International Consolidated Airlines Group Sa · LSE:IAG
International Consolidated Airlines Group Sa — Q4 2021 Earnings Presentation
35 slides from International Consolidated Airlines Group Sa's earnings presentation, Feb 25, 2022
Slide 1: IAG Results Quarter Four 2021
INTERNAL USE ONLY IAG RESULTS QUARTER FOUR 2021 25 February 2022
Slide 2: Highlights
INTERNAL USE ONLY HIGHLIGHTS LUIS GALLEGO, CHIEF EXECUTIVE OFFICER
Slide 3: FY 2021 and 4Q 2021 Financial Highlights
FY 2021 AND 4Q 2021 FINANCIAL HIGHLIGHTS Significantly improved cash flow despite the temporary impact of Omicron FY 2021 operating loss pre-exceptional of €3.0bn in line with guidance Quarterly pre-exceptional operating loss narrowed to €0.3bn in 4Q with increased recovery in capacity (58% of 2019
Slide 4: Operating company priorities
F Y 2 0 2 2 O P E R AT I N G C O M PA N Y P R I O R I T I E S Operating companies are focused on restoring operations and improving customer offerings • Restoring North Atlantic ex- • Ensuring sufficient • Restoring Latin American • Reactivating all aircraft and • Growing Avios Qatar Dublin by 90% b
Slide 5: Outlook FY 2022
OUTLOOK FY 2022 Both operating profit and operating cash flow expected to be significantly positive in 2022 1Q 2022 Easter and Summer FY 2022 • Capacity to be c.65% of 2019 levels • Bookings have continued to strengthen • Capacity to be c.85% of 2019 levels and have not been affected by Omicron • Si
Slide 6: Financial Results
INTERNAL USE ONLY FINANCIAL RESULTS STEVE GUNNING, CHIEF FINANCIAL OFFICER
Slide 7: 4Q 2021 Financial Highlights
4Q 2021 FINANCIAL HIGHLIGHTS Significant improvement in operating and financial performance 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 20 1Q 21 2Q 20 2Q 21 3Q 20 3Q 21 4Q 20 4Q 21 69.1% 71.5% -18.6pts -12.8pts -0.3 -0.5 -0.5 45.8% 51.8% RPK, ASK -34.9pts -33.2pts Pre exceptional -41.7% -1.1 -1.0 Load Factor
Slide 8: Q4 and FY Operating Result
4 Q 2 0 2 1 A N D F Y 2 0 2 1 O P E R AT I N G R E S U LT Operating loss considerably reduced in 4Q €m 4Q 2021 vly v2y FY 2021 vly v2y Passenger revenue 2,695 293% -50% 5,830 5% -74% Cargo revenue 499 28% 71% 1,673 28% 50% Other revenue 340 49% -36% 947 -4% -51% Total revenue 3,534 171% -43% 8,450 7
Slide 9: Financial Performance at Airline Level 4Q
4 Q 2 0 2 1 F I N A N C I A L P E R F O R M A N C E AT A I R L I N E L E V E L Iberia significantly profitable in 4Q 4Q 2021 (€m) v2y 4Q 2021 (£m) v2y 4Q 2021 (€m) v2y 4Q 2021 (€m) v2y Passenger revenue 158 -65% 1,219 -58% 689 -31% 358 -29% Cargo revenue 19 19% 324 80% 112 44% - - Other revenue 3 50
Slide 10: FY 2021 Cash Bridge
FY 2021 CASH BRIDGE Strong cash position throughout the year €m €2,026m +€1,327m Sales in UKEF Term loan £2.0bn (€2.3bn) ISIF loan €75m advance of carriage IAG unsecured bond €1.2bn Aircraft financing €0.2bn +€95m Loyalty IAG convertible bond €825m Other €0.2bn c.20% forex exchange 4,817 (784) posit
Slide 11: Liquidity
LIQUIDITY Highest quarter-end liquidity since the start of the pandemic 11 Liquidity position Liquidity actions Cash + Facilities* (% of 2019 revenue) 1Q 2021 • £2.0bn UKEF guaranteed 5-year loan facility drawdown 36% 32% 41% 40% 42% 47% by British Airways • €75m ISIF facility drawdown by Aer Lingus
Slide 12: Capex Plans FY 2020 - FY 2022
CAPEX PLANS FY 2020 - FY 2022 Significant investment in 2022 Capex €14.2bn €5.7bn €7.0bn 13% €6.5bn €4.2bn €4.3bn €3.9bn 16% 18% €1.7bn expected 15% at 4Q 2020 €2.7bn €2.4bn (Feb 2021) 87% 12% €1.9bn €1.9bn 14% 84% 82% 20% 13% 85% 88% 86% €0.7bn 80% 87% 33% 67% 2020 2021 2022 2020 2021 2022 2020 202
Slide 13: Fleet Plans FY 2020 - FY 2022
FLEET PLANS FY 2020 - FY 2022 25 aircraft expected to be delivered in 2022 Fleet deliveries 143 57 75 70 44 42 38 15 expected at 34 4Q 2020 40 19 (Feb 2021) 16 25 22 33 17 15 10 13 11 25 22 6 17 17 7 15 9 9 9 4 2020 2021 2022 2020 2021 2022 2020 2021 2022 * ** Shorthaul Longhaul Actual Actual CMD 20
Slide 14: Debt Position
DEBT POSITION €0.7 bn decline in net debt in 4Q 2021 €m 31 Dec 2019 31 Dec 2020 31 Mar 2021 30 Jun 2021 30 Sep 2021 31 Dec 2021 Gross debt 14,254 15,679 19,539 19,771 19,975 19,610 Bank and other loans 1,954 3,369 6,948 7,440 7,475 7,485 Asset finance and lease liabilities 12,300 12,310 12,591 12,33
Slide 15: Financial Debt Maturity Profile FY2022-FY2029
F I N A N C I A L D E B T M AT U R I T Y P R O F I L E F Y 2 0 2 2 – F Y 2 0 2 9 INTERNAL USE ONLY Manageable debt repayment schedule €2,804m €864m €822m €825m €680m €700m €571m €283m 2022 2023 2024 2025 2026 2027 2028 2029 UKEF loan ISIF facility Other secured loans Other unsecured bonds and loans
Slide 16: Fuel Hedging
FUEL HEDGING Fuel hedging - 70% in 1Q 2022 and c.60% in FY 2022 Fuel hedging 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 2Q 2023 Jet fuel price scenario $900/mt $900/mt $900/mt $900/mt $900/mt $900/mt $/€ scenario 1.13 1.13 1.13 1.13 1.13 1.13 Hedge ratio 70% 65% 56% 45% 26% 18% Effective blended price
Slide 17: CEO Update & Outlook
INTERNAL USE ONLY CEO UPDATE & OUTLOOK LUIS GALLEGO, CHIEF EXECUTIVE OFFICER
Slide 18: Emerging stronger from COVID-19 – Route network
TRANSFORMING OUR BUSINESS Emerging stronger from COVID-19 – Route network S T R AT E G I C A L LY I M P R O V E D R O U T E N E T W O R K S • London Heathrow better connected • Fully restored and more competitive North Atlantic network planned for Summer 2022 • Latin American network to be c.95% res
Slide 19: Emerging stronger from COVID-19 – Product / Customer
TRANSFORMING OUR BUSINESS Emerging stronger from COVID-19 – Product / Customer S I G N I F I C A N T LY E N H A N C E D C U S TO M E R P R O P O S I T I O N • British Airways’ Club Suite to be rolled out from 37 aircraft to 68 (c.60%) of London Heathrow longhaul fleet by the end of 2022 • Improved c
Slide 20: Emerging stronger from COVID-19 – Our People
TRANSFORMING OUR BUSINESS Emerging stronger from COVID-19 – Our People SUPPORTING OUR P EOPLE • Government job retention schemes to protect sustainable jobs • Wellbeing: COVID-19 safety measures and new channels to support employees’ mental health • Re-boarding: Helping our people to return to flyin
Slide 21: Emerging stronger from COVID-19 – Sustainability
TRANSFORMING OUR BUSINESS Emerging stronger from COVID-19 – Sustainability L E A D I N G G L O B A L AV I AT I O N TO WA R D S N E T Z E R O Commitment Investment and Finance Recognition Net zero emissions by 2050 Investment in ZeroAvia, a Highest rated airline group for target extended to also hydr
Slide 22: Emerging stronger from COVID-19 – Competitive cost
TRANSFORMING OUR BUSINESS Emerging stronger from COVID-19 – Competitive cost DELIVERING EFFICIENCY IN ALL OF OUR BUSINESSES • Continued restructuring in 2021 • Rationalisation of bases (e.g. Aer Lingus Shannon base, 3 LEVEL bases) • Increased outsourcing to make cost more variable (e.g. Aer Lingus c
Slide 23: Weekly New Passenger Booking Intakes
W E E K LY N E W PA S S E N G E R B O O K I N G I N TA K E S Bookings recovery has resumed following Omicron impact in late 2021 Longhaul International shorthaul Spain domestic vs. 2019 (5 Jan 20 – 20 Feb 22) vs. 2019 (5 Jan 20 – 20 Feb 22) vs. 2019 (5 Jan 20 – 20 Feb 22) 31 Oct 120% 120% 120% 120%
Slide 24: Premium Revenue Performance
0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 120% 140% % of 2019 % of 2019 Apr-20 Apr-20 May-20 May-20 Jun-20 Jun-20 Carribean Jul-20 Jul-20 Aug-20 Aug-20 Sep-20 Sep-20 Oct-20 Oct-20 AMESA Nov-20 Nov-20 Dec-20 Dec-20 Premium Leisure Jan-21 Jan-21 Feb-21 Feb-21 Asia Pacific Mar-21 Mar-21 Apr-21 Ap
Slide 25: FY 2022 capacity planned to be c.85% of 2019
F Y 2 0 2 2 C A PA C I T Y G R O W T H FY 2022 capacity planned to be c.85% of 2019 1Q 2022 capacity to be c.70% of 2019 Absolute 2022 and % proportion of 2019 ASKs 90,000 90% FY 2022 capacity to be c.90% of 2019 95% 80,000 85% 1Q 2022 capacity to be c.60% of 2019 70,000 FY 2022 capacity to be c.80%
Slide 26: Outlook
OUTLOOK Both operating profit and operating cash flow expected to be significantly positive in 2022 Travel restrictions have mostly been removed for fully vaccinated travellers with the exception of Asia • UK removed all pre-departure (7 January) and post-arrival (11 February) testing requirements •
Slide 27: Conclusions
CONCLUSIONS Emerging in 2022 from the pandemic in a stronger competitive position • We have continued to invest in our people and product in order to deliver the best customer experience • IAG continues to lead the industry’s efforts to make flying sustainable • 4Q 2021 demonstrated continued reduce
Slide 28: Appendices
INTERNAL USE ONLY APPENDICES
Slide 29: Reconciliation of Operating Result to Result After Tax
R E C O N C I L I AT I O N B E T W E E N P R E - E X C E P T I O N A L O P E R AT I N G R E S U LT A N D P O S T - E X C E P T I O N A L R E S U LT A F T E R TA X Loss after tax and exceptional items of c.€2.9bn in FY 2021 €m FY 2021 FY 2020 Operating result (pre exceptional) -2,970 -4,390 Exception
Slide 30: FY Financial Performance at Airline Level
F Y 2 0 2 1 F I N A N C I A L P E R F O R M A N C E AT A I R L I N E L E V E L Iberia and Vueling outperformed in 2021 due to exposure to less restricted markets FY 2021 (€m) v2y FY 2021 (£m) v2y FY 2021 (€m) v2y FY 2021 (€m) v2y Passenger revenue 308 -85% 2,316 -81% 1,724 -58% 1,011 -59% Cargo reve
Slide 31: 4Q and FY 2021 traffic and capacity statistics vs 2019
Quarter FY Group performance 4Q 2021 4Q 2019 v2y 2021 2019 v2y Passengers carried ('000s) 15,309 27,805 -44.9% 38,864 118,253 -67.1% Domestic (UK & Spain) 5,347 6,836 -21.8% 16,061 28,278 -43.2% Europe 6,842 14,035 -51.3% 16,341 62,344 -73.8% GROUP PERFORMANCE North America 1,217 3,126 -61.1% 2,145
Slide 32: 4Q and FY 2021 traffic and capacity statistics vs 2020
Quarter FY Group performance 4Q 2021 4Q 2020 vLY 2021 2020 vLY Passengers carried ('000s) 15,309 4,298 +256.2% 38,864 31,275 +24.3% Domestic (UK & Spain) 5,347 1,822 +193.5% 16,061 10,443 +53.8% Europe 6,842 1,611 +324.7% 16,341 14,150 +15.5% GROUP PERFORMANCE North America 1,217 180 +576.1% 2,145 2
Slide 33: Airline performance: traffic and capacity vs 2019
Quarter FY Performance by airline 4Q 2021 4Q 2019 v2y 2021 2019 v2y Passengers carried ('000s) 1,014 2,608 -61.1% 2,025 11,649 -82.6% Revenue passenger km (m) 1,877 5,720 -67.2% 3,545 24,753 -85.7% AIRLINE PERFORMANCE Available seat km (m) 3,162 7,132 -55.7% 7,380 30,255 -75.6% Passenger load factor
Slide 34: Airline performance: traffic and capacity vs 2020
Quarter FY Performance by airline 4Q 2021 4Q 2020 vLY 2021 2020 vLY Passengers carried ('000s) 1,014 151 +571.5% 2,025 2,118 -4.4% Revenue passenger km (m) 1,877 229 +719.7% 3,545 4,056 -12.6% AIRLINE PERFORMANCE Available seat km (m) 3,162 1,097 +188.2% 7,380 8,741 -15.6% Passenger load factor (%)
Slide 35: Disclaimer
INTERNAL USE ONLY DI S CLAIMER Forward-looking statements: Certain statements included in this announcement are forward-looking. These statements can be identified by the fact that they do not relate only to historical or current facts. By their nature, they involve risk and uncertainties because th
International Consolidated Airlines Group — Q4 2021 Earnings Presentation on 6ix