Boc Aviation Limited · HKEX:2588
Boc Aviation — FY2021 Earnings Presentation
33 slides from Boc Aviation's earnings presentation, Mar 10, 2022
Slide 1: 2021 Final Results Review
2021 FINAL RESULTS REVIEW MARCH 2022
Slide 2: Disclaimer
Disclaimer This presentation contains information about BOC Aviation Limited (“BOC Aviation”), current as at the date hereof or as at such earlier date as may be specified herein. This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solic
Slide 3: 2021 Overview
2021 OVERVIEW ©) BOC AVIATION 3
Slide 4: Our Performance in 2021 Was Resilient
Our Performance in 2021 Was Resilient Improving core business1 Strong balance sheet1 Total revenues and other income 6% Total assets 1% US$2,183 million US$23.9 billion Total available liquidity 18% Core lease rental contribution2 3% US$6.0 billion US$696 million Total equity 10% Profit before tax 1
Slide 5: Successfully Navigated Through a Challenging Year
Successfully Navigated Through a Challenging Year • Cumulative earnings of US$5.5 billion achieved over 28 years1 • Paid over US$1 billion in dividends to shareholders • Improved profitability in 2021 • Record revenues of US$2.2 billion • NPAT rose 10% to US$561 million • Ended 2021 with a record hi
Slide 6: How We Invest
How We Invest Number of aircraft delivered, purchased and sold Global Opportunistic PLB Financial European Covid-19 Crisis acquisitions in the Crisis down cycle 41 19 24 13 16 (3) 9 14 41 22 45 27 16 7 4 6 22 18 17 29 14 31 21 43 5 58 61 6 5 44 48 50 (5) 12 41 27 31 17 22 22 23 7 14 11 (12) (12) (3)
Slide 7: Resilient Performance in a Difficult Market
Resilient Performance in a Difficult Market Fleet growth underpins growth in revenues Improving profit before tax US$ million US$ million 2,183 774 1,976 2,054 639 563 2019 2020 2021 2019 2020 2021 Consistently high core lease rental contribution1 Increasing net profit after tax US$ million US$ mill
Slide 8: Lease Rental Income Continues to Dominate Revenue
Lease Rental Income Continues to Dominate Revenue Lease rental income consistently over 85% of total revenues and other income Interest, fee income US$ million and others 2,183 12.6% 2,054 226 274 Net gain on sale of 44 44 aircraft 2.0% 1,865 1,784 2020 2021 Lease rental income Lease rental income N
Slide 9: Long-Term Leases Enhance Revenue Visibility
Long-Term Leases Enhance Revenue Visibility We have a long average remaining lease Well-dispersed scheduled lease expiries2 term1 Number of years 300 82.3% 100% 8.4 8.6 8.3 Average remaining lease term of 8.3 years 80% 200 60% 100 40% 2.0% 2.4% 4.6% 3.4% 4.2% 20% 0 0% 2022 2023 2024 2025 2026 2027 a
Slide 10: Lease Yields Reflect Market Environment
Lease Yields Reflect Market Environment Lease rate factor1 high at around 10% Reduced cost of debt2 3.6% 3.2% 2.9% 10.7% 10.0% 9.7% 2019 2020 2021 Lower net lease yield3 8.4% 7.9% 7.6% 2019 2020 2021 2019 2020 2021 All data as at 31 December 2021 Notes: 1. Calculated as operating lease rental income
Slide 11: Globally Diversified Portfolio
Globally Diversified Portfolio Lease portfolio diversified by customer1,2 …and increasingly diversified by geography1,3 Qatar Airways 9.0% Middle East and Africa United Airlines 11.7% Chinese Mainland, 7.9% Hong Kong SAR, Macau SAR and Taiwan Air China 27.8% Americas 5.1% 16.7% Lion Air Group 5.1% O
Slide 12: Operating Cash Flow Net of Interest
Operating Cash Flow Net of Interest Operating cash flow net of interest1 Operating cash flow net of interest1 for FY2021 US$ million • Operating cash flow in excess of US$1.3 billion; matching 2020 despite a challenging (478) environment 1,805 1,327 • Strong collection efforts in 2022 will further e
Slide 13: Diverse Funding Channels Utilised in 2021
Diverse Funding Channels Utilised in 2021 Sources and Uses of Cash US$ million Sources Uses 6,045 211 (2,124) 825 670 Undrawn 1,500 committed (1,186) 5,560 credit facilities 1,327 (763) (225) (158) Cash and 408 485 cash 1 equivalents Cash and Net cash Bond Bank loans Asset sales Others CAPEX Bond Lo
Slide 14: Stable Debt Structure
Stable Debt Structure US$ billion Loans (0.8) Loans 0.7 Bonds (1.2) (0.2) Bonds 1.5 16.8 16.8 Debt 14.8 14.6bn outstanding since 1 Jan 21 Indebtedness as at Repayment Net RCF repayment New debt Indebtedness as at 1 January 2021 31 December 2021 87% of debt unchanged from 1 January 2021 and debt to e
Slide 15: Flexible Capital Structure and Ample Backstop Liquidity
Flexible Capital Structure and Ample Backstop Liquidity Sources of debt1 Outstanding debt amortises over a long term BOC BOC US$ billion 12% 9% Loans Loans 24% 25% 15 10 Bonds Bonds 64% 66% 5 0 2020 2021 2022 2023 2024 2025 2026 2027 Loans Bonds Near term debt maturities well covered by Increasing u
Slide 16: Popular and Fuel-Efficient Fleet
Popular and Fuel-Efficient Fleet Our aircraft portfolio Aircraft type Owned aircraft Managed aircraft Aircraft on order1 Total Airbus A320CEO family 102 15 0 117 Airbus A320NEO family 91 0 35 126 Airbus A330CEO family 10 1 0 11 Airbus A330NEO family 6 0 0 6 Airbus A350 family 9 0 0 9 Boeing 737NG fa
Slide 17: Steadily Growing Balance Sheet and Aircraft Fleet
Steadily Growing Balance Sheet and Aircraft Fleet Growing balance sheet US$ billion 23.6 23.9 18.3 19.8 4.3 16.0 4.7 3.3 3.0 2.3 16.8 18.9 19.6 13.7 15.0 2017 2018 2019 2020 2021 1 Aircraft NBV Other assets Disciplined increase in fleet size Number of owned aircraft 380 358 303 317 287 2017 2018 201
Slide 18: High Proportion of Fixed Rate Leases and Debt
High Proportion of Fixed Rate Leases and Debt Proportion of fixed rate leases rising steadily1 Stable proportion of fixed rate debt2 By net book value 13% 6% 17% 23% 25% 24% 94% 83% 87% 77% 75% 76% 2019 2020 2021 2019 2020 2021 Fixed rate Floating rate Fixed rate Floating rate All data as at 31 Dece
Slide 19: New Investments Drive Committed Lease Revenues
New Investments Drive Committed Lease Revenues Committed future lease revenues of more than 2022 capex expected around US$3 billion US$17 billion US$ billion US$ billion 2.9 4.6 Scheduled to be delivered 3.2 17.4 2.1 1.7 14.5 Owned portfolio 2019 2020 2021 2022E 1 Future committed revenues Committed
Slide 20: Conclusion
Conclusion • Improved performance achieved in a challenging environment • Record revenues and other income of US$2.2 billion • Operating cash flow net of interest paid stable at U$1.3 billion • Net profit after tax of US$561 million • Maintained dividend payout ratio of 35% • Focus on sustainable lo
Slide 21: Appendices
APPENDICES ©) BOC AVIATION
Slide 22: The BOC Aviation Journey
The BOC Aviation Journey Ownership Total assets SALE established with 50:50 joint US$ billion 1993 ownership between Singapore Airlines and Boullioun Aviation Services Temasek and GIC each became 1997 14.5% shareholders 1997 >0.3 2000 >1 Bank of China acquired 100% of 2006 >3 2006 SALE on 15 Dec 200
Slide 23: BOC Aviation – Who Are We?
BOC Aviation – Who Are We? Bank of China US$23.9 billion 70% owned by BOC Total assets Listed on HKEX A- Investment grade credit ratings from S&P and Fitch HKEX code: 2588 521 3.9 years; 8.3 years Aircraft in fleet1 Average fleet age & lease term remaining2 28 US$5.5 billion Years of unbroken profit
Slide 24: Globally Diverse Management Team
Globally Diverse Management Team Robert Martin Zhang Xiaolu Steven Townend David Walton Deng Lei Paul Kent Managing Director & Vice-Chairman & Deputy Managing Deputy Managing Chief Commercial Chief Commercial Chief Executive Deputy Managing Director & Chief Director & Chief Officer (Asia Pacific Off
Slide 25: Core Competencies - BOC Aviation Track Record
Core Competencies - BOC Aviation Track Record Since inception in 1993: • Purchasing 890 aircraft purchased totalling approximately US$51 billion • Leasing More than 1,130 leases executed with 170 airlines in 57 countries and regions • Financing More than US$37 billion in debt raised since 1 January
Slide 26: Air Traffic Recovery
Air Traffic Recovery Countries with significant domestic markets Strong global air cargo performance demonstrate rising passenger demand 15 20% Air traffic equivalent (Changes vs 2019) 10 Cargo tonne-kilometres (Changes vs 2019) 0% 5 CTK (%) vs 2019 0 -20% -5 -40% -10 -60% -15 -20 -80% -25 -100% -30
Slide 27: Forward Bookings Suggest Recovery in Airline Schedules and Aircraft Utilisation Rates
Forward Bookings Suggest Recovery in Airline Schedules and Aircraft Utilisation Rates Global airlines flight schedules (% change vs Rising utilisation rates 2019) 1st Jan 2020 – 7 Mar 2022 100% Age 0-12: 89% 80% Age 13-18: 77% Age 19-24: 72% 60% Age 25+: 60% 40% 20% 0% Mar-20 Jul-20 Nov-20 Nov-21 Ma
Slide 28: Return of International Air Travel
Return of International Air Travel Surge in US outbound bookings as markets Strong transatlantic travel demand open 7D rolling average North Atlantic ASKs (rebased to 24 Oct) 180 160 140 120 100 80 60 Oct 21 Nov 21 Nov 21 Dec 21 Dec 21 US travel ban lifted London-New York London-Los Angeles New York
Slide 29: China Passengers Delay Regional Air Traffic Recovery
China Passengers Delay Regional Air Traffic Recovery Impact of China on ASEAN tourist arrivals Number of passengers from China Country 2019 2021 Change Indonesia 3,343,184 46,296 -99% Thailand 18,849,446 100,109 -99% Laos 564,035 37,672 -93% Cambodia 4,062,050 75,864 -98% Vietnam 4,879,386 24,558 -9
Slide 30: Airlines' Capital Investments Are Projected to Exceed US$120 Billion by 2024
Airlines’ Capital Investments Are Projected to Exceed US$120 Billion by 2024 Annual airline capex – US$ billion 150 100 50 0 Narrowbody Widebody All data as at 31 December 2021 Source: BOC Aviation Analysis 30
Slide 31: 2021 ESG Highlights
2021 ESG Highlights Environmental Social Governance • 100% carbon neutral for • More than US$50,000 in • Three female Board of direct emissions donations Directors out of 11 • Direct GHG emissions • 1,400 volunteer hours in local • Three nationalities on the reduction ahead of target communities Boa
Slide 32: Rising Jet Fuel Prices
Rising Jet Fuel Prices Jet fuel price, US$/barrel 200 180 160 140 120 100 80 60 40 20 0 At highest point since 2008 Source: Bloomberg (9 March 2022) 32
Slide 33: www.bocaviation.com
www.bocaviation.com BOC Aviation Limited 8 Shenton Way #18-01 Singapore 068811 Phone +65 6323 5559 Facsimile +65 6323 6962 Incorporated in the Republic of Singapore with limited liability Company Registration No. 199307789K 33