Aeroflot · RUS:AFLT
Aeroflot — Q2 2020 Earnings Presentation
45 slides from Aeroflot's earnings presentation, Aug 31, 2020
Slide 1: Aeroflot Group Q2 & 6M 2020 IFRS Results
AEROFLOT GROUP Q 2 & 6 M 2 0 2 0 I F R S R E S U LT S 31 August 2020 Speakers: Andrey Chikhanchin – Deputy CEO for Commerce and Finance Andrey Panov – Deputy CEO for Strategy, Service and Marketing Ivan Batanov – Head of Revenue Management
Slide 2: Disclaimer
Disclaimer This document has been prepared by PJSC “Aeroflot” (the “Company”). By attending the meeting where the presentation is made, or by reading the presentation slides, you agree to the following. This document does not constitute or form part of any advertisement of securities, any offer or i
Slide 3: Aeroflot Group 6M 2020 Highlights
Aeroflot Group 6M 2020 Highlights PAX Yield Revenue External Factors Million PAX RUB / RPK Billion RUB - 54.2 % - 2.5 % - 52.0 % COVID-19 3.79 311.4 28.2 mln 3.69 149.4 12.9 mln 6M 2019 6M 2020 6M 2019 6M 2020 6M 2019 6M 2020 Note: immaterial deviations throughout the presentation are explained by r
Slide 4: Market Update and Operating Results
1. Market Update and Operating Results 2. Strategy 2028 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 4
Slide 5: Overview of the Russian Market
Overview of the Russian Market Passenger Traffic: Market vs Aeroflot Group Key Market Players Russian Air Transportation Market (million PAX) Change in PAX million incl. PAX of Russian and Foreign Carriers and intl. transit PAX -15.3 (53.6)% International Routes 12.9 66.2 Domestic Routes -7.1 -3.4 3
Slide 6: Material Impact of COVID-19 Starts from March
Material Impact of COVID-19 Starts from March Monthly PAX Traffic (Russian Carriers) Capacity (Russian Carriers) and PLF Million PAX Billion ASK, PLF in % Jan Feb Mar Apr May Jun Jul Jan Feb Mar Apr May Jun Jul 30.5 8.9 8.0 26.7 23.5 6.8 6.4 17.6 79% 79% 75% 69% 2.8 9.5 58% 4.0 4.4 0.7 0.9 44% 39% 6
Slide 7: Domestic Segment Shows Gradual Recovery
Domestic Segment Shows Gradual Recovery PAX Traffic of Russian Airports Q3 – International Segment PAX dynamics based on 33 key Russian airports 20% Flights reopened starting from 7% 7% 1 August with following countries: 0% • United Kingdom • Turkey -20% • Tanzania (25)% • Switzerland -40% Q3 – Dome
Slide 8: Aeroflot Group Performance Across Different Brands
Aeroflot Group Performance Across Different Brands Brand Business Model 6M 2020 PAX Contribution1 and Dynamics July 2020 • Flagship carrier -56.1% • Premium product (4 Stars) 17.8 -72% PAX Premium • High income and middle class 60.4% 7.8 7.8 • Hub and spoke model -74% ASK 6M 2019 6M 2020 • Scheduled
Slide 9: Pobeda Airline: Timely Value Proposition
Pobeda Airline: Timely Value Proposition Overview Total PAX dynamics in 2020 mn PAX, change y-o-y 1.0 Operations restarted in June 2020 0.9 after suspension in April and May amid demand decrease 0.8 0.7 2.9 mm PAX transported in 6M 2020 (-35.8% y-o-y) 0.4 90.1% PLF LF remained high in 6M 2020 despit
Slide 10: Strategy 2028
1. Market Update and Operating Results 2. Strategy 2028 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 10
Slide 11: Key Goals of the Updated Strategy
Key Goals of the Updated Strategy Key Strategic Goals Stronger Accelerated position of development 130 PAX m Increase of Aeroflot Group’s PAX of Pobeda Airline to improve air travel Aeroflot Airline in the premium segment due to affordability and the Group’s stimulate demand transformation Aeroflot
Slide 12: The Group's Target Network and Fleet Allocation
The Group’s Target Network and Fleet Allocation Medium-haul flights Long-haul flights ~600 aircraft by 2028 Network Fleet Network Fleet High-yield flights from Moscow Selected domestic All destinations routes Key premium international routes Destinations with high demand Domestic and int
Slide 13: Aeroflot Airline: 2028 Vision
Aeroflot Airline: 2028 Vision The network development (Sheremetyevo Airport) Aeroflot Airline’s fleet development strategy Long-haul flights Medium-haul flights Decrease in aircraft types by transferring of Russian- manufactured aircraft to Rossiya and B737-800 to Pobeda 2028 Development of narrow-b
Slide 14: Pobeda Airline: 2028 Vision
Pobeda Airline: 2028 Vision Pobeda has become one of the most efficient low-cost Pobeda’s fleet development strategy carriers within only 5 years 16.1 hours Global leader by aircraft utilization(1) Transfer of Boeing 737-800 1 from the Group’s airlines to Pobeda 19 % Top-3 among global airlines by p
Slide 15: Rossiya Airline: 2028 Vision
Rossiya Airline: 2028 Vision The key goals of Rossiya Airline strategy Network development bypassing Moscow Establishing a center of competence for Russian-manufactured aircraft development Fulfilling social functions of the Group Feeder traffic for Aeroflot’s flights to Moscow Rossiya in 2028 The l
Slide 16: Network and Schedule Overview
1. Market Update and Operating Results 2. Strategy 2028 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 16
Slide 17: Aeroflot Group Scheduled Flights Revenue Units
Aeroflot Group Scheduled Flights Revenue Units RUB RUB 6M Yield (PAX Revenue / RPK) 0.7% 6M RASK (PAX Revenue 1.1% / ASK) 3.2% RUB / RPK RUB / ASK (11.2)% (1.1)% (16.1)% (20.2)% 3.94 (2.5)% 3.03 3.90 2.97 3.79 2.88 (2.5)% 3.69 2.69 3.58 3.49 2.49 2.30 Domestic International Total Domestic Internatio
Slide 18: Aeroflot Group Network Adjustments
Aeroflot Group Network Adjustments Beginning of 2020 route network Stockholm Helsinki Oslo Murmansk Tallinn Arkhangelsk Salekhard New Urengoy Riga Saint Petersburg Syktyvkar Khanty Mansiysk Yakutsk Surgut Nizhnevartovsk Copenhagen MOSCOW Nizhnekamsk Ekaterinburg Perm Magadan Hamburg Kaunas Minsk MOS
Slide 19: Passenger and Cargo Operating Numbers
Passenger and Cargo Operating Numbers Total Domestic Cargo Jan Feb Mar Apr May Jun Jul Jan Feb Mar Apr May Jun Jul Wide-body 2% 4% (20)% 6% 6% 5% (5)% (76)%(78)% (50)% aircraft (90)%(90)% (78)% (58)% 15.0 13.8 deployed for cargo transportation ASK 12.1 7.6 6.0 6.0 7.4 3.9 5.5 3.7 1.6 1.6 1.5 1.5 Car
Slide 20: Fleet Overview
1. Market Update and Operating Results 2. Strategy 2028 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 20
Slide 21: Fleet Update
Fleet Update Actual and expected additions 2020 Fleet Plans Type of 6M 2020 Fleet as at aircraft Delivery Phase out 30.06.2020 In 6M 2020 Aeroflot Group Wide-body (long-haul) 1 (3) 57 operated 360 aircraft vs 365 A-330 - (3) 18 aircraft in 6M 2019 A-350 1 - 1 B-777 - - 29 B-747 - - 9 Narrow-body (me
Slide 22: Financial Performance
1. Market Update and Operating Results 2. Strategy 2028 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 22
Slide 23: Financial Highlights: Q2 and 6M 2020
Financial Highlights: Q2 and 6M 2020 Q2 2019 Q2 2020 Change Million RUB (where applicable) 6M 2019 6M 2020 Change 15,431 1,731 (88.8)% Passenger Traffic (mln PAX) 28,195 12,927 (54.2)% 173,399 25,458 (85.3)% Revenue 311,440 149,352 (52.0)% 152,456 12,983 (91.5)% PAX Traffic Revenue 271,711 119,591 (
Slide 24: Revenue Dynamics Decomposition
Revenue Dynamics Decomposition Revenue by Key Factors Revenue by Business Segments Million RUB Million RUB 311,440 (140,705) 311,440 (140,218) (1,903) (2,848) (16,632) (11,902) 149,352 3,550 (13,518) 149,352 6M 2019 Volume Currency Pricing Other 6M 2020 6M 2019 Scheduled Charter Cargo Other 6M 2020
Slide 25: Operating Costs
Operating Costs Operating Expenses Breakdown Change Change Operating Expense Change Change % of OpEx Q2 2019 Q2 2020 6M 2019 6M 2020 y-o-y ex. FX (RUB mln if not stated otherwise) y-o-y ex. FX (6M 2020) 49,008 5,325 (89.1)% (89.8)% Fuel 92,708 43,929 (52.6)% (53.0)% 22.5% 103,874 53,096 (48.9)% (50.
Slide 26: Group Unit Costs
Group Unit Costs Unit Costs Dynamics Capacity: ASK adjustment Billion ASK Operating Expense per ASK (CASK), RUB 6M 2019 6M 2020 Change (47.8)% Fuel 1.01 0.92 (9.2)% CASK (ex. Fuel): 2.22 3.16 42.3% 91.9 Aircraft and Passenger Servicing 0.67 0.69 3.2% D&A and Customs Duties 0.58 1.19 104.3% Staff 0.4
Slide 27: Fuel Cost Management
Fuel Cost Management Aeroflot Airline Jet Fuel Price Fuel Efficiency Thousand RUB per tonne of jet fuel (gramme / ASK) 50 3.6% 45 44.2 22.3 23.1 40 38.4 6M 2019 6M 2020 35 33.5 Average fuel price per tonne 30 31.1 Aeroflot Airline: • 6M 2020: 38.4 thousand RUB 25 (-13.1% y-o-y). • June 2020: 23.4 th
Slide 28: Pobeda Financial Results
Pobeda Financial Results PAX Traffic and Other Operating Metrics Pobeda Statement of Profit and Loss (IFRS, standalone) Million PAX, 6M 2020 dynamics y-o-y 4.6 Q2 2019 Q2 2020 Change Million RUB 6M 2019 6M 2020 Change 2.9 PAX -36% 13,108 1,527 (88.4)% Revenue 21,459 12,641 (41.1)% ASK -35% 6M 2019 6
Slide 29: Leverage and Liquidity
Leverage and Liquidity Debt Profile1 Net Debt / EBITDA Million RUB 31-Dec-2019 30-Jun-2020 Change 5.8 Borrowings 15,792 64,390 4.1x 4.4 Lease Liabilities 557,124 633,069 13.6% 3.2 Pension Liabilities 784 809 3.2% Total Debt 573,700 698,268 21.7% Cash and Short-Term 25,861 48,659 88.2% Investments Ne
Slide 30: Aeroflot's Steps to Navigate COVID-19 Crisis
Aeroflot’s Steps to Navigate COVID-19 Crisis Work stream Comments Results Optimize key fixed cost lines and CAPEX Suspension of non-key spending Negotiations with partners and suppliers Special terms with lessors + ongoing negotiations Restructuring deliveries of the fleet Aircraft deliveries moved
Slide 31: Appendix
1. Market Update and Operating Results 2. Strategy 2028 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 31
Slide 32: Operating Data – Q2 & 6M 2020
Operating Data – Q2 & 6M 2020 Indicators Aeroflot Airline Aeroflot Group Q2 Q2 6M 6M Q2 Q2 6M 6M Unit Y-o-Y Y-o-Y Y-o-Y Y-o-Y 2019 2020 2019 2020 2019 2020 2019 2020 Passenger Traffic th PAX 9,343 877 (90.6%) 17,796 7,807 (56.1%) 15,431 1,731 (88.8%) 28,195 12,927 (54.2%) International Routes th PAX
Slide 33: Operating Data of Subsidiary Airlines – Q2 & 6M 2020
Operating Data of Subsidiary Airlines – Q2 & 6M 2020 Indicators Rossiya Pobeda Aurora Q2 6M Q2 6M Q2 6M Y-o-Y Y-o-Y Y-o-Y Y-o-Y Y-o-Y Y-o-Y 2020 2020 2020 2020 2020 2020 Passenger Traffic th PAX 335 (89.4%) 1,827 (64.1%) 441 (82.5%) 2,934 (35.8%) 78 (81.0%) 359 (51.6%) International Routes th PAX 9
Slide 34: Aeroflot Domestic and International Transit
Aeroflot Domestic and International Transit Growing Connectivity of Aeroflot Airline’s Flights1 ... … Results into a Flexible Approach to Transit Flows 21.2x 22.0x 23.6x 23.8x n/a 0.9 mln 12.0% 25.5 25.3 25.0 4.9 mln 24.2 18.2 17.9 62.7% 18.0 17.0 17.1 0.9 mln 13.4 11.9% 13.9 14.1 13.9 13.1 9.9 1.0
Slide 35: 6M 2020 Operating Data by Region (Scheduled Routes)
6M 2020 Operating Data by Region (Scheduled Routes) Americas Russia CIS (10.1) p.p. (10.7) (14.7) p.p. p.p. (55.2)% (34.0)% (60.8)% (60.7)% (46.1)% (46.0)% (67.4)% (66.0)% (60.8)% Passengers RPK ASK PLF Passengers RPK ASK PLF carried carried Passengers RPK ASK PLF carried Europe Middle East Asia (6.
Slide 36: Aeroflot Group Fleet Breakdown
Aeroflot Group Fleet Breakdown Aeroflot Group Fleet Overview Breakdown by Aircraft Operated by Total as of Total as of Change vs. Wide-body Aircraft Type Aeroflot Subsidiaries 30-Jun-20 31-Dec-19 31-Dec-19 16% Wide-body 38 19 57 59 (2) Airbus A330 18 - 18 21 (3) Narrow- body Airbus A350 1 - 1 - 1 (r
Slide 37: Aeroflot Group Fleet Evolution
Aeroflot Group Fleet Evolution Aeroflot Group Fleet in Operation Average Age of the Fleet 1 Aircraft Average Age Malta Air 3.6 7.2 Frontier Airlines 3.9 6.9 6.4 6.5 6.2 6.2 5.2 366 359 360 IndiGo 5.5 325 289 Wizz Air 5.6 247 Hainan Airlines 5.8 Vietnam Airlines 6.1 Spirit Airlines 6.1 Qatar Airways
Slide 38: Traffic Revenue Analysis – Q2 and 6M 2020
Traffic Revenue Analysis – Q2 and 6M 2020 Traffic Revenue Breakdown by Type Revenue from Scheduled Passengers (RUB mln)1 Scheduled 6M 2020 Passenger Flights 6M 6M 86.8% Q2 2019 Q2 2020 Y-o-Y Region Y-o-Y % of sch. 2019 2020 revenue 59,289 10,861 (81.7)% Russia 102,422 53,956 (47.3)% 47.1% 38,763 461
Slide 39: Aeroflot Group Blended Flights Revenue Units
Aeroflot Group Blended Flights Revenue Units RUB RUB 6M Yield (Scheduled + Charter 0.7% PAX Revenue / RPK) 6M RASK (Scheduled + Charter 1.1% PAX Revenue / RPK) 3.2% RUB / RPK RUB / ASK (10.6)% (0.5)% (15.6)% (20.2)% (1.9)% 2.99 2.96 3.82 3.80 2.91 (2.4)% 3.73 3.66 3.59 3.50 2.67 2.49 2.32 Domestic I
Slide 40: EBITDA Evolution
EBITDA Evolution Total effect on revenue Total effect on costs ∑=(162,088) RUB mln ∑=104,884 RUB mln (140,705) 68,296 8,896 3,838 11,092 4,919 943 28,717 10,320 49,104 (2,848) (16,632) (1,903) (1,853) Net volume and price effect Net FX effect Net volume and price effect ∑=(160,185) RUB mln ∑=(3,756)
Slide 41: Operating and Free Cash Flows
Operating and Free Cash Flows 79,022 10,659 (9,805) 4,493 (1,286) 1,151 4,243 15 22,435 19,044 13,612 8,385 56,897 (75,190) Loss Before D&A Interest Other Adj. Cash Flows Working Net Cash Purchase of Proceeds Deposit Net Pre- Net Free Cash Free Cash Income Tax Expense Before From Capital Flows From
Slide 42: Headcount Overview
Headcount Overview Aeroflot Group Headcount Headcount by Category Other non-airline Flight crew 31-Dec-2019 30-Jun-2020 % personnel 11.6% 15.9% Flight crew 4,596 4,633 0.8 % Cabin crew 12,822 12,579 (1.9)% Cabin crew Other airline personnel (incl. airlines’ head office) 16,885 16,395 (2.9)% 31.5% Ot
Slide 43: Board of Directors
Board of Directors Corporate Governance Board of Directors Personnel and Audit Strategy Name Remuneration General Meeting of Audit Committee Committee Committee Committee Shareholders (3 members) Evgeny Ditrich Chairman Vitaly Saveliev Personnel and Remuneration Maksut Shadayev Board of Directors Co
Slide 44: Aeroflot Group Structure
Aeroflot Group Structure PJSC Aeroflot Airlines Ancillary Companies JSC Rossiya Airlines 75%-1 sh. JSC Aeromar 51% On-board sales/catering LLC Pobeda Airlines 100% LLC Aeroflot-Finance 100% Financial services JSC Aurora Airlines 51% JSC Sherotel 100% Hotel services Aeroflot Aviation School 100% Educ
Slide 45: Investor Relations Contacts
Investor Relations Contacts Address: 119019, Russia, Moscow, Arbat St. 1 E-mail: ir@aeroflot.ru Website: www.aeroflot.ru