Air France-klm Sa · EURONEXT:AF
Air France-klm Sa — Q2 2024 Earnings Presentation
29 slides from Air France-klm Sa's earnings presentation, 2024
Slide 1: Results Q2 2024
2 CSULIS OQ? 2024 AIRFRANCE KLM GROUP
Slide 2: Q2 2024 Highlights
Q2 2024 HIGHLIGHTS Benjamin Smith – Chief Executive Officer Air France-KLM 2
Slide 3: Q2 Results Highlights
Passengers carried Group revenues Q2 RESULTS HIGHLIGHTS +4% +4% €7.6bn €7.9bn 24.7m 25.7m • Capacity up 4% and stable load factor and yield compared to Q2 2023 • Group revenue up 4% compared to last year • Operating result stood at €513m marked by a marked by stable yet sluggish performance for KLM
Slide 4: Revenue increase driven by premium traffic
REVENUE INCREASE IS PREDOMINANTLY DRIVEN BY PREMIUM TRAFFIC, WHICH INCLUDES A SIGNIFICANT SHARE OF PREMIUM LEISURE Air France-KLM Passenger Network Revenue1 H1 2024 vs. H1 2023 +7.4% Premium revenue2 • Driven by sales in the Direct Online channel +3.8% • Strong and resilient share of Premium Leisure
Slide 5: Business development tracks on course to bring strong tangible results
BUSINESS DEVELOPMENT TRACKS ON COURSE TO BRING STRONG TANGIBLE RESULTS Signing Air France / Airbus Joint Venture deal agreement for Engineering and Maintenance business, with closing expected end-2024, early-2025 New generation platform for airline-manufacturer cooperation with balanced repair activ
Slide 6: Flying Blue keeps expanding beyond airline business
FLYING BLUE KEEPS EXPANDING BEYOND AIRLINE BUSINESS, ENGAGING EVEN MORE ACTIVE MEMBERS Flying Blue steadily attracts Active Members, who engage with program by Earning & Burning Miles • More than 12M1 of Active Flying Blue members with 3.1M enrollments in H1 2024, +9% vs. LY • Earn / Spend activity
Slide 7: Q2 2024 Financial Results
Q2 2024 FINANCIAL RESULTS Steven Zaat – Chief Financial Officer Air France-KLM 7
Slide 8: Operating result hampered by higher fuel price and unit cost
OPERATING RESULT HAMPERED BY HIGHER FUEL PRICE AND UNIT COST OLYMPIC GAMES IMPACT IN JUNE: €40M Operating result evolution +1.7% vs. Q2 2023 In € m (outlook: +2%) Q2 2024 Q2 2023 Change Revenues (€ m) 7,949 7,624 +4.3% Operating expenses (€ m) 7,435 6,891 +7.9% -220 EBITDA (€ m) 1,170 1,328 -158 Q2
Slide 9: Network passenger unit revenue stable despite Olympic Games effects
NETWORK PASSENGER UNIT REVENUE STABLE DESPITE OLYMPIC GAMES EFFECTS Unit Revenue2 Revenues Operating result Operating Q2 2024 vs Q2 2023 Capacity 1 Change Change Change Constant Curr. (€ m) (€ m) margin +2.8% -0.1% 6,080 +2.8% Network 446 -247m 6.7% -3.9 pt +0.2% -4.4% 546 -10.0% Transavia +12.1% +4
Slide 10: Stable operational performance for KLM while Air France impacted
STABLE OPERATIONAL PERFORMANCE FOR KLM WHILE AIR FRANCE IMPACTED BY OLYMPIC GAMES AND UNIT COST Capacity Revenues Change 2 Operating Change 2 Operating Change 2 Q2 2024 vs Q2 2023 change (€ m) YoY result YoY margin YoY (€ m) +6% 4,802 +3% 195 -287 4.1% -6.3 pt +1% 3,268 +5% 260 +3 8.0% -0.3 pt 1 208
Slide 11: Positive yield development in premium classes and strong Transavia
POSITIVE YIELD DEVELOPMENT IN PREMIUM CLASSES AND STRONG PERFORMANCE FOR TRANSAVIA Q2 2024 vs Q2 2023 Total Long-Haul Short & Medium-Haul1 Transavia Total 88% 88% 84% 90% 12.1% 4.1% 2.9% 2.4% 4.5% 0.1% 0.0 pt 0.3% -0.1 pt -0.4 pt -0.4% -0.1 pt Premium1 North America Caribbean & Indian Ocean Asia & M
Slide 12: H1: Positive recurring adjusted operating free cash flow
H1: POSITIVE RECURRING ADJUSTED OPERATING FREE CASH FLOW Solid Cash at hand H1 2024 Free cash flow evolution Exceptionals: - at end June €9.6bn In € m • €610m one-time payment to the Air France flight crew pension fund (CRPN) • €240m deferred social charges and Leverage within guidance 1.6x Net debt
Slide 13: Outlook
OUTLOOK Steven Zaat – Chief Financial Officer Air France-KLM 13
Slide 14: Q3 booking load factor impacted by Olympic Games
Q3 BOOKING LOAD FACTOR IMPACTED BY OLYMPIC GAMES Q4 STABLE VERSUS LAST YEAR Long-Haul Short and Medium-Haul Transavia 78% 75% 67% 65% 73% 71% Q3 2023 2024 2023 2024 2023 2024 Q3 2024 Capacity +4% +1% +5-10% (vs. 2023) Post 30% 30% 28% 26% Olympic Games 18% 18% (Q4) 2023 2024 2023 2024 2023 2024 Forw
Slide 15: Unit cost outlook at +2% compared to 2023
UNIT COST OUTLOOK AT +2% COMPARED TO 2023 2024 Quarterly unit cost1 per ASK evolution Cost control measures In % year-over-year • Accelerated transformation initiatives to further increase cost savings both at Group +4.0% and airline level via simplification, reduce overhead and create further syner
Slide 16: 70% hedged for 2024, total fuel bill below last year
70% HEDGED FOR 2024 TOTAL FUEL BILL BELOW LAST YEAR WHILE CAPACITY INCREASED 7.7 7.4 Fuel bill after hedge ($bn) FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Market Brent ($ per bbl) 82 82 85 82 80 82 price Jet fuel ($ per metric ton) 962 947 907 884 868 900 FY 2025 34% hedged Jet fuel ($ per met
Slide 17: Outlook 2024
OUTLOOK 2024 FY 2024 Group Capacity +4% vs. 2023 (previously: +5%) +2% (previously: +1-2%) Unit cost1 (Q3: +2%) Net Capex Below €3bn (previously at €3bn) 1) At constant fuel price including SAF, constant currency and excluding Emission Trading Scheme cost (ETS) against 2023 17
Slide 18: 2025: Upward potential through resolving 2024 disruptions
2025: UPWARD POTENTIAL THROUGH RESOLVING 2024 DISRUPTIONS WHILE CONTINUING STRUCTURAL IMPROVEMENTS 1 2024 reminder: Tight labour markets triggering staff shortage together with Through acceleration of current initiatives… supply chain issues, resulting in an inefficient operation leading to: • Conti
Slide 19: Update & Outlook
UPDATE & OUTLOOK Benjamin Smith – Chief Executive Officer Air France-KLM 19
Slide 20: Olympic Games negatively impact summer peak season
OLYMPIC GAMES NEGATIVELY IMPACT SUMMER PEAK SEASON, WITH PROGRESSIVE NORMALIZATION EXPECTED AFTER THE GAMES Pre-Olympics as of June: Overall, negative impact on the classic Both inbound and outbound flows negatively peak season impacted Normalization expected to happen late summer, with progressive
Slide 21: Celebrating 20 years of the Air France-KLM Group's creation
CELEBRATING 20 YEARS OF THE AIR FRANCE-KLM GROUP’S CREATION 1.9% and 2.3%1 of contribution to GDP in France and the Netherlands 76k direct and 820k indirect jobs >€70bn impact to both the French and Dutch economies Steady execution of our strategic roadmap shaping the future of Air France-KLM Source
Slide 22: To conclude
TO CONCLUDE We advance with our strategy deployment: our business model is robust and resilient, leveraging strong assets and unique competitive positioning. Our transformation strategy is well on track: We execute and expand our revenue and cost initiatives, as well as deliver structural improvemen
Slide 23: Appendix
APPENDIX 23
Slide 24: H1 2024 Results
H1 2024 RESULTS Operating result evolution In € m H1 2024 H1 2023 Change Revenues (€ m) 14,603 13,953 +4.7% Operating expenses (€ m) 14,579 13,526 +7.8% EBITDA (€ m) 1,345 1,614 -269 Operating result (€ m) 24 426 -402 Operating margin 0.2% 3.1% -2.9 pt Net income for the period (€ m) -314 275 -589 -
Slide 25: H1 2024 Results
H1 2024 RESULTS 1 Unit Revenue2 Revenues Operating result Operating H1 2024 vs H1 2023 Capacity Change Change Change Constant Curr. (€ m) (€ m) margin +3.2% +0.7% 11,176 +3.3% Network 90 -452m 0.7% -3.7 pt +2.5% 3 -16.2% 1,108 -13.4% Transavia +11.7% +6.4% 1,305 +19.8% -139 +33m -10.7% +5.1 pt Maint
Slide 26: H1 2024 Results
H1 2024 RESULTS H1 2024 vs H1 2023 Capacity Revenues Change 2 Operating Change 2 Operating Change 2 change (€ m) YoY result YoY margin YoY (€ m) +4% 8,834 +3% -54 -355 -0.6% -4.1 pt +4% 6,003 +7% -31 -160 -0.5% -2.8 pt 1 404 101 25.0% +4% 14,603 +5% 24 -402 0.2% -2.9 pt NB: Sum of individual airline
Slide 27: Currency impact on operating result
CURRENCY IMPACT ON OPERATING RESULT Currency impact on revenues and costs In € m -36 12 Revenues and costs per currency FY 2023 REVENUES COSTS -24 US dollar (and related US dollar Q2 2024 currencies) 30 35 Currency impact on revenues 50 65 20 Currency impact on costs, including hedging Euro Other Ot
Slide 28: Debt redemption profile at 30 June 2024
DEBT REDEMPTION PROFILE AT 30 JUNE 2024 Debt reimbursement profile(1) In €m 500 650 500 2,800 500 300 400 550 800 650 600 2024 2025 2026 2027 2028 and beyond Bonds issued by Air France-KLM Other long-term Debt: AF and KLM Sustainability-Linked Bonds Secured Debt, mainly “Asset-backed” 2026: 7.250% (
Slide 29: Investor Relations department
Investor Relations department Michiel Klinkers Marouane Mami Michiel.klinkers@airfranceklm.com Marouane.mami@airfranceklm.com