Qantas Airways Limited · ASX:QAN
Qantas Airways — FY2021 Earnings Presentation
31 slides from Qantas Airways's earnings presentation, Aug 26, 2021
Slide 1: FY21 Results Supplementary Presentation
Qantas Airways Limited FY21 Results Supplementary Presentation 26 August 2021 ASX: QAN US OTC: QABSY
Slide 2: Group Performance
QANTAS Group Performance
Slide 3: FY21 key Group financial metrics
FY21 key Group financial metrics Pre-COVID FY21 FY20 Comments FY19 Underlying EBITDA profit could not offset the impact of depreciation Underlying (Loss)/Profit Before Tax1 ($M) (1,826) 124 1,326 and amortisation Underlying Earnings per Share2 (c) (71.3) 5.9 57.3 Statutory (Loss)/Profit Before Tax (
Slide 4: Underlying Income Statement summary
Underlying Income Statement summary Pre-COVID $M FY21 FY20 Comments FY19 Net passenger revenue 3,766 12,183 15,696 Reduction largely in line with decline in passengers carried Net freight revenue 1,316 1,045 971 Driven by e-commerce trends and restricted belly space availability Includes the impact
Slide 5: Reconciliation to Underlying (Loss)/Profit Before Tax
Reconciliation to Underlying (Loss)/Profit Before Tax $M FY21 Pre-COVID FY19 Statutory Items not incl’d in Underlying1 Statutory Items not incl’d in Underlying1 Underlying Underlying Net passenger revenue 3,766 - 3,766 15,696 – 15,696 Net freight revenue 1,316 - 1,316 971 – 971 Other revenue 852 - 8
Slide 6: Revenue detail – compared to Pre-COVID/FY19
Revenue detail – compared to Pre-COVID/FY19 Net passenger revenue down 76% • Group capacity declined by 81% due to COVID related border restrictions and community lockdowns Revenue ($B) • Group Unit Revenue increased 9.8% due to lower mix of international flying -67% – Group Domestic1 Unit Revenue d
Slide 7: Expenditure detail – compared to Pre-COVID/FY19
Expenditure detail – compared to Pre-COVID/FY19 Fuel down 78% • Reduced consumption due to COVID related travel restrictions Expenditure 1 ($B) • Lower AUD jet fuel prices -54% 16.4 Manpower and staff-related down 53% • Decreased due to rightsizing, restructuring as part of the recovery program and
Slide 8: Statutory Cash flow
Statutory Cash flow $M FY21 FY20 • Significant drop in operating cash flow driven by the impact of travel restrictions and border closures due to COVID-19 and one- Operating cash flows (386) 1,083 off cash outflows for restructuring, redundancies, refunds and deferred payables Investing cash flows (
Slide 9: Invested Capital calculation
Invested Capital calculation As at 30 June As at 30 June As at 30 June $M 2021 20204 2019 Receivables (current and non-current) 633 621 1,178 Inventories 279 306 364 Other assets (current and non-current) 856 562 680 Investments accounted for under the equity method 57 59 217 Property, plant and equ
Slide 10: ROIC calculation
ROIC calculation $M FY21 FY20 Underlying EBIT (1,525) 395 Add back: Lease depreciation under AASB 16 373 402 Less: Notional depreciation1 (105) (108) Less: Cash expenses for non-aircraft leases (199) (225) ROIC EBIT (1,456) 464 $M FY21 FY20 Net working capital2 (7,345) (8,191) Fixed assets3 11,694 1
Slide 11: Net Debt target range
Net Debt target range • During the recovery phase we will conservatively hold the target Net Debt range consistent with the position as at 30 June 2020 • Net Debt target range = 2.0x – 2.5x ROIC EBITDA where EBITDA achieves a fixed 10% ROIC • At Invested Capital of $6.0b as at 30 June 2020, optimal
Slide 12: Net Debt movement consistent with Financial Framework
Net Debt movement consistent with Financial Framework $M FY21 FY20 • The Financial Framework considers aircraft leases as part of Net Debt Opening Net Debt (4,734) (4,710) — Aircraft leases are initially recognised in Net Debt at fair Net cash from operating activities (386) 1,083 value Less: Net le
Slide 13: Unit Cost breakdown
Unit Cost breakdown c/ASK FY21 Total Unit Cost 1 15.94 Excluding: Fuel (2.84) Change in FX rates - Impact of changes in the discount rate and other actuarial assumptions 0.01 Share of net profit/(loss) of investments accounted for under the equity method (0.44) Ex-Fuel Unit Cost 2 12.67 Excluding: D
Slide 14: FY21 Australian Government COVID-19 packages
FY21 Australian Government COVID-19 packages COVID-19 and government border restrictions reduced the Group’s FY21 revenue by ~$12.0b1. Australian Government COVID-19 packages totalled $1.1b for FY21. Employee support measures Description 1H21 2H21 FY21 JobKeeper Economic wide support to employees $4
Slide 15: FY21 Australian Government COVID-19 packages continued
FY21 Australian Government COVID-19 packages continued JobKeeper Payment was intended to help keep more Australians in jobs and support businesses affected by the significant economic impact of COVID-19. On 21 July 2020, the government announced the extension of the JobKeeper payment to 28 March 202
Slide 16: Fleet as at 30 June 2021
Fleet as at 30 June 2021 Aircraft Type FY21 FY20 Change • Group fleet6 of 311 aircraft as at 30 June 2021 A380-8001 12 12 - A330-200 18 18 - • Movements in FY21 include: A330-300 10 10 - — Disposal of four 747-400ER completing the retirement of 737-800 75 75 - the 747 fleet 787-9 11 11 - 747-400ER2
Slide 17: Investment consistent with Financial Framework will support a sustainable fleet replacement program
Investment consistent with Financial Framework will support a sustainable fleet replacement program Qantas Group nominal retirement age ~ 20 years COVID impact Aircraft life Design Service Goal ~20 years Engine life (cycle driven) ~ 10 years Engine life (cycle driven) ~ 10 years up to 40 years Capit
Slide 18: Supplementary Segment Information
Supplementary Segment Information
Slide 19: 2H21 Group and Group Domestic Traffic Statistics vs Pre-COVID
2H21 Group and Group Domestic Traffic Statistics vs Pre-COVID 3Q21 Pre-COVID Change (%) 4Q21 Pre-COVID Change (%) 2H21 Pre-COVID Change (%) 3Q19 4Q19 2H19 Qantas Group Operations Passengers carried (‘000) 4,440 13,670 (68) 6,511 13,643 (52) 10,951 27,313 (60) Revenue Passenger Kilometres (m) 5,033 3
Slide 20: 2H21 Group International Traffic Statistics vs Pre-COVID
2H21 Group International Traffic Statistics vs Pre-COVID 3Q21 Pre-COVID Change (%) 4Q21 Pre-COVID Change (%) 2H21 Pre-COVID Change (%) 3Q19 4Q19 2H19 Qantas International Passengers carried (‘000) 9 2,224 (100) 109 2,170 (95) 118 4,394 (97) Revenue Passenger Kilometres (m) 16 15,008 (100) 250 14,756
Slide 21: 2H21 Group and Group Domestic Traffic Statistics vs 2H20
2H21 Group and Group Domestic Traffic Statistics vs 2H20 3Q21 3Q20 Change (%) 4Q21 4Q20 Change (%) 2H21 2H20 Change (%) Qantas Group Operations Passengers carried (‘000) 4,440 11,353 (61) 6,511 246 >100 10,951 11,599 (6) Revenue Passenger Kilometres (m) 5,033 26,350 (81) 7,956 240 >100 12,989 26,590
Slide 22: 2H21 Group International Traffic Statistics vs 2H20
2H21 Group International Traffic Statistics vs 2H20 3Q21 3Q20 Change (%) 4Q21 4Q20 Change (%) 2H21 2H20 Change (%) Qantas International Passengers carried (‘000) 9 1,840 (100) 109 1 >100 118 1,841 (94) Revenue Passenger Kilometres (m) 16 12,522 (100) 250 0 N/A 266 12,522 (98) Available Seat Kilometr
Slide 23: Qantas Domestic
Qantas Domestic1 FY 1H 2H FY21 FY19 1H21 1H19 2H21 2H19 Variance% Variance% Variance% Revenue $M 2,745 6,098 (55) 1,003 3,230 (69) 1,742 2,868 (39) Underlying EBITDA $M 159 1,503 (89) 28 857 (97) 131 646 (80) Underlying EBIT $M (590) 778 (>100) (337) 478 (>100) (253) 300 (>100) Operating Margin % <0
Slide 24: Qantas International and Freight
Qantas International and Freight1 FY 1H 2H FY21 FY19 1H21 1H19 2H21 2H19 Variance% Variance% Variance% Revenue $M 1,598 7,420 (78) 722 3,693 (80) 876 3,727 (76) Underlying EBITDA $M 117 1,045 (89) 55 477 (88) 62 568 (89) Underlying EBIT $M (575) 323 (>100) (291) 119 (>100) (284) 204 (>100) Operating
Slide 25: Jetstar Group
Jetstar Group1 FY 1H 2H FY21 FY19 1H21 1H19 2H21 2H19 Variance% Variance% Variance% Revenue $M 1,140 3,961 (71) 384 2,048 (81) 756 1,913 (60) Underlying EBITDA $M (129) 836 (>100) (98) 471 (>100) (31) 365 (>100) Underlying EBIT $M (550) 400 (>100) (328) 253 (>100) (222) 147 (>100) Operating Margin %
Slide 26: Jetstar Group as at 30 June 2021
Jetstar Group as at 30 June 2021 Jetstar Branded Airlines Ownership1 Launch Aircraft2 49 x A320/A321 ❶ Jetstar Australia 100% 2004 1 x 787-8 ❷ Jetstar International 100% 2006 10 x 787-8 ❸ Jetstar New Zealand3 100% 2009 5 x A320 ❹ Jetstar Asia (Singapore) 49% 2004 13 x A320 ❺ Jetstar Japan 33% 2012 2
Slide 27: Qantas Loyalty
Qantas Loyalty1 FY 1H 2H FY21 FY19 1H21 1H19 2H21 2H19 Variance% Variance% Variance% Revenue $M 984 1,654 (41) 438 809 (46) 546 845 (35) Underlying EBIT $M 272 376 (28) 125 175 (29) 147 201 (27) Operating Margin % 27.6 22.7 4.9pts 28.5 21.6 6.9pts 26.9 23.8 3.1pts QFF Members M 13.6 12.9 5 13.5 12.6
Slide 28: Diversification and growth at Qantas Loyalty
Diversification and growth at Qantas Loyalty One of the world’s most diverse airline loyalty programs • 1% growth1 in Qantas Frequent Flyer membership; 7% growth1 in QBR2 membership with >330,000 SME members3 • >600 program partners4 across Qantas Frequent Flyer and Qantas Business Rewards • bp Aust
Slide 29: Accounting for points – a lifecycle overview
Accounting for points – a lifecycle overview Qantas Loyalty generates a gross margin on both Gross margin is only generated on ‘external points’ Issuance and Redemption activity (unique compared to other airline loyalty programs) (Not to scale and for illustrative purposes only) Pre-COVID activity a
Slide 30: Glossary
Glossary AAFRP – Australian Airline Financial Relief Package Net free cash flow – Net cash from operating activities less net cash used in investing activities (excluding aircraft lease refinancing) Available Seat Kilometres (ASK) – Total number of seats available for passengers, multiplied by the n
Slide 31: Disclaimer and ASIC Guidance
Disclaimer and ASIC Guidance This Presentation has been prepared by Qantas Airways Limited (ABN 16 009 661 901) (Qantas). Summary information This Presentation contains summary information about Qantas and its subsidiaries (Qantas Group) and their activities current as at 26 August 2021, unless othe