Sun Country Airlines Holdings, Inc. · NASDAQ:SNCY
Sun Country Airlines — Investor Presentation (March 2024)
24 slides from Sun Country Airlines's investor presentation, March 2024
Slide 1: Sun Country Airlines
Sun Country Airlines March 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by the Company for informational purposes only and not for any other purpose. Nothing contained in this presentation is, or should be construed as, a recommendation, promise or representation by the presenter or the Company or any director, employee, ag
Slide 3: Business Overview
Business Overview
Slide 4: Unique Business Model With Diversified Revenue Streams
Unique Business Model With Diversified Revenue Streams Passenger Segment – FY 2023 Revenue Cargo Segment – FY 2023 Revenue Scheduled Service: $730m • Low cost, leisure-focused carrier Cargo: $100m • Flexible scheduling model capturing peak demand • Operate 12 737-800 freighters for Amazon Charter: $
Slide 5: Business Model Has Facilitated Rapid, Measured Growth…
Business Model Has Facilitated Rapid, Measured Growth… Revenue Has Grown by 80% Since Implementation of New Model (Revenue, $mm) $1,050 $894 $701 $623 $582 $401 2018 2019 2020 2021 2022 2023 Financial performance has demonstrated the growth and resilience inherent in our business model 5
Slide 6: …And Outperformance During COVID, Through the Recovery…
…And Outperformance During COVID,Through the Recovery… 2020 Adj. EBIT Margin 2021 Adj. EBIT Margin 2022 Adj. EBIT Margin 8% (10%) (33%) 7% 5% (9%) (57%) (10%) (58%) 3% 1% (13%) SNCY ULCCs Big Four Mid Sized SNCY ULCCs Mid Sized Big Four SNCY Big Four Mid Sized ULCCs Carriers Carriers Carriers SNCY U
Slide 7: …And Into 2023
…And Into 2023 2023 Adj. Pre-Tax Margin 9.9% 9.5% 8.0% 7.5% 7.5% 4.9% 4.7% 0.9% (1.5%) (8.7%) (14.5%) Industry-leading margins Source: Public filing 7
Slide 8: Scheduled Service Route Network Highly Variable
Scheduled Service Route Network Highly Variable Operate 122 routes serving 108 airports Only 2% of our total Scheduled Service routes are daily, year-round routes 8
Slide 9: Agile Passenger Capacity Built to Capture Peak Demand
Agile Passenger Capacity Built to Capture Peak Demand Seasonal Demand Dictates Monthly Schedule Monthly Seats as % of March 2024 100% 95% 90% 85% 80% 75% 70% 65% 60% 118% more ASMs in March than September 55% 50% Apr-23 Jun-23 Aug-23 Oct-23 Dec-23 Feb-24 ULCC SAVE SNCY Dynamic reallocation of capaci
Slide 10: Model Generates High TRASM, Competitive CASM
Model Generates High TRASM, Competitive CASM Full year 2023 numbers in cents TRASM Adjusted CASM TRASM – Adj CASM Stage Length Adjusted(1) Stage Length Adjusted(1) 13.1¢ 7.8¢ 7.8¢ 12.6¢ 5.3¢ 4.8¢ 9.5¢ 9.7¢ 7.1¢ 3.0¢ 2.6¢ 6.5¢ Spread between unit revenue and unit cost best among low-cost competitors
Slide 11: Sun Country Has Been Growing its Share at MSP
Sun Country Has Been Growing its Share at MSP Cumulative Change in MSP Point-of-Origin Passenger Share Since 2018(1)(2) 10% Current Share 8% 8% 7% 6% 20% 6% 6% 4% 3% 2% 2% 2% 1% 60% (0%) 0% -2% (1%) (2%) -4% (5%) -6% 20% -8% (7%) -10% (9%) (9%) 2018 2019 2020 2021 2022 Q3 2023 SNCY DAL Others MSP sh
Slide 12: Ancillary Revenue Growth Potential
Ancillary Revenue Growth Potential Ancillary Revenue per Passenger Growth (1)(2) Initiative Areas $2 to $5 per Pax of Ancillary Upside $66.69 $53.49 • Enhanced Merchandising • Pricing Optimization $42.89 $40.53 • 3rd Party Products $33.14 $21.70 2018 2019 2020 2021 2022 2023 2024E More upside in anc
Slide 13: Integrated, Leading Charter Business
Integrated, Leading Charter Business • Charter business uses the same aircraft and flight crew as scheduled service and integrated scheduling drives efficiencies • NCAA and professional sports, Casino, VIP, US military • In 2023, 80% contracted revenue under long-term agreements % Charter Flying Und
Slide 14: Schedule Integration Drives Profitability
Schedule Integration Drives Profitability Integrated Scheduling Example Contribution Margin of Example Customer ~20% margin Charter Flights: FLL-CLT, CLT-FLL Added Scheduled Service Flights: MSP-FLL, CLT-MSP, MSP-CLT, FLL-MSP (combined LF 86%) ~5% margin Stand-alone Sun Country charter carrier 14
Slide 15: Unique, Asset-Light Cargo Business
Unique, Asset-Light Cargo Business • 12 Boeing 737-800 freighter aircraft operated on behalf of Amazon • Amazon supplies the aircraft, pays for many flight expenses, including fuel and is responsible for all cargo-related activities (including loading / unloading) • Synergistic with other business l
Slide 16: Responsible Fleet Growth With Low Capital Outlays
Responsible Fleet Growth With Low Capital Outlays Total Aircraft in Service Opportunistic Aircraft Sourcing (# of aircraft) • Acquire aircraft based on demand needs – no order book 70+ 63 • Focus on owning mid-life Boeing 737 NGs with low capital commitments 54 12 • 9 aircraft to support growth in ’
Slide 17: Balance Sheet Positions Sun Country for Growth
Balance Sheet Positions Sun Country for Growth • Highly competitive, rapidly de-leveraging balance sheet • De minimis non-aircraft debt and limited CAPEX requirements given mid-life passenger fleet and asset- lite cargo segment • Expect 2024 CAPEX to be less than one half of the $218m spent in 2023
Slide 18: Differentiated and Unique Aviation Company
Differentiated and Unique Aviation Company High Growth Highly High Margin Synergistic Strong Cash Flow Businesses Resiliency Superior Unit Through Profitability the Cycle Differentiated Contracted Balance Recurring Sheet Revenue Streams Sun Country was built to generate best in class performance in
Slide 19: Appendix
Appendix
Slide 20: Description of Special Items
Description of Special Items Special items, net – in millions USD FY 2019 FY 2020 FY 2021 CARES Act grant recognition - ($62.3) ($71.6) CARES Act employee retention credit - (2.3) (0.8) Contractual obligations for retired technology 1 7.6 - - Sale of airport slot rights 2 (1.2) - - Other 3 0.7 - - T
Slide 21: Adjusted Operating Income
Adjusted Operating Income Adjusted operating income – in millions USD FY 2020 FY 2021 FY 2022 FY 2023 Operating revenue $401.5 $623.0 $894.4 $1,049.6 Operating income 17.4 111.9 55.7 127.5 Special items, net (64.6) (72.4) - Stock compensation expense 2.1 5.6 2.8 9.3 Other adjustments 1 4.9 3.0 - Tax
Slide 22: Adjusted EBITDA
Adjusted EBITDA Adjusted EBITDA Reconciliation – in millions USD FY 2019 FY 2022 FY 2023 Net income (loss) $46.1 $17.7 $72.2 Provision for income taxes 14.1 6.3 22.0 Interest expense 17.2 31.0 42.6 Interest income (0.9) (4.5) (10.2) Special items, net 7.1 - - Secondary offering costs - - 1.1 Tax rec
Slide 23: Adjusted Pre-Tax Margin
Adjusted Pre-Tax Margin Adjusted operating income – in millions USD FY 2022 FY 2023 Net income (Loss) $17.7 $72.2 Add: Provision for income tax expense 6.3 22.2 Income before income tax, as reported 24.0 94.2 Stock compensation expense 2.8 9.3 Gain on asset transactions, net (0.3) - Tax receivable a
Slide 24: Adjusted CASM
Adjusted CASM Adjusted CASM – FY 2023 Operating Per ASM Expenses - mm (cents) CASM $922.1 12.43 Less: Aircraft Fuel 246.7 3.33 Stock Compensation Expense 9.3 0.12 Cargo Expenses, Not Already Adjusted Above 103.0 1.39 Sun Country Vacations 1.1 0.01 Leased Aircraft, Depreciation Expense 6.7 0.09 Adjus
Sun Country Airlines Holdings — Investor Presentation (March 2024) on 6ix