： ・High transparency and strict Introduce fuel-efficient aircraft and ・Further promote workstyle innovation: management oversight： aim for eco-friendly operation Reduce overtime -3 Independent External Directors with ・Continue atmospheric ob
Slide 9: JAL's ESG initiatives (speaker notes)
In this page, I will explain JAL’s ESG initiatives. Regarding environmental initiatives, we are promoting CO2 emission reductions by introducing fuel-efficiency aircraft and other measures, and we are working steadily to reach our goal of reducing CO2 emissions by 23% from the FY2005 level, by FY2
Slide 10: Overview of Financial Results for Mar/18 / Dividend / ESG
OVERVIEW OF FINANCIAL RESULTS FOR MAR/18 DIVIDEND ESG EARNINGS FORECAST FOR MAR/19 REFERENCES 4
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Slide 12: Consolidated Financial Results
Consolidated Financial Results Consolidated Financial Results Mar/18 4th Quarter （JPY Bn） FY2016 FY2017 Diff. y/y (Jan-Mar)(5) Diff. y/y Operating Revenue 1,288.9 1,383.2 +94.2 +7.3% 337.2 +23.7 +7.6% Air Transportation Segment 1,159.3 1,257.2 +97.8 +8.4% 306.7 +24.5 +8.7% Operating Expense 1,118.6
Slide 13: Consolidated financial results (speaker notes)
Now, I will explain our consolidated financial results for fiscal year ending March 31, 2018 in details. Please refer to page 5 for Consolidated Financial Results for fiscal year ending March 31, 2018 in details. 5-S
Slide 14: Changes in Operating Profit (Revenues / Expenses)
Changes in Operating Profit（ Revenues ／ Expenses ） Mar/18 (FY2017) （JPY Bn） ＋ stands for profit increase (revenue increase, cost reduction) ＋4.2Bn ▲ stands for profit decrease (revenue decrease, cost increase) ASK y/y ： ＋1.7% (＋2.5%) RPK y/y ： ＋3.8% Other Revenues Fuel Cargo ＋13.1 & Mail ▲16.4 Maint
Slide 15: Changes in operating profit (speaker notes)
Now, I will explain the changes in operating profit. The revenues from International Passenger increased by 47.7 billion yen due to a strong demand for high yield passenger in and out of Japan as well as more fuel surcharge revenues. Revenues from Domestic Passenger increased by 19.6 billion yen y
Slide 16: Changes in Operating Profit (Market / Others)
Changes in Operating Profit（ Market ／ Others ） Mar/18 (FY2017) ＋ stands for profit increase (revenue increase, cost reduction) （ JPY Bn ） ▲ stands for profit decrease (revenue decrease, cost increase) Impact from +4.2Bn Currency Market ▲2.2Bn (+2.5%) (Excl. Market Impact) Revenue ＋7.0Bn Cost ▲9.2Bn
Slide 17: Market impact and others (speaker notes)
This page explains changes in the operating profit from the viewpoints of market impact and others. Despite of the fuel cost increase caused by higher fuel prices, fuel surcharge revenue and the hedging effect also contributed to increasing operating profit by 8.9 billion yen, compared to the prev
Slide 18: International Passenger Operations
International Passenger Operations International Passenger Change in Revenue （ JPY Bn ） FY2016 FY2017 y/y 4th Quarter y/y ＋47.7Bn (Jan-Mar)(4) (+11.5%) Passenger Revenue 462.9 415.2 462.9 +11.5% 116.4 +15.6% +9.7 (JPY Bn) Passengers 8,394 8,585 +2.3% 2,211 +4.6% ＋38.0 (’000) 415.2 ASK 50,621 51,836
Slide 19: International routes (speaker notes)
On international routes, the number of passenger increased by 2.3% as a result of capacity expansion by new routes, increased frequency, improved service and adjusted cabin configuration to accommodate with the strong demand in economy class. Load factor resulted in 81.0% , which is the highest ev
Slide 20: Domestic Passenger Operations
Domestic Passenger Operations Domestic Passenger Change in Revenue 4th Quarter FY2016 FY2017 y/y (Jan-Mar)(4) y/y ( JPY Bn ） ＋19.6Bn Passenger Revenue (＋3.9%) 498.6 518.2 +3.9% 119.6 +1.7% (JPY Bn) ・Increase in individual passengers (+) Passengers ・Recovery from a plunge in demand by 32,570 34,033 +
Slide 21: Domestic routes (speaker notes)
Next, on domestic routes. The number of passenger increased by 4.5% as a result of the increased demand of individual passengers. The load factor resulted in 71.8%, which exceeded 70% throughout a year for the first time ever. The revenue per passenger decreased by 0.5% year on year due to price
Slide 22: Major Operating Expense Items
Major Operating Expense Items Operating Expenses 4th Quarter (JPY Bn) FY2016 FY2017 Diff. y/y Diff. y/y (Jan-Mar)(3) Fuel 198.7 215.2 +16.4 +8.3% 57.3 +6.3 +12.6% Landing and navigation fees 81.1 83.5 +2.4 +3.0% 21.0 +0.8 +4.3% Maintenance 48.9 62.0 +13.1 +26.8% 10.6 +2.6 +32.7% Sales commissions (A
Slide 23: Major operating expense items (speaker notes)
Now, I will explain the major operating expense items. The costs excluding fuel increased by 73.5 billion yen, the half of the cost increase was linked to the revenue and capacity increase such as Landing and navigation fees or Services. Although the maintenance cost increased due to mainly engin
Slide 24: Major Balance Sheet Items and Cash Flow Items
Major Balance Sheet Items and Cash Flow Items End of End of Balance Sheet (JPY Bn) FY2016 FY2017 Diff. Total Assets 1,728.7 1,854.2 +125.4 Cash and Deposits (1) 404.0 448.8 +44.7 Balance of Interest-bearing Debt (2) 116.0 125.7 +9.7 Future Rental Expenses under Operating Leases 76.4 67.4 ▲8.9 1 Cert
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Slide 26: Revenue of International Routes by Geographic Segment
《 Reference 》 Revenue of International Routes by Geographic Segment Passenger Revenue 4Q Component Ratio FY2017 (%) 3Months 4Q y/y 4Q 4Q 3 Months y/y FY2016 FY2017 America +13.7% +11.0% 26% 26% 23% Europe +22.2% +33.5% 15% 16% 14% Asia/Oceania +9.1% +15.4% 34% 33% 37% China +12.3% +20.4% 10% 11% 12%
Slide 27: Reference: Number of Aircraft
《Reference》 Number of Aircraft End of Mar/17 End of Mar/18 Diff. Owned Leased Total Owned Leased Total Boeing 777-200 12 0 12 12 0 12 - Boeing 777-200ER 11 0 11 11 0 11 - Boeing 777-300 4 0 4 4 0 4 - Boeing 777-300ER 13 0 13 13 0 13 - Large-sized Total 40 0 40 40 0 40 - Boeing 787-8 25 0 25 25 0 25
Slide 28: Details of Financial Results for Mar/18
OVERVIEW OF FINANCIAL RESULTS FOR MAR/18 DIVIDEND ESG DETAILS OF FINANCIAL RESULTS FOR MAR/18 REFERENCES 14
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Slide 30: FY2018 Earnings Forecast
FY2018 Earnings Forecast Revenue and Expenditure Plan Operational Preconditions FY2018 FY2018 （JPY Bn） FY2017 Diff. y/y FY2017 (Plan) (Plan) Operating Revenue 1,383.2 1,455.0 +71.7 +5.2% Int’l +2.4% +6.8% International 462.9 515.0 +52.0 +11.3% ASK Doms +0.8% +1.8% Passenger (1) Domestic 518.2 520.0
Slide 31: Earnings forecast (speaker notes)
From this page, I will explain the earning forecast for the fiscal year ending March 31, 2018. Our earnings forecast for FY2018 remains the same as the announcement on February 28 this year. As of February 28, we made a previous-year comparison based on our FY2017 earnings forecast at this time. N
Slide 32: FY2018 Changes in Operating Profit (Revenues / Expenses)
FY2018 Changes in Operating Profit（ Revenues ／ Expenses ） Mar/19 (FY2018) （JPY Bn） ＋ stands for profit increase (revenue increase, cost reduction) ▲ stands for profit decrease (revenue decrease, cost increase) ASK y/y：＋4.8% ▲7.5Bn RPK y/y：＋4.4% (▲4.3%) Other Revenues Fuel Cargo Passenger Int’l Domes
Slide 33: Changes in operating profit forecast (speaker notes)
Now, I will explain the changes in operating profit. We have a plan that revenue will increase by 71.7 billion yen from the fiscal year ending March 18, 2019, by stable demand of international and domestic passenger business, and increase in fuel surcharge. The settlement adjustment method for do
Slide 34: FY2018 Changes in Operating Profit (Market / Others)
FY2018 Changes in Operating Profit（ Market ／ Others ） Mar/19 (FY2018) ＋ stands for profit increase (revenue increase, cost reduction) （ JPY Bn ） ▲7.5Bn ▲ stands for profit decrease (revenue decrease, cost increase) Fuel/FX Markets FY17 FY18 (▲4.3%) Revenue Cost Singapore Kerosene 67.8 73.0 increase
Slide 35: Market impact and others (speaker notes)
This page explains changes in the operating profit from the viewpoints of market impact and others. As for the market impact, despite of the rising fuel price, the operating profit will rise by 9.0 billion yen year-on year with fuel surcharge and hedging. Apart from the Market impact, we estimate
Slide 36: FY2018 Earnings Forecast: Balance Sheet, Cash Flow
FY2018 Earnings Forecast Balance Sheet End of End of （JPY Bn） Diff. FY2017 FY2018 (Plan) Total Assets 1,854.2 1,933.0 +78.7 Balance of Interest-bearing 125.7 164.0 +38.2 debts Shareholders’ Equity 1,060.3 1,122.0 +61.6 Shareholders’ Equity Ratio (%) 57.2% 58.0% +0.9pt 1 Net Operating Profit After Ta
Slide 37: Balance sheet and cash flow (speaker notes)
In this page 18, I will explain balance sheet and cash flow for fiscal year ending March 31, 2019. As for balance sheet, we plan to utilize more debts with strict capital discipline in growth investment. We estimate the balance of interest-bearing debts will increase by 38.2 billion to 164 billion
Slide 38: 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 Mar/2018) (JPY Bn) Volume increase/ 60% 250 FX Hedging Fuel Market FX +1.6 Approx. Approx. +6.7 40% 40% 40% +17.5 200 241.0 215.2 ＋25.7 Bn 20% (＋12.0%) Approx. Approx. 10% 10% Approx. Approx. 5%
Slide 39: Fuel and FX impact (speaker notes)
This is the last page 19, I will explain the impact of Fuel and FX Markets for the fiscal year ending March31, 2019. We are planning that fuel cost will increase by 25.7 billion yen to 241 billion yen mainly due to the rising fuel price. Please look at the lower right box matrix chart. This shows
Slide 40: Earnings Forecast for Mar/19 / References
OVERVIEW OF FINANCIAL RESULTS FOR MAR/18 DIVIDEND ESG DETAILS OF FINANCIAL RESULTS FOR MAR/18 EARNINGS FORECAST FOR MAR/19 REFERENCES 20
Slide 41: FY2018 Earnings Forecast (Air Transportation Segment)
《 Reference 》 FY2018 (Mar/19) Earnings Forecast（Air transportation Segment） y/y(%) International Passenger FY2017 FY2018 Full-year 1H 2H (Forecast) (Forecast) (Forecast) Passenger Revenue(1) (JPY Bn) 462.9 515.0 +11.3% +13.7% +9.0% Passengers (’000) 8,585 8,994 +4.8% +6.6% +3.0% ASK (MN seat km) 51,
Slide 42: Financial Strategy and Capital Policy ①
《Reference》Financial Strategy and Capital Policy① ※Reproduce, announced on February 28, 2018 22
Slide 43: Financial Strategy and Capital Policy ②
《Reference》 Financial Strategy and Capital Policy② ※Reproduce, announced on February 28, 2018 *1 Free cash flow (3-year aggregate)=Cash flow from operating activities-Cash flow from investing activities *3 Indicates dividend yield of shareholders’ equity *2 3-year aggregate new debts used (new procu
Slide 44: Financial Strategy and Capital Policy ③
《Reference》 Financial Strategy and Capital Policy③ ※Reproduce, announced on February 28, 2018 24
Slide 45: Innovation of Passenger Service System
《Reference》 Innovation of Passenger Service System ※Reproduce, announced on February 28, 2018 25
Slide 46: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines
Slide 47: 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