Air France-klm Sa · EURONEXT:AF
Air France-klm Sa — Non-Deal Roadshow (September 2018)
37 slides from Air France-klm Sa's roadshow presentation, September 2018
Slide 1: Air France-KLM Roadshow Deck
AIR FRANCE-KLM ROADSHOW DECK September 2018
Slide 2: First Half 2018: Operating Result at €228M, Net Debt Reduced
FIRST HALF 2018: OPERATING RESULT AT €228M, WITH -€335M STRIKE IMPACT, NET DEBT REDUCED BY -€315M Change H1 2018 H1 2017 (1) (1) (1) (1) Change at constant currency Revenues (€ bn) 12.43 12.33 +0.8% +4.9% EBITDA (€ m) 1,670 1,940 -270m -216m Operating result (€ m) 228 553 -325m -277m Operating margi
Slide 3: Strengthening of the Financial Structure
STRENGTHENING OF THE FINANCIAL STRUCTURE 3
Slide 4: Network: Long Haul and Medium Haul Contributing to Positive Unit Revenue
NETWORK: BOTH LONG HAUL AND MEDIUM HAUL CONTRIBUTING TO POSITIVE UNIT REVENUE PERFORMANCE
Slide 5: Network: Cargo Increase in Unit Revenues Drives Revenue Growth
NETWORK: CARGO INCREASE IN UNIT REVENUES DRIVES REVENUE GROWTH 5
Slide 6: Transavia Accelerated Growth
TRANSAVIA ACCELERATED GROWTH 6
Slide 7: A World Leader in Maintenance
A WORLD LEADER IN MAINTENANCE 7
Slide 8: Air France-KLM Results Presentation
AIR FRANCE-KLM RESULTS PRESENTATION Results as at 30th of June 2018 1st August 2018
Slide 9: Second Quarter 2018: Key Highlights
SECOND QUARTER 2018: KEY HIGHLIGHTS Leveraging ongoing solid demand Stable operating result before strike impact of - €260m +0.8% +1.7% -€241m -€335m 586 345 334 -1 (2) (2) Q2 17 Q2 18 Q2 17 Q2 18 Q2 17 Q2 18 Q2 17 Q2 18 Passengers RASK(1) Operating result Adj. operating At constant currency free ca
Slide 10: Financial Review
FINANCIAL REVIEW Results as at 30th of June 2018
Slide 11: Second Quarter 2018: Revenue Up, Operating Result at €345M
SECOND QUARTER 2018: REVENUE UP AT CONSTANT CURRENCY, OPERATING RESULT AT €345M, WITH €260M STRIKE IMPACT (1) (1) Change Q2 2018 Q2 2017 Change at constant currency Revenues (€ bn) 6.63 6.63 +0.0% +4.0% EBITDA (€ m) 1,048 1,292 -244m -173m Operating result (€ m) 345 586 -241m -171m Operating margin
Slide 12: Second Quarter 2018: Positive Unit Revenue for Network, Strong Growth for Transavia
SECOND QUARTER 2018: POSITIVE UNIT REVENUE FOR NETWORK, STRONG REVENUE GROWTH FOR TRANSAVIA AND MAINTENANCE Unit (1) (1) (1) Revenues Operating result (3) Capacity Revenue (2) Change Change Operating margin (3) Change Constant Currency (€ m) (€ m) +0.1% +1.6% Network 5,696 -1.2% 236 - 245m 4.1% -4.2
Slide 13: Second Quarter 2018: Long Haul, Hubs and Point-to-Point Unit Revenue
SECOND QUARTER 2018: LONG HAUL, HUBS AND POINT-TO-POINT CONTRIBUTING TO POSITIVE UNIT REVENUE PERFORMANCE Q2 2018 Total RASK ex cur. 0.1% 0.6% 1.6% Premium Economy +5.9% -0.1% ASK RPK RASK ex cur. Medium-haul point-to-point Medium-haul hubs Total medium-haul 4.3% 2.9% 5.0% -1.7% -0.5% -1.6% -0.3% -2
Slide 14: Second Quarter 2018: Unit Cost on Track for Full Year Target
SECOND QUARTER 2018: UNIT COST ON TRACK FOR FULL YEAR TARGET RANGE OF 0 TO +1% +2.9% -3.1% Of which strikes at Air France +3.1%. > Strikes had a -4.5% negative impact on planned +2.7% +2.4% capacity for Air France and -2.5% for the total Group (1) Reported change Currency effect Fuel price effect
Slide 15: Productivity Impacted by Capacity Lower Than Planned
PRODUCTIVITY IMPACTED BY CAPACITY LOWER THAN PLANNED Employee productivity Average FTEs at 84,800, up 1,250 FTEs Average FTEs, including temporary staff compared to last year’s average: 51,750 52,300 +550 FTE +700 FTE > +700 Ground, of which +450 at KLM 31,800 - 1.4% - 0.8% 32,500 > +400 Cabin and
Slide 16: Operating Result Down €241M Due to Strikes
OPERATING RESULT DOWN -€241M DUE TO STRIKES, HIGHER UNIT REVENUES PARTLY OFFSET FUEL AND CURRENCY HEADWINDS In € m +121 586 +2 -129 -160 345 -70 -7 Revenue: -259m Cost: -189m Q2 2017 (1) Activity change Unit revenue Unit cost at Fuel price Currency impact Change in Q2 2018 constant ex-currency pensi
Slide 17: Second Quarter 2018: KLM EBITDA Stable, Operating Result Close to Last Year
SECOND QUARTER 2018: KLM EBITDA STABLE AND OPERATING RESULT CLOSE TO LAST YEAR In € m Revenue In € m EBITDA 4,000 3,925 697 600 603 2,720 2,796 439 (1) Q2 2017 (1) Q2 2018 Q2 2017 (1) Q2 2018 Q2 2017 Q2 2018 Q2 2017 (1) Q2 2018 Operating result Operating margin 351 328 12.9% In € m 11.7% 244 6.1% 13
Slide 18: First Half 2018: Improvement in KLM EBITDA and Operating Result
FIRST HALF 2018: IMPROVEMENT IN KLM EBITDA AND OPERATING RESULT In € m Revenue In € m EBITDA 7,583 7,479 1,078 867 916 4,942 5,182 744 H1 2017 (1) H1 2018 H1 2017 (1) H1 2018 H1 2017 (1) H1 2018 H1 2017 (1) H1 2018 Operating result Operating margin 379 388 7.7% 7.5% In € m 187 2.5% -164 (1) (1) -2.2
Slide 19: First Half 2018: Adjusted Operating Free Cash Flow €141M
FIRST HALF 2018: ADJUSTED OPERATING FREE CASH FLOW €141M +833 In € m • Net investments frontloaded in H1 -121 2018 due to planned fleet deliveries (H1 2017: -73) (H1 2017: +1,656) 1,434 (H1 2017: +846) (H1 2017: -505) -1,488 (H1 2017: -1266) (H1 2017: 658) 141 -517 Cash flow before VDP (1) Change in
Slide 20: Balance Sheet Continues to Improve
BALANCE SHEET CONTINUES TO IMPROVE In € m 6,571 149 6,256 194 5,060 4,849 -517 -141 1,511 1,407 (1) (2) Net debt at 31 Dec 2017 Payment of lease debt Adjusted operating (Re)newed lease debt Currency & other Net debt at 30 Jun 2018 free cash flow Net lease debt Net financial debt (3) Change in Net De
Slide 21: Strategy Update
STRATEGY UPDATE Results as at 30th of June 2018
Slide 22: Phase-in of New Efficient Fleet According to Plan
PHASE-IN OF NEW EFFICIENT FLEET ACCORDING TO PLAN In operation Trend Aircraft 31-Dec-17 30-Jun-18 Medium term Current fleet plan 2017-2020: B747 13 12 > Passenger: phase-in of “Next Generation” wide B777 97 97 = B787 15 18 body B787 & A350 and pursuing phase-out A380 10 10 = of B747 & A340 A34
Slide 23: Extended North Atlantic Joint-Venture on Track for April 2019
EXTENDED NORTH ATLANTIC JOINT-VENTURE ON TRACK FOR IMPLEMENTATION APRIL 1ST 2019 Ambition: expand and strengthen the most powerful North Atlantic JV with Air France-KLM, Delta and Virgin Atlantic 25% capacity share between 300+ daily flights Solid margin generation Europe and North America Implement
Slide 24: Further Progress Within Our Chinese Partnerships
FURTHER PROGRESS WITHIN OUR CHINESE PARTNERSHIPS Towards an extended joint-venture A single joint-venture between Air France, with our equity partner China Eastern KLM, China Southern and Xiamen Airlines • Strengthening of partnership in line with China Eastern’s • Merger of the two existing joint-v
Slide 25: Discussions on Extending Cooperation with Air Europa
DELIVERING ON OUR PARTNERSHIP STRATEGY, DISCUSSIONS ON EXTENDING COOPERATION WITH AIR EUROPA Discussions with Air Europa aiming The enhanced cooperation announced at a joint-venture cooperation between in November 2017 is progressing at a fast Europe and Central/South America, pace on network, reven
Slide 26: Outlook
AIRFRANCE KLM CE OUTLOOK 2018
Slide 27: Revenue Outlook
REVENUE OUTLOOK Long-haul forward booking load factor (change vs previous year) +2 pts +1 pts +1 pts +1 pts + 0 pts Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Long-haul forward booking load factors ahead of last year for the next four months Based on current outlook, Q3 2018 and thus Full Year 2018 unit
Slide 28: Fuel Bill Increase Estimated at €450M in 2018
FUEL BILL INCREASE ESTIMATED AT €450M IN 2018 (1) 6.6 (1) 5.9 2017: 5.0 fuel bill €4.5bn 2018: fuel bill €5.0bn(2) 2019: $ bn fuel bill €5.5bn(2) (1) 1.4(1) 1.7(1) 1.5(1) 2017 1.2 1.3 1.3 1.3 1.3 2018 2019 FY Jan-Dec Q1 Q2 Q3 Q4 Brent ($ per bbl) (1) 73 67 75 75 75 Market price Jet fuel ($ per metri
Slide 29: Full Year Guidance
FULL YEAR GUIDANCE Previous guidance 2018 New Guidance 2018 Passenger +2.5% to +3.5% Unchanged Capacity Slightly accelerated growth forTransavia to benefit from Transavia +6% to +7% +8% to +9% dynamic market demand Fuel +€350 m +€450 m Reflecting expected further increase in oil price Currency Circa
Slide 30: Appendix
APPENDIX Results per 30th of June 2018
Slide 31: First Half 2018: Network Results Impacted by Strikes, Transavia and Maintenance Growth
FIRST HALF 2018: NETWORK RESULTS IMPACTED BY STRIKES, GROWTH OF REVENUES IN TRANSAVIA AND MAINTENANCE Unit Revenues Operating result (3) Capacity (1) Revenue (2) Change Change Operating margin (3) Change Constant Currency (€ m) (€ m) +1.6% +1.3% Network 10,786 -0.3% 150 - 321m 1.4% -3.0 pt -1.0% +6.
Slide 32: First Half 2018: Long Haul and Medium Haul Unit Revenue
FIRST HALF 2018: BOTH LONG HAUL AND MEDIUM HAUL CONTRIBUTING TO POSITIVE UNIT REVENUE PERFORMANCE H1 2018 Total RASK ex cur. 1.6% 2.6% 1.3% Premium Economy +5.4% 0.3% ASK RPK RASK ex cur. Medium-haul point-to-point Medium-haul hubs Total medium-haul 3.0% 3.7% 2.0% 1.1% 1.3% -2.8% -2.7% -6.2% -0.3% A
Slide 33: Fuel Bill Sensitivity Full Year 2018
FUEL BILL SENSITIVITY FULL YEAR 2018 110 100 Market 73.0 $/bbl 90 AFKL price 2018 63.3 $/bbl Hedge gain + 9.7 $/bbl 80 Fuel bill 70 60 50 Price before hedge (in $/bl) without ITP Price after hedge (in $/bl) without ITP 40 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Brent price in USD/bl Based on f
Slide 34: Currency Impact on Operating Result
CURRENCY IMPACT ON OPERATING RESULT Currency impact on revenues and costs FY 2018 guidance In € m -48 FX FY 2018 estimated circa €150m headwind, based on spot €/$ 1.18 Hedging policy on USD, GBP: ~60% and JPY ~40% net operational exposure 2018 Revenues and costs per currency -189 FY 2017 -224 Re
Slide 35: Adjusted Net Result at 30 June 2018
ADJUSTED NET RESULT AT 30 JUNE 2018 In € m +108 +27 -22 -106 0 -159 -60 Net result Discontinued Non current result Value of Balance sheet Tax impact on Adjusted group share operations hedging portfolio valuation adjustments net result Unrealized foreign exchange result: 108 35
Slide 36: Pension Details at 30 June 2018
PENSION DETAILS AT 30 JUNE 2018 In € m 31 Dec 2017 30 Jun 2018 -1,612 -1,453 Net balance sheet situation by airline Net balance sheet situation by airline +67 +210 -1,679 -1,663 Air France Air France end of service benefit plan (ICS): pursuant to French regulations and the company agreement, every
Slide 37: Financial Debt Reimbursement Profile at 30 June 2018
FINANCIAL DEBT REIMBURSEMENT PROFILE AT 30 JUNE 2018 Financial debt reimbursement profile(1) 2015 6.25% undated hybrid bond (€600m) Call: October 2020 In € m 100 600 600 400 1,200 800 750 850 350 450 350 200 2018 2019 2020 2021 2022 2023 2024 2025 and beyond Plain vanilla bonds Hybrid bond (recogniz