48 slides from Jazeera Airways Co. (ksc)'s investor presentation, Feb 24, 2020
Slide 1: FY20 Corporate Presentation
FY20 Corporate Presentation
Slide 2: Disclaimer
Disclaimer The content and information of this document is only intended to provide users with financial and operational information about Jazeera Airways. No warrant or representation is made by Jazeera Airways for the contents of this document and in no way is the material provided in it intended
Slide 3: Agenda
Agenda The Group Today Financial Performance Operational Performance FY18-20 Business Plan Market Analysis
Slide 4: The Group Today
The Group Today 2.4 13 37 830 million aircraft airports employees passenger 9 A320s In the Middle East, + 4 A320neos Europe and Asia Introduction of new Five more 1st LCC to serve Strong fares categories A320neos in 2020 GCC-UK route management
Slide 5: The Group Today
The Group Today A low cost Kuwaiti flag carrier that commenced operations in 2005 and has since emerged as a leading operator in the region Listed on Boursa Kuwait, and operates regionally and internationally serving top destinations in the Middle East, the Indian Subcontinent and Europe from Kuwait
Slide 6: Milestones
.ayjul Jazeera. 2.19 > 2015 Capital reduction Incorporation fosbexing word Park&sFl ae class operational Parker Fly ; standards i 95-22 10-27 = 2012 Io (2018 2019 Ranked world 2014 a Inauguration Launch of renee Ranked world oa? Rebranding London fights : ieader in OTP 2016 . in tne Middle East 3005
Slide 7: Financial Performance
Financial Performance Jazeera team taking delivery of the second A320neo in October 2019
Slide 8: Financial Highlights
Financial Highlights Operating Operating Net Revenue Profit Profit +25.9% +108.7% +124.1% FY19: KWD103.7 mn FY19: KWD14.2 mn FY19: KWD14.9 mn* FY18: KWD82.4 mn FY18: KWD6.8 mn FY18: KWD6.7 mn * Includes KWD1.2 mn impact of engine sales
Slide 9: FY17-19 Financial Performance
FY17-19 Financial Performance KWD mn FY17 FY18 FY19 YoY CHANGE Passenger Revenue 52.3 74.9 91.1 21.6% Ancillary Revenue 4.3 6.0 8.3 38.0% Facilities Revenue 0.0 1.2 4.3 245.8% Total Revenue 56.7 82.4 103.7 25.9% EBITDAR 17.8 19.8 30.6 54.0% Adjusted EBITDAR 17.8 21.8 30.6 43.2% EBITDA 8.5 8.3 17.0 1
Slide 10: FY17-19 Financial Performance
FY17-19 Financial Performance REVENUE BREAKDOWN REPORTED AND ADJUSTED REPORTED AND ADJUSTED FY17-19 EBITDA MARGINS FY17-19 NET MARGINS FY17-19 1.5% 4.1% 7.6% 7.3% 8.0% 16.4% 15.1% 14.5% 14.4% 11.8% 9.9% 13.3% 92.3% 91.0% 87.9% 10.0% 8.1% FY17 FY18 FY19 FY17 FY18 FY19 FY17 FY18 FY19 Passenger Revenue
Slide 11: FY17-19 Financial KPIs
FY17-19 Financial KPIs REVENUE AND COST / REVENUE AND COST / REVENUE AND COST / EMPLOYEE FY17-19 AIRCRAFT FY17-19 PASSENGER FY17-19 KWD mn KWD mn KWD 128 125 41.8 43.2 10.0 41.4 9.6 105 105 36.1 115 8.3 35.5 8.1 89 8.6 37.3 84 78 6.9 27.9 27.2 27.0 70 6.3 6.2 5.4 830 10.4 2.4 645 8.6 2.0 540 7.0 1.4
Slide 12: Cost Breakdown
Cost Breakdown TOTAL COSTS BREAKDOWN TOTAL COSTS BREAKDOWN FY18 FY19 Overflying, Landing Direct Staff Costs Direct Staff Costs Overflying, Landing & Ground Handling 12.4% 12.5% & Ground Handling 14.2% 14.4% Depreciation Depreciation 2.1% 3.0% Others Others 7.3% 7.6% G&A G&A 7.5% 7.4% Fuel Fuel 26.6%
Slide 13: Fuel Prices
Fuel Prices FUEL AS PERCENT OF REVENUE AND BRENT SWAP VS. SINGJET SWAP COST (USD/BBL) 84.9 29.1% 76.8 26.7% 65.0 26.6% 24.6% 71.6 64.1 23.0% 24.4% 54.8 21.2% 18.2% 13.6% FY17 FY18 FY19 FY17 FY18 FY19 Fuel / Revenue Fuel / Total Costs Fuel / Direct Costs Brent Swap Singjet Swap • Increase in fuel pri
Slide 14: Capital Structure
Capital Structure ASSETS BREAKDOWN FY19 FUNDING BREAKDOWN FY19 PP&E End of Service Benefits 12.5% Deferred Revenue Cash 3.4% 6.3% Security Deposits 14.3% Maintenance with Lessors Payables 1.8% 11.3% Advance for Receivables Maintenance 13.9% 7.0% Inventories Accounts 0.2% Payable 28.8% Security Sepos
Slide 15: Capital Structure
Capital Structure CAPEX & NET WORKING CAPITAL FY17 - 19 KWD mn • FY19 was the first year of IFRS 16 implementation, which replaced the earlier leasing standard IAS 17 and 13.1 had a significant impact on assets and liabilities 9.7 10.0 • PP&E decreased slightly during the year driven by 9.0 lower ca
Slide 16: Financial Ratios
Financial Ratios REPORTED ROA, ROE & ROIC ADJUSTED ROA, ROE & ROIC EPS, DPS & PAYOUT RATIO FY17-19 FY17-19C FY17-19 37.1% 105% 29.7% 90% 85% 21.6% 21.6% 22.9% 24.0% 17.6% 20.4% 17.4% 17.4% 74.7 15.6% 67.5 16.5% 14.7% 10.8% 14.7% 13.8% 41.2 35.0 33.3 35.0 10.6% 9.0% FY17 FY18 FY19 FY17 FY18 FY19 FY17
Slide 17: Summary Financial Statements
Summary Financial Statements Income Statement Balance Sheet FY17 FY18 FY19 FY17 FY18 FY19 (KWD mn) (KWD mn) Passenger revenue 52.3 74.9 91.1 Cash 22.8 6.5 23.8 Total Current Assets 27.0 24.1 48.5 Ancillary revenue 4.3 6.2 8.3 Net fixed assets 13.8 22.0 82.7 Terminal revenue 0.0 1.2 4.3 Total Assets
Slide 18: Operational Performance
Operational Performance Moments before the first flight took off to LGW, Jazeera Airways Chairman with the British Ambassador to Kuwait, German Ambassador to Kuwait, Director General of Kuwait’s DGCA and the Head of Security for Airports at MoI.
Slide 19: Operational Highlights
Operational Highlights Passengers Load Factor Utilization Yield +20.6% +2.3% +5.8% +1.6% FY19: 2.4 mn FY19: 77.5% FY19: 14.4 hrs FY19: KWD41.5 FY18: 2.0 mn FY18: 75.2% FY18: 13.6 hrs FY18: KWD40.8
Slide 20: Operational Headlines
Operational Headlines eCommerce Ancillary Sales Revenue 16.3% 35.0% vs. FY18 vs. FY18
Slide 21: Operational Headlines
Operational Headlines Expanded Grew Strengthened network fleet team Launched 8 new routes: 3 in Took delivery of three new Hired four new key positions: Europe, 2 in the Middle East A320neos in 4Q19, bringing our COO, VP - Engineering & and 3 in Asia. The milestone fleet to 13 aircraft. Maintenance,
Slide 22: Operational Milestones
Operational Milestones New routes New services Operations • Sabiha Gokcen, Istanbul: • Priority service • Signed Flight Hour Services April 2019 • Self-check-in kiosks at T5 agreement with Airbus • Bodrum: May 2019 • Jazeera Holidays • Signed new ground handling • London: October 2019 agreement to s
Slide 23: Milestones in Images
Milestones in Images Signed Flight Hour Services Launch of flights to LGW Launch of flights to Al Ain Agreement with Airbus Aviation Company of the Year Signed ground handling Launch of flights to Osh Launch of flight to Kathmandu agreement with SGC Introduced self-check-in kiosks Launch of flight t
Slide 24: FY19 Market Shares
100% FY19 Market Shares Only airline operating LGW. Market share for LGW + LHR: 1.6%. 10% 78% 57% 100% 48% 41% 41% Destinations launched in: 34% 23% 49% 29% 1% 13% 45% 22% 13% 42% 100% Bodrum: May 2019, on hold in 4Q 41% 100% London: October 2019 12% 66% 21% 25% Kathmandu: October 2019, only airline
Slide 25: Geographic Distribution
Geographic Distribution Passengers Geographic Passengers Geographic Distribution 2018 Distribution 2019 East Europe Egypt East Europe Egypt 5.7% 33.3% 7.6% 28.9% Levant Levant London 9.3% Others 6.5% 0.3% 2.9% Others 3.4% Indian Indian GCC Subcontinent GCC Subcontinent 35.4% 13.3% 35.9% 17.3% • Oper
Slide 26: FY19: Jazeera Market Share
FY19: Jazeera Market Share Market Share of Total Market Share on Passengers FY15-19 Operating Routes FY15-19 27.0% 2.0 2.4 1.3 2.0 2.4 1.4 15.5% 21.2% 1.2 13.4% 1.2 22.4% 1.2 9.9% 10.9% 14.1% 10.4% 1.2 15.6% 12.4 12.8 13.0 9.5 8.9 8.8 9.9 10.5 7.7 5.7 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY1
Slide 27: FY17-19 Expansions
FY17-19 Expansions New Destinations: West + East Middle Indian 6 Europe 2 East 8 Subcontinent • London Gatwick • Al Ain, UAE • Mumbai, India • Sabiha Gokcen, Istanbul • Dammam, KSA • Hyderabad, India • Bodrum, Turkey • Ahmedabad, India • Osh, Kyrgyzstan • Kochi, India • Tbilisi, Georgia • New Delhi,
Slide 28: Key Operational Indicators
Key Operational Indicators PASSENGERS FY17-19 UTILIZATION FY17-19 46.4% 25.3% • Servicing the large expat FY19 2.4 FY19 14.4 community drove continuous offering of new destinations mn hrs/day FY18 2.0 20.6% FY18 13.6 11.1% 6.8% 5.8% • Improved asset utilization FY17 1.4 FY17 10.9 allowed more flying
Slide 29: Key Operational Indicators
Key Operational Indicators TOTAL YIELD FY17-19 PASSENGER YIELD FY17-19 FY19 41.5 1.6% FY19 38.0 0.9% • Yield improvement in FY19 was -2.1% driven by maturity on established KWD KWD FY18 40.8 FY18 37.7 -2.1% routes launched in FY18 and -10.0% -10.1% favorable market dynamics FY17 41.7 FY17 38.5 Growt
Slide 30: Key Operational Indicators
Key Operational Indicators LOAD FACTOR FY17-19 CASK, CASK EX-FUEL FY17-19 8.0 • Load factor increased for the FY19 77.5% 6.0 7.1 6.5 third consecutive year to 6.2 US cents 5.6 reach 77.5% 4.6% 4.0 4.7 4.6 percent FY18 75.2% 2.3% 2.0 1.3% • Ongoing evolution in service FY17 73.9% 0.0 offering led to
Slide 31: Fleet
Fleet 13 Moved to A320neo orders for: • Significant fuel savings up to 18% over traditional engines • Allows more flying time expanding flying radius to +6.5hrs aircraft • Improved customer experience due to lower noise 3 new A320neo delivered in Q4 2019 9 A320s + 4 A320neos Five more A320neos in 20
Slide 32: Jazeera Facilities
Jazeera Facilities The Nepalese Ambassador to Kuwait attends the inaugural flight to Kathmandu in November
Slide 33: Jazeera Facilities
Jazeera Facilities A vertical integration that Structurally managed under Airport facility management and improves customer experience and Sahaab Aviation Services (SAS), a services provision is the new diversifies revenue generation into 100%-owned subsidiary of Jazeera segment Jazeera is penetrati
Slide 34: Jazeera Terminal (T5)
Jazeera Terminal (T5) Jazeera Terminal (T5): • Jazeera Terminal is the flagship of Jazeera facilities and the first privately-owned terminal in the region • Attached to the main terminal of Kuwait International Airport and connected to Jazeera’s dedicated gates Jazeera Terminal (T5) • Served all Jaz
Slide 35: Jazeera Terminal (T5)
Jazeera Terminal (T5) FY19 KWD4.3 mn KWD2.1 mn KWD1.2 mn Revenue EBITDA Net Profit FY18 KWD1.2 mn KWD0.3 k -KWD534 k Revenue EBITDA Net Profit FY19 operations updates: Backlit screens DGCA + PACI VIV, business Visa entry 2.4 Retail + advertising numbers: lounge: desks: occupancy: areas: Completed fo
Slide 36: Other Facilities
Other Facilities Park & Fly • Complementing the customer- centric T5, Jazeera Airways’ Park & Fly service connects passengers to T5 through a shuttle Park & Fly • Located at the Jazeera Airways Jazeera City headquarters opposite the Amiri Check-in Fees Terminal Headquarters • Park & Fly is ideal for
Slide 37: FY18-20 Business Plan
FY18-20 Business Plan Jazeera team with H.E. the Kuwaiti Ambassador to UK at the landing of our first flight at LGW
Slide 38: 2020 Planned Developments
2020 Planned Developments Expand Expand Introduced network fleet new fares New routes planned: Five new A320neos to be Introduced new fare categories • Sharjah, UAE delivered in 2020 at the start of 2020 to • Chittagong and Dhaka, Bangladesh enhance our position as a • Qassim and Hail, KSA leading L
Slide 39: 2020 Planned Developments
2020 Planned Developments • From January 1, 2020, Jazeera cancelled the Business Class to become a full low-cost economy carrier, with the exception of flights to Cairo and LGW • This change in offering provides better revenue opportunities with the availability of more seats in the high load factor
Slide 40: Cost Saving Initiatives
Cost Saving Initiatives CFM PBH* for LEAP Engines • Agreement with CFM, the original equipment manufacturer (OEM) of the LEAP engines on the A320neo aircraft, covers all maintenance costs during the entire lifecycle of Jazeera’s A320neo engines • Jazeera pays an hourly charge per engine flying hour
Slide 41: Cost Saving Initiatives
Cost Saving Initiatives Part 145 Line Maintenance • Kuwait Airways Engineering has been managing Jazeera’s line maintenance since inception • The growth of Jazeera’s fleet has enabled it to execute part of the line maintenance in-house, achieving operational efficiencies • Received the Part 145 appr
Slide 42: FY18-20 Business Plan
FY18-20 Business Plan Fleet Destinations Load Factor Utilization FY18: 8 aircraft FY18: 26 airports FY18: 75.2% FY18: 13.6 hours FY19: 13 aircraft FY19: 37 airports FY19: 77.5% FY19: 14.4 hours FY20: 17 aircraft FY20: 44 airports FY20: +75% FY20: +14 hours (Previous FY20 target: 15) (Previous FY20 t
Slide 43: FY18-20 Business Plan
FY18-20 Business Plan Fleet Load Factor Destinations 34 40 15 73.9% 75.2% 75.3% 75.9% 69.3% 26 12 20 9 18 7 7 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 FY20 Target 2020 Target Aim to Target 2020 achieved fleet: 17 achieved improve achieved Target: aircraft load factor 44
Slide 44: Market Analysis
Market Analysis First Jazeera aircraft landing at LGW with our first flight on October 27, 2019
Slide 45: Market Analysis
Market Analysis KUWAIT INTERNATIONAL KUWAIT EXPENDITURE ON AIRPORT TRAFFIC FY15-19 * OUTBOUND TRAVEL FY14-18 ** 16.8% 15.4% • Persistent growth in Kuwait 3,947 15.4 12.7% International Airport traffic 14.8 13.7 3,727 3,719 3,708 reporting a FY15-19 CAGR of 8.5% 11.8 11.2 6.1% • Expenditure on outbou
Slide 46: Market Analysis
Market Analysis TRAFFIC AND CAPACITY NEW DELIVERIES BY SEGMENT TOTAL FORECASTED TRAFFIC FY14-19 * FY17-37 ** GROWTH FY16-36 ** 13.2% 12.6% 11.9% 11.4% 1,214 7.0% 10.9% 9.9% 8.0% 5.9% 7.5% 6.9% 4.9% 4.9% 6.3% 6.8% 6.5% 7.4% 4.4% 4.1% 6.6% 6.7% 6.0% 6.1% 6.1% 612 4.7% 533 466 4.6% FY14 FY15 FY16 FY17
Slide 47: Contacts
Contacts For more information please contact: Mostafa El-Maghraby Head of Investor Relations investorrelations@jazeeraairways.com Jazeera Airways KSC is listed on the Kuwait Stock Exchange Bloomberg: Jazeera KK Reuters: JAZK.KW Stay up to date with the latest investor information: investorrelations.
Slide 48: Thank you
Thank you