Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — FY2013 Earnings Presentation
48 slides from Japan Airlines's earnings presentation, Apr 30, 2014
Slide 1: Mar/2014 (FY2013) Results
Mar/2014 (FY2013) Results 30 April, 2014 Yoshiharu Ueki, President Norikazu Saito, Senior Managing Executive Officer
Slide 2: Overview of Full-Year Mar/2014 (FY2013) Results
Overview of Full-Year Mar/2014 (FY2013) Results Operating Revenue Operating Profit （JPY Bn) （JPY Bn) Operating Profit Margin 1,309.3 200 195.2 20% 1,300 1,238.8 ＋5.7% 166.7 16% 150 15.8% 12% 12.7% 1,000 100 8% Mar/2013 Full-Year Mar/2014 Full-year Mar/2013 Full-year Mar/2014 Full-year Though we re
Slide 3: Full-year operating revenue and profit commentary
During the reporting period, operating revenue was 1, 309.3 billion yen, and operating profit was 166.7 billion yen. Although operating profit margin declined by 3.0% year-on-year, it came to 12.7%, and we were able to maintain an operating profit margin of over 10%, one of the management target in
Slide 4: Upward Revision of Operating Profit Mar/2014
Upward Revision of Operating Profit Mar/2014 (JPY：Bn) 166.7 158.0 155.0 140.0 FY13 Initial FY13 Q2 FY13 Q3 Result Forecast Forecast Forecast We initially forecast an operating profit of 140 billion yen, but by steadily accumulating profit, we achieved an operating profit of 166.7 billion yen for t
Slide 5: Initial forecast and upward revision commentary
We initially forecast an operating profit of 140 billion yen for the full fiscal year. As operating revenue moved steadily mainly in international passengers, coupled by steady cost reduction efforts by staff, we were able to report an operating profit of 166.7 billion yen for the full fiscal year,
Slide 6: Forecast Overview of Full-Year Mar/2015 (FY2014)
Forecast Overview of Full-Year Mar/2015 (FY2014) Operating Revenue Operating Profit （JPY Bn) （JPY Bn) Operating Profit Margin 20% 1,400 1,350.0 200 1,309.3 ＋3.1% 166.7 16% 1,200 150 140.0 12% 12.7% 10.4% 1,000 100 8% Mar/2014 Full-Year Mar/2015 Full-Year Mar/2014 Full-Year Mar/2015 Full-Year In fi
Slide 7: FY2014 forecast and business environment commentary
The business environment is expected to see a significant increase in capacity due to additional flight slots at Tokyo metropolitan airports and an expansion of supply of LCCs. Therefore, we expect the balance in demand and supply of both international and domestic passenger operations to ease, res
Slide 8: Dividend for Mar/2014
Dividend for Mar/2014 DPS for Mar/2014 based on our financial results 160.00JPY 147.00JPY Increase 2014/1/31 Announced forecast Mar/2014 (JPY Bn) Mar/2013 Result New Announced on Dividend Calculation Announcement 2014/1/31 Policy(1) Consolidated Net Income 171.6 JPY Bn 166.2 JPY Bn 148.0 JPY Bn Ap
Slide 9: Shareholder returns and dividend policy commentary
Returning value to our shareholders is one of our greatest goals of management, and we aim to achieve stable earnings and pay dividends. As for the dividends, as I mentioned in our announcement of financial results for the first three quarters of the fiscal year, our dividend policy is to apply ap
Slide 10: Positioning of Each Fiscal Year
Positioning of Each Fiscal Year Steadily Achieve Our Management Targets to Realize Growth from FY2015 Review Future Plan FY2012-2013 FY2014 FY2015-2016 A period that our ability to execute the high-profitability A period of establishing a firm was tested A period to achieve Management business found
Slide 11: Medium Term Management Plan fiscal year positioning commentary
Regrettably, we reported lower earnings on higher revenues in fiscal year 2013. Fiscal year 2014 is defined in the Medium Term Management Plan as being a period to improve business operations so that we may achieve higher earnings on higher revenue. Fiscal years 2015 and 2016 are defined as a peri
Slide 12: Mar/2014 (FY2013) Results Details
Mar/2014 (FY2013) Results Norikazu Saito, Senior Managing Executive Officer Details
Slide 13: Overview of Consolidated Financial Results
Overview of Consolidated Financial Results Consolidated Financial Results 4Q (JPY Bn) Mar/2013 Mar/2014 y/y (Jan-Mar) y/y Operating revenue Mar/2014(1) reached 1,309.3 billion Revenue 1,238.8 1,309.3 +5.7% 319.4 +7.6% yen,+5.7% year-on-year. Air Transportation Segment 1,113.7 1,166.6 +4.8% 283.0 +
Slide 14: Consolidated results commentary
Operating revenue for the reporting period was 1, 309.3 billion yen, an increase of 5.7% compared to the previous fiscal year, mainly due to an increase in passenger traffic on both international and domestic flights. We incurred operating expenses of 1,142.5 billion yen, an increase of 9.5% yea
Slide 15: Changes in Operating Profit
Changes in Operating Profit Mar/2014(FY2013) ASK y/y： +2.6% RPK y/y： +3.7% ▲28.4 Bn （JPY：Bn） (▲14.6%) Other Revenue Fuel Operation Revenue Int’l Domestic Coupled Passenger Cargo & Mail +30.3 ▲37.0 Coupled Passenger Cost Cost +7.0 +30.9 +2.1 ▲6.2 ▲5.1 Other Cost ▲50.5 195.2 +11.6% ▲15.0% +0.5% +8.3%
Slide 16: Operating profit change commentary
As we attracted more demand than the increase in supply compared to the previous fiscal year, international and domestic passenger revenues increased by 30.9 billion yen and 2.1 billion yen respectively. Combined with other revenues, total revenues increased by 70.5 billion yen. As for expenses,
Slide 17: Impact From Currency Market
Impact From Currency Market Breakdown of the Impact on Our Operating Profit （JPY：Bn） Forex Impact Increased Other Profit ▲45.0 Bn +16.5 Bn Expenses Revenue （Excl. Fuel） +22.5 ▲19.3 Other Other Fuel Revenue Expenses 195.2 ▲48.2 +48.0 ▲31.5 166.7 150.2 Mar/2013 Full-Year Mar/2014 Full-Year （82.4JPY/US
Slide 18: Currency impact commentary
Revenue denominated in foreign currencies increased by 22.5 billion yen due to the weak yen. However, as fuel costs totaled 48.2 billion yen and costs excluding fuel costs totaled 19.3 billion yen, profit decreased by 45 billion yen due to the impact of exchange rates. When calculating operating
Slide 19: International Passenger Operations (Operating Results)
International Passenger Operations (Operating Results) Mar/2014(FY2013) Mar/2013 Mar/2014 % y/y 4Q(Jan-Mar) % y/y Passenger revenue was 437.5 Mar/2014(1) billion yen, +7.6% year-on-year. Passenger Revenue (JPY Bn) 406.6 437.5 +7.6% 106.2 +8.1% The load factor was 76.5% ASK (MN seat km) 44,745 46
Slide 20: International passenger revenue commentary
International passenger revenue came to 437.5 billion yen, an increase of 7.6% from the previous fiscal year. For ASK grew by 3.3% and RPK grew 4.0%, our load factors increased by 0.5 points year-on-year to 76.5%. As a result, our yield increased by 3.5% year-on-year, and contributed to the reve
Slide 21: International Passenger Operations (Operating Results)
International Passenger Operations (Operating Results) Mar/2014(FY2013) Robust demand on European and South East Asia routes （JPY：Bn） Load Factor +30.9 Bn EUR routes 78.3%(+1.4% vspy) (+7.6%) SE Asia routes 76.1%(+1.7% vspy) 437.5 Increase of inbound passengers 9.0 from overseas Increase of reve
Slide 22: International demand and JAL SKY SUITE commentary
In our international passenger operations, demand was robust especially on European and Southeast Asia flights. The load factor of European and Southeast Asia flights was 78.3% and 76.1% respectively. The factors for thriving demand on international flights were the increase in overseas passengers
Slide 23: Domestic Passenger Operations (Operating Results)
Domestic Passenger Operations (Operating Results) Mar/2014(FY2013) 4Q (Jan-Mar) Passenger revenue was Mar/2013 Mar/2014 % y/y % y/y Mar/2014(1) 487.4 billion yen, +0.5% Passenger year-on-year. Revenue 485.2 487.4 +0.5% 112.4 +0.7% (JPY Bn) Unit price was ▲3.4% year- ASK (MN seat km) 36,443 37,08
Slide 24: Domestic passenger revenue commentary
On domestic routes, while ASK increased by 1.8%, RPK increased by 3.2% and this rose our load factor by 0.9 points to 64.0%. Though our yield declined by 2.6%, domestic passenger revenue came to 487.4 billion yen, an increase of 0.5% from the previous fiscal year.
Slide 25: Domestic Passenger Operations (Operating Results)
Domestic Passenger Operations (Operating Results) Mar/2014(FY2013) （JPY：Bn） Robust demand of group passengers +2.1 Bn to boost demand (+0.5%) -Inbound passengers from regional areas in Japan to Tokyo metropolitan area due 485.2 487.4 to Tokyo Disney Resort® 30th Anniversary -The Sengu Ceremony of
Slide 26: Domestic demand and promotional fares commentary
In our domestic passenger operations, we increased promotional fares to boost demand and we also saw an increase in group passengers, especially those to the Tokyo metropolitan area from regional Japan to enjoy the 30th anniversary of Tokyo Disney Resort, and strong demand to the San-in district p
Slide 27: Major Operating Expense Items
Major Operating Expense Items Breakdown of Operating Expenses 4Q (Jan-Mar) （JPY Bn） Mar/2013 Mar/2014 % y/y % y/y Mar/2014(1) Fuel 246.3 283.3 +15.0% 71.0 +16.9% Landing fees and other rent 75.1 80.2 +6.7% 19.3 +4.5% Maintenance 30.4 41.1 +35.2% 9.4 +38.7% Sales Commissions (Air Transport) 20.3 22.5
Slide 28: Operating expense commentary
Of operating expense items, the weak yen pushed fuel costs upward by 15.0% year-on-year to 283.3 billion yen. And as I explained on the previous page, effects of exchange rates pushed expenses excluding fuel costs upward by 67.5 billion yen. Expenses for maintenance increased due to intensive ca
Slide 29: Major Balance Sheet Items
Major Balance Sheet Items Consolidated Balance Sheet Summary as of Mar/2014 End of FY2012 End of FY2013 (JPY Bn) difference 2013/3/31 2014/3/31 Shareholders' equity Total Assets 1,216.6 1,340.1 +123.5 ratio increased by 5.1pt Cash and Deposits 347.9 368.7 +20.7 to 51.5% Balance of Interest-bearing
Slide 30: Balance sheet commentary
The balance of interest-bearing debt decreased by 25.8 billion yen year-on- year to 134.2 billion yen through steady repayments of long-term loans and leasing obligations. Furthermore, our off-balance sheet remaining lease payments decreased by 61.6 billion yen year-on-year to145.5 billion yen.
Slide 31: Major Cash Flow Items
Major Cash Flow Items End of FY2012 End of FY2013 (JPY Bn) Difference 2013/3/31 2014/3/31 Net income before income taxes and minority interests 190.4 160.0 ▲30.4 Depreciation 81.0 82.7 +1.7 Other ▲6.6 5.1 +11.8 Cash Flow from Operating Activities 264.8 247.9 ▲16.9 Capital Expenditure (1) ▲121.8 ▲ 16
Slide 32: Cash flow commentary
Cash flow from operations totaled 247.9 billion yen. Cash flow from investing totaled 166.7 billion yen due to cash outflows for the launch of new aircraft and purchase of leased aircraft, and such. Subsequently, free cash flow for fiscal year 2013 amounted to 81.2 billion yen. Cash flow for f
Slide 33: Earnings Forecast for Mar/2015 (FY2014, Consolidated)
Earnings Forecast for Mar/2015 (FY2014,Consolidated) Mar/2014 Mar/2015 (JPY Bn) Difference Result Forecast Mar/2014 Mar/2015 Result Forecast Operating Revenue 1,309.3 1,350.0 +40.6 ASK* Int’l +3.3% +4.9% Operating Expense 1,142.5 1,210.0 +67.4 Doms +1.8% ▲2.1% Operating Profit 166.7 140.0 ▲26.7 RPK*
Slide 34: FY2014 forecast commentary
In fiscal year 2014 ending March 31, 2015, we forecast operating revenue to increase by 40.6 billion yen year-on-year to 1,350 billion yen. Operating profit and ordinary profit are forecast to decrease by 26.7 billion yen and 22.6 billion yen respectively year-on-year to 140 billion yen and 135
Slide 35: Changes in Operating Profit / Forecast Mar/2015
Changes in Operating Profit/ Forecast Mar/2015 ASK y/y： +1.8% RPK y/y ： +1.3% ▲26.7 Bn (▲16.1%) （JPY：Bn） Other Revenue Fuel Int’l Domestic +25.5 ▲32.6 Passenger Passenger Cargo & Mail Other Cost (Excl. Fuel) +13.4 ▲0.4 +2.0 166.7 ▲34.8 ▲0.1% +2.3% +8.9% ▲11.5% +3.1% 140.0 ▲4.1% Mar/2014 Full-Year Ma
Slide 36: Forecast revenue and expense change commentary
With respect to revenues, international passenger revenue is expected to increase by 13.4 billion yen due to an increase in business and leisure travelers spurred by a robust Japanese economy, additional flights on the Narita and New York route, Narita and Jakarta route, and Haneda and Ho Chi Minh
Slide 37: Impact From Currency Market Forecast Mar/2015
Impact From Currency Market Forecast Mar/2015 have impact of ▲17.5 billion yen on profitability FOREX to為替影響により▲185億円の収支影響を見込む Mar/2014 2013年度 Mar/2015 2014年度 Result 実績 Forecast 計画 為替（円/USD） FX（JPY/USD） 99.9 107 （JPY：Bn） ▲26.7 Bn Other Other Revenue Expenses Revenue Fuel +31.8 ▲41.0 Expenses 166.7 2
Slide 38: Forecast currency impact commentary
While revenues are expected to increase by 9 billion yen, the impact of exchange rates is expected to push fuel costs and expenses excluding fuel upward by 18.5 billion yen and 8 billion yen respectively. Excluding the impact of exchange rates, while revenues are expected to increase by 31.8 bil
Slide 39: Mar/2015 Earnings Forecast (Consolidated Balance Sheet / Cash Flow)
Mar/2015 Earnings Forecast (Consolidated Balance Sheet / Cash Flow) Consolidated Balance Sheet Mar/2014 Mar/2015 （JPY:Bn） Difference Result Forecast Total Assets 1,340.1 1,402.0 +61.8 Interest-bearing Debt 134.2 101.0 ▲33.2 Shareholders' Equity 690.2 744.0 +53.7 Shareholders' Equity Ratio (%) 51.5%
Slide 40: Forecast equity ratio and cash flow commentary
We forecast shareholder’s equity of 744 billion yen, resulting in an equity ratio of 53.1%, and subsequently, we expect to achieve our 50% equity ratio target as set out in the Medium Term Management Plan. In consolidated cash flows, we forecast cash flows for operations and investing of 226 billi
Slide 41: Supplemental References
SUPPLEMENTAL REFERENCES
Slide 42: Revenue of International Routes by Geographic Segment
《Supplemental Reference》 Revenue of International Routes by Geographic segment Passenger Revenue (% of the whole int’l revenue) Passengers (%) FY2012 FY2013 y/y 4Q FY2013 y/y (‘000) FY2012 FY2013 y/y 4Q FY2013 y/y Trans Pacific 34.0% 34.0% +0.0pt 33.5% +0.5pt Trans Pacific 1,692 1,775 +4.9% 453 +7.8
Slide 43: Number of Aircraft in Service Mar/2014
《Supplemental Reference》 Number of Aircraft in Service Mar/2014 End of Mar/2013 End of Mar/2014 Difference Owned Leased Total Owned Leased Total Boeing 777-200 15 0 15 15 0 15 -- Boeing 777-200ER 11 0 11 11 0 11 -- Boeing 777-300 7 0 7 7 0 7 -- Boeing 777-300ER 13 0 13 13 0 13 -- Large-sized Total 4
Slide 44: Impact from Fuel and Currency Markets Mar/2015
《Supplemental Reference》 Impact from Fuel and Currency Markets Mar/2015 Sensitivity for Fuel Costs 1 Hedging Ratio for Fuel Costs (As of End of Mar/2014) (Without Hedging) 100% Effect on Fuels (year) Approx 80% 80% Crude Oil 2.3 Bn JPY (Change in 1 Per Year #REF! Fuel #REF! FX USD/bbl） 60% FX Approx
Slide 45: FY14 Earnings Forecast: International Passenger Operations
《Supplemental Reference》 FY14 Earnings Forecast（ Air transportation Segment ） International Passenger Operations y/y （%） End of Mar/2014 End of Mar/2015 Result Forecast 1H 2H (Forecast) (Forecast) Passenger Revenue (JPY Bn) 437.5 +3.1% +3.4% +2.8% ASK (MN seat km) 46,235 +4.9% +4.8% +4.9% RPK (MN pa
Slide 46: FY14 Earnings Forecast: Domestic Passenger Operations
《Supplemental Reference》 FY14 Earnings Forecast（ Air transportation Segment ） Domestic Passenger Operations y/y （%） End of Mar/2014 End of Mar/2015 Result Forecast 1H 2H (Forecast) (Forecast) Passenger Revenue (JPY Bn) 487.4 ▲0.0% ▲1.4% +1.4% ASK (MN seat km) 37,084 ▲2.1% ▲3.9% ▲0.1% RPK (MN passeng
Slide 47: Contact: Finance, Japan Airlines
Contact: Finance, Japan Airlines +81-3-5460-3068
Slide 48: Disclaimer
Disclaimer This contents 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 cre