Aeroflot · RUS:AFLT
Aeroflot — FY2020 Earnings Presentation
47 slides from Aeroflot's earnings presentation, Mar 11, 2021
Slide 1: Aeroflot Group Q4 & 12M 2020 IFRS Results
AEROFLOT GROUP Q 4 & 1 2 M 2 0 2 0 I F R S R E S U LT S 11 March 2021 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 Q4 2020 Highlights
Aeroflot Group Q4 2020 Highlights Strong Domestic Further recovery of Intl Yield normalization1 Reinforced Liquidity2 Million PAX Thousand PAX Y-o-y change, % Billion RUB (19.5)% +29.1% +6.4 p.p. +3.6x Q3 2020 Q4 2020 7.8 mln 799 93.8 619 6.3 mln (7.3)% 25.9 Q4 2019 Q4 2020 Q3 2020 Q4 2020 (13.7)% D
Slide 4: Agenda
1. Market Update and Operating Results 2. Aeroflot Group Transformation Update 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 1: Strategy 2028 7. Appendix 2 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 -30.6 (50.2)% 30.2 International Routes -15.5 147.2 Domestic Routes -5.6
Slide 6: Market Recovery in 2H 2020
Market Recovery in 2H 2020 Total Market Passenger Traffic Total Market Passenger Traffic Dynamics Million PAX % change y-o-y 10.1 8% 8% 6% 7% 9.5 7% 6% 9.0 9.0 5% 4% 0.9 (7)% 1.5 (15)% (16)% 4.9 7.0 7.0 (15)% 6.8 (31)% 4.1 (23)% (39)% 1.4 (43)% (45)% 2.5 5.3 4.9 (49)% (59)% (47)% 0.7 (58)% (52)% 0.7
Slide 7: European Carriers: Capacity Recovery Pace
European Carriers: Capacity Recovery Pace Capacity of Key European Aviation Groups as a Percentage of 2019 Capacity % of airline’s 2019 capacity 100% 90% 80% 70% 60% 54.5% 50% 44.6% 40% 30% 32.0% Total Europe 24.8% 20% 16.4% 10% 11.4% 10.3% 6.4% 0% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Feb-2021 Source: CA
Slide 8: Aeroflot Group Performance Across Different Brands
Aeroflot Group Performance Across Different Brands Brand Business Model 12M 2020 PAX Contribution1 and Dynamics January 2021 • Flagship carrier -60.9% • Premium product (4 Stars) 48.3% 37.2 -60% PAX Premium • High income and middle class 14.6 14.6 • Hub and spoke model -68% ASK 2019 2020 -11.7% • Po
Slide 9: Pobeda Airline: Timely Value Proposition
Pobeda Airline: Timely Value Proposition Overview Total PAX dynamics in 2020 mn PAX, change y-o-y Growing PAX numbers in Q3 and Q4 2019 2020 3.4 after restarting operations in June 3.0 2.7 2.8 2.5 2.5 9.1 mm PAX 2.0 transported in 2020 (-11.7% y-o-y) 91.6% PLF 0.4 LF remained high in 2020 despite on
Slide 10: Agenda
1. Market Update and Operating Results 2. Aeroflot Group Transformation Update 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 1: Strategy 2028 7. Appendix 2 10
Slide 11: Aeroflot Group Transformation: 2020 Results
Aeroflot Group Transformation: 2020 Results Managing • Project office established transformation • Aeroflot Group transformation plan approved • Short term plans (incl. 2021 budget) developed in line with the Strategy 2021 plans • Fleet and network transformation mid-term plan approved • Pobeda has
Slide 12: Aeroflot Group Network and Fleet Transformation
Aeroflot Group Network and Fleet Transformation Transferring Aeroflot fleet to Pobeda and Rossiya Reorganization1 of Aeroflot Group network: 2021 Pobeda to begin Rossiya to begin operations on: operations on: ~ 10 ~ 22 routes domestic routes 10 B737 2021 41 SSJ ~2 ~5 routes routes international Rout
Slide 13: Agenda
1. Market Update and Operating Results 2. Aeroflot Group Transformation Update 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 1: Strategy 2028 7. Appendix 2 13
Slide 14: 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 15: Aeroflot Group Network Adjustments
Aeroflot Group Network Adjustments Gradual reopening of international network… …Supports passenger traffic recovery since August Aeroflot Airline, number of one-way weekly flights Aeroflot Airline, thousand PAX 211.3 Aug Sep Oct Nov Dec Dec 196.3 Destination 188.7 20 20 20 20 20 19 London 11 14 11 1
Slide 16: Aeroflot Group Scheduled Flights Revenue Units
Aeroflot Group Scheduled Flights Revenue Units RUB RUB Q4 Scheduled Yield (PAX 0.7% Revenue / RPK) Q4 Scheduled RASK (PAX Revenue / ASK) 3.2% 1.1% RUB / RPK 73.5% RUB / ASK 50.2% 6.76 4.44 (7.3)% (26.1)% (12.8)% (19.8)% 3.90 3.75 2.93 2.95 2.94 3.57 3.48 2.86 2.57 2.16 Domestic International Total D
Slide 17: Agenda
1. Market Update and Operating Results 2. Aeroflot Group Transformation Update 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 1: Strategy 2028 7. Appendix 2 17
Slide 18: Fleet Update
Fleet Update Actual and expected additions Fleet Plans Type of Fleet as at 12M 2020 Fleet as at aircraft 31.12.2019 Delivery Phase out 31.12.2020 In 2020 Aeroflot Group Wide-body (long-haul) 59 1 (4) 56 operated ~360 aircraft A-330 21 - (4) 17 A-350 - 1 - 1 B-777 29 - - 29 Aurora Airlines was sold i
Slide 19: Agenda
1. Market Update and Operating Results 2. Aeroflot Group Transformation Update 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 1: Strategy 2028 7. Appendix 2 19
Slide 20: Financial Highlights: Q4 and 12M 2020
Financial Highlights: Q4 and 12M 2020 Q4 2019 Q4 2020 Change Million RUB (where applicable) 12M 2019 12M 2020 Change 13,990 7,100 (49.2)% Passenger Traffic (mln PAX) 60,719 30,157 (50.3)% 153,898 67,969 (55.8)% Revenue 677,881 302,182 (55.4)% 132,536 50,133 (62.2)% PAX Traffic Revenue 594,570 243,70
Slide 21: Revenue Dynamics Decomposition
Revenue Dynamics Decomposition Revenue by Key Factors Revenue by Business Segments Million RUB Million RUB 677,881 (322,012) 677,881 (331,379) 6,262 (29,041) (30,908) (19,483) 302,182 7,486 (32,323) 302,182 12M 2019 Volume Currency Pricing Other 12M 2020 12M 2019 Scheduled Charter Cargo Other 12M 20
Slide 22: Operating Costs
Operating Costs Operating Expenses Breakdown Change Change Operating Expense Change Change % of OpEx Q4 2019 Q4 2020 12M 2019 12M 2020 y-o-y ex. FX (RUB mln if not stated otherwise) y-o-y ex. FX (12M 2020) 45,307 15,451 (65.9)% (67.7)% Fuel 190,876 77,457 (59.4)% (60.3)% 19.6% 109,623 87,916 (19.8)%
Slide 23: Group Unit Costs
Group Unit Costs Unit Costs Dynamics Capacity: ASK adjustment Billion ASK Operating Expense per ASK (CASK), RUB 12M 2019 12M 2020 Change (51.6)% Fuel 1.00 0.84 (16.2)% CASK (ex. Fuel): 2.23 3.43 53.5% 190.9 Aircraft and Passenger Servicing 0.67 0.69 3.3% D&A and Customs Duties 0.57 1.29 2.3x Staff 0
Slide 24: Fuel Cost Management
Fuel Cost Management Aeroflot Airline Jet Fuel Price Fuel Efficiency Thousand RUB per tonne of jet fuel (gramme / ASK) 50 4.1% 22.3 23.2 45 43.9 40 35.3 2019 2020 35 33.5 Average fuel price per tonne 30 31.1 Aeroflot Airline: 25 • 12M 2020: 35.3 thd RUB (-19.7% yoy). 20 • Q4 2020: 31.5 thd RUB (-28.
Slide 25: Pobeda Financial Results
Pobeda Financial Results PAX Traffic and Other Operating Metrics Pobeda Statement of Profit and Loss (IFRS) Million PAX, dynamics y-o-y 10.3 Million RUB 12M 2019 12M 2020 Change 9.1 PAX -12% Revenue 53,184 37,932 (28.7)% ASK -14% 12M 2019 12M 2020 PLF -2.5 p.p Operating Expenses 43,222 34,452 (20.3)
Slide 26: Leverage and Liquidity
Leverage and Liquidity Debt Profile1 Liquidity Billion RUB 236.6 Million RUB 31-Dec-2019 31-Dec-2020 Change 191.1 157.1 142.8 118.7 Borrowings 15,792 88,635 5.6x 148.0 108.4 81.3 93.8 Lease Liabilities 557,124 662,507 18.9% 37.4 48.7 43.1 31-Mar-20 30-Jun-20 30-Sep-20 31-Dec-20 Cash and ST investmen
Slide 27: Optimizations with Liquidity in Focus
Optimizations with Liquidity in Focus Reduced monthly costs Operating Cash Flow Steps to improve liquidity Billion RUB, monthly average, includes Billion RUB Operating Cash Flow before OPEX and net finance costs Working Capital changes 80bn RUB Working Capital changes Down 32% SPO proceeds 55.0 Octo
Slide 28: Agenda
1. Market Update and Operating Results 2. Aeroflot Group Transformation Update 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 1: Strategy 2028 7. Appendix 2 28
Slide 29: 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 30: 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 31: 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 32: 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 33: 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 34: Agenda
1. Market Update and Operating Results 2. Aeroflot Group Transformation Update 3. Network and Schedule Overview 4. Fleet Overview 5. Financial Performance 6. Appendix 1: Strategy 2028 7. Appendix 2 34
Slide 35: Operating Data – Q4 & 12M 2020
Operating Data – Q4 & 12M 2020 Indicators Aeroflot Airlines Aeroflot Group Q4 Q4 12M 12M Q4 Q4 12M 12M 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 8,787 2,942 (66.5%) 37,221 14,563 (60.9%) 13,990 7,100 (49.2%) 60,719 30,157 (50.3%) International Rout
Slide 36: Operating Data of Subsidiary Airlines – Q4 & 12M 2020
Operating Data of Subsidiary Airlines – Q4 & 12M 2020 Indicators Pobeda Rossiya Aurora Q4 12M Q4 12M Q4 12M 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 2,775 2.5% 9,087 (11.7%) 1,199 (43.4%) 5,711 (50.6%) 184 (51.2%) 796 (52.0%) International Routes th
Slide 37: 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 19.1 21.2 22.0 23.6 18.6 1,0 mln 9,8 mln 6.6% 23.1 24.2 25.5 25.3 66.7% 18.0 18.2 17.8 16.2 17.0 1,3 mln 13.1 8.8% 13.1 13.9 14.1 12.5 7.4 2,6 mln 1
Slide 38: 12M 2020 Operating Data by Region (Scheduled Routes)
12M 2020 Operating Data by Region (Scheduled Routes) Americas Russia CIS (14.9) p.p. (9.8) p.p. (11.2) (21.9)% p.p. (30.8)% (31.1)% Passengers RPK ASK PLF (72.0)% carried (77.3)% (75.9)% (72.1)% (77.0)% (77.0)% Passengers RPK ASK PLF Passengers RPK ASK PLF carried carried Europe Middle East Asia (7.
Slide 39: 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. Aircraft Type Wide-body Aeroflot Subsidiaries 31-Dec-20 31-Dec-19 31-Dec-19 16% Wide-body 37 19 56 59 (3) Airbus A330 17 - 17 21 (4) Narrow- body Airbus A350 1 - 1 - 1 (r
Slide 40: Traffic Revenue Analysis – Q4 and 12M 2020
Traffic Revenue Analysis – Q4 and 12M 2020 Traffic Revenue Breakdown by Type Revenue from Scheduled Passengers (RUB mln)1 Sheduled 12M 2020 Passenger Flights 12M 12M 83.5% Q4 2019 Q4 2020 Y-o-Y Region Y-o-Y % of sch. 2019 2020 revenue 52,461 32,156 (38.7)% Russia 234,801 142,588 (39.3)% 63.2% 31,734
Slide 41: Aeroflot Group Blended Flights Revenue Units
Aeroflot Group Blended Flights Revenue Units RUB RUB 1.1% Q4 Yield (Scheduled + Charter 0.7% PAX Revenue / RPK) Q4 RASK (Scheduled + Charter PAX Revenue / ASK) 3.2% RUB / RPK 68.3% RUB / ASK 48.3% 4.30 6.32 (24.6)% (10.1)% (18.8)% (4.7)% 2.94 2.90 2.91 2.62 3.58 3.75 3.68 3.51 2.22 2.91 Domestic Int
Slide 42: Aeroflot Group Scheduled Flights Revenue Units ex. Pobeda
Aeroflot Group Scheduled Flights Revenue Units ex. Pobeda RUB RUB Q4 Scheduled Yield ex. Pobeda 0.7% (PAX Revenue / RPK) Q4 Scheduled RASK ex. Pobeda 1.1% (PAX Revenue / ASK) 3.2% RUB / RPK 89.0% RUB / ASK 59.8% 7.51 4.75 7.2% (23.8)% (4.8)% (13.1)% 3.10 2.97 3.02 4.24 2.87 3.94 3.97 3.96 3.42 2.36
Slide 43: EBITDA Evolution
EBITDA Evolution Total effect on revenue Total effect on costs ∑=(375,699) RUB mln ∑=233,764 RUB mln Net volume and price effect Net FX effect Net volume and price effect ∑=(381,961) RUB mln ∑=(1,355) RUB mln ∑=241,381 RUB mln (322,012) 168,924 8,778 11,405 10,080 2,371 26,988 66,360 27,308 115,079
Slide 44: Operating and Free Cash Flows
Operating and Free Cash Flows 106,080 5,066 6,502 (3,818) 13,254 (15,344) (9,900) 6,433 (5,976) 44,744 2,022 972 26,834 23,016 9,101 118,633 (153,487) Loss Before D&A Interest Unrealized Effect from Goodwill Result from Other Adj. Cash Flows Working Net Cash Purchase of Deposit Net Pre- Net Lease Fr
Slide 45: 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) Vitaly Saveliev Chairman Mikhail Poluboyarinov Personnel and Remuneration Maksut Shadayev Board of Direc
Slide 46: 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 Sherotel 100% Hotel services Aeroflot Aviation School 100% Education services LLC A-Tec
Slide 47: Investor Relations Contacts
Investor Relations Contacts Address: 119019, Russia, Moscow, Arbat St. 1 E-mail: ir@aeroflot.ru Website: www.aeroflot.ru