Aeroflot · RUS:AFLT
Aeroflot — FY2019 Earnings Presentation
39 slides from Aeroflot's earnings presentation, Mar 3, 2020
Slide 1: Aeroflot Group Q4 and 12M 2019 IFRS Results
AEROFLOT GROUP Q 4 AN D 1 2 M 2 0 1 9 I F R S R E S U LT S 3 March 2020 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 12M 2019 Highlights
Aeroflot Group 12M 2019 Highlights + 9.0 % + 10.3 % + 10.8 % +2.4x 678 bn 13.5 bn 612 bn 60.7 mln 190.9 bn 5.7 bn1 55.7 mln 173.1 bn PAX ASK Revenue (RUB) Net Income (RUB) 12M 2018 12M 2019 • In 12M 2019 Aeroflot Group has continued operational development via expanding capacity on the back of oppor
Slide 4: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 4
Slide 5: Competitive Dynamics
Competitive Dynamics Passenger Traffic: Market vs Aeroflot Group Change in Airlines’ Passenger Numbers Russian Air Transportation Market (million PAX) International Routes mln PAX, 12M 2019 Change in PAX million incl. PAX of Russian and Foreign Carriers and intl. transit PAX Domestic Routes 7.5% +5.
Slide 6: Aeroflot Group Multi-Brand Strategy
Aeroflot Group Multi-Brand Strategy Brand Business Model Focus Airport PAX Contribution1 PAX Growth • 12M 2019 • Flagship carrier Moscow (Sheremetyevo) +4.1% • Premium product (4 Stars) 35.8 37.2 Premium • High income and middle class 61.3% 37.2 • Hub and spoke model 12M 2018 12M 2019 • Scheduled ne
Slide 7: Pobeda Airline: Acceleration of Growth
Pobeda Airline: Acceleration of Growth Overview of Pobeda Pobeda’s Network • Operating from Vnukovo airport (3rd Moscow airport by PAX) Petrozavodsk Network Surgut • Network comprising 108 routes (62 unique for the Group) Helsinki 14 Saint Petersburg Kirov Perm Moscow Kazan Ekaterinburg Tomsk Krasno
Slide 8: Aeroflot Airline Domestic and International Transit
Aeroflot Airline Domestic and International Transit Growing Connectivity of Aeroflot Airline’s Flights1 ... … Results into a Flexible Approach to Transit Flows Average weekly frequency per route – Aeroflot airline Considerable share of transit of Aeroflot airline in Sheremetyevo Growth 16.0x 19.1x 2
Slide 9: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 9
Slide 10: Aeroflot Group Network
Aeroflot Group Network # of Flights Evolution by Region1 Geographic Network (12M 2019, y-o-y) Russia 3.3 % Murmansk Arkhangelsk Salekhard New Urengoy Syktyvkar Khanty Mansiysk Saint Petersburg Surgut Yakutsk Nizhnekamsk Nizhnevartovsk Perm Magadan Europe 7.0 % Kaliningrad Novokuznetsk MOSCOW Nizhny
Slide 11: Aeroflot Group Scheduled Flights Revenue Units
Aeroflot Group Scheduled Flights Revenue Units Q4 Yield (PAX Revenue / RPK) Q4 RASK (PAX Revenue / ASK) RUB RUB 0.7% 1.1% 3.7% 3.2% 6.6% 8.4% 3.87 3.90 3.75 2.92 2.92 2.95 2.94 3.57 3.62 2.85 3.29 2.74 Domestic International Total Domestic International Total 12M Yield (PAX Revenue / RPK) 12M RASK (
Slide 12: Aeroflot Airline Yield Dynamics (Monthly)
Aeroflot Airline Yield Dynamics (Monthly) Aeroflot Airline Total Yield, 2018 Aeroflot Airline Total Yield, 2019 RUB/RPK, Change y-o-y in % RUB/RPK, Change y-o-y in % 17.2% 9.4% 7.9% 7.1% 6.5% 5.4% 5.8% 5.1% 4.5% 4.6% 4.6% 9.8% 9.1% 8.2% 7.7% 7.8% 7.5% Jun Jul 6.2% Jan Feb Mar Apr May Aug Sep Oct Nov
Slide 13: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 13
Slide 14: Fleet Plan
Fleet Plan Delivery/Phase-out Schedule1 3 Type of 12M 2019 Fleet as at 2020E 1 31.12.2019 aircraft Delivery Phase out Delivery Phase out Wide-body (long-haul) 2 (1) 59 13 (9) A-330 - (1) 21 - (9) A-350 - - - 11 - B-777 2 - 29 2 - B-747 - - 9 - - Narrow-body (medium-haul) 7 (13) 238 16 (2) A-319 - (5
Slide 15: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 15
Slide 16: Financial Highlights: 12M 2019
Financial Highlights: 12M 2019 Q4 2018 RUB mln 12M 2018 Q4 2019 Change 12M 2019 Change restated1 (where applicable) restated1 13,461 13,990 3.9% Passenger Traffic (mln PAX) 55,710 60,719 9.0% 145,225 153,898 6.0% Revenue 611,570 677,881 10.8% 124,319 132,536 6.6% PAX Traffic Revenue 534,292 594,570
Slide 17: Revenue Growth Decomposition
Revenue Growth Decomposition Revenue by Key Factors Revenue by Business Segments RUB mln RUB mln 10.8% 10.8% 6.5% + 0.6% + 3.3% + 0.4% 9.9% + (0.1)% + 0.1% + 0.9% 20,328 2,530 677,881 5,651 39,498 3,956 60,678 (400) 382 677,881 611,570 611,570 Depreciation of Domestic yield up by 7%, international y
Slide 18: Operating Costs
Operating Costs Operating Expense Q4 2018 Change Change 12M 2018 12M Change Change % of Total OpEx Q4 2019 (RUB mln If not stated restated1 y-o-y ex. FX otherwise) restated1 2019 y-o-y ex. FX (12M 2019) 49,899 45,307 (9.2)% (9.2)% Fuel 181,864 190,876 5.0% 4.0% 30.9% 101,557 109,623 7.9% 8.8% Opex (
Slide 19: Group Unit Costs
Group Unit Costs Q4 2018 12M 2018 Q4 2019 Change Operating Expense per ASK (CASK), RUB 12M 2019 Change restated1 restated1 1.14 1.00 (12.8)% Fuel 1.05 1.00 (4.8)% 2.32 2.41 3.7% Opex (ex. Fuel): 2.13 2.23 4.8% 0.64 0.67 3.8% Aircraft and Passenger Servicing 0.63 0.67 6.5% 0.57 0.62 8.6% D&A and Cust
Slide 20: EBITDA Evolution
EBITDA Evolution (RUB mln) Total effect on revenue Total effect on costs ∑=66,311 RUB mln ∑=(48,904) RUB mln Net volume and price effect Net FX effect Net volume and price effect ∑=62,355 RUB mln ∑=721 RUB mln ∑=(45,669) RUB mln 3,956 (3,235) (7,253) 20,328 2,530 (10,156) (18,988) 39,498 (2,244) (5,
Slide 21: Pobeda Financial Results
Pobeda Financial Results 1 Increasing PAX Traffic RASK dynamics Pobeda Statement of Profit and Loss (IFRS, standalone) Million passengers RUB 10.3 12M 2018 2.70 RUB mln 12M 20192 Change 2.47 restated2 7.2 Revenue 34,373 53,184 54.7% 12M 2018 12M 2019 12M 2018 12M 2019 Operating Expenses 29,452 43,22
Slide 22: Leverage and Liquidity
Leverage and Liquidity Debt Profile1 Net Debt / EBITDA RUB mln 31-Dec-2018 31-Dec-2019 Change 4.2 3.9 3.4 3.5 3.2 Borrowings 3,486 15,792 +4.5x Lease Liabilities 655,931 557,124 (15.1)% 31-Dec-2018 31-Mar-2019 30-Jun-2019 30-Sep-2019 31-Dec-2019 Pension Liabilities 908 784 (13.7)% Borrowings breakdo
Slide 23: 2020 Guidance
2020 Guidance Market and External Environment Indicator 2019 Targets Checklist Long-term targets Long-term CAGR in the range of 6%-7% PAX Single digit growth (6%-7%, in +7.5% 2020 impacted by COVID-19 and B737-MAX trends line with long-term CAGR) delays Aeroflot Group 2019 Targets Checklist 2020 Tar
Slide 24: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 24
Slide 25: Russian Air Transportation Market: Room for Growth
Russian Air Transportation Market: Room for Growth Russian Total Passenger Traffic Growth, mln PAX(1) Trips per Capita (2) Despite fast growth of the recent years, Total CAGR 8.2% Russian airline industry still has International – 7.9% | Domestic – 8.6% 7.5% promising growth prospects 3.7 Change 147
Slide 26: Market Return to Growth
Market Return to Growth Passenger Traffic (Russian and Foreign Carriers) Capacity (Russian and Foreign Carriers) Change in PAX traffic y-o-y, % Change in ASK y-o-y, % 10.7% 10.0% 8.2% 5.9% 6.9% 13.8% 14.4% 10.9 % 11.9% 10.5% 10.6 % 11.9% 11.0 % 10.0 % 9.8% 9.4% 9.1 % 7.2% 6.9 % 0.6 % 5.0% 4.1% (6.3)
Slide 27: Operating Data – Q4 & 12M 2019
Operating Data – Q4 & 12M 2019 Aeroflot airline Aeroflot Group Indicator Unit Q4 Q4 12M 12M Q4 Q4 12M 12M Y-o-Y Y-o-Y Y-o-Y Y-o-Y 2018 2019 2018 2019 2018 2019 2018 2019 Passenger Traffic th PAX 8,992 8,787 (2.3%) 35,762 37,221 4.1% 13,461 13,990 3.9% 55,710 60,719 9.0% International Routes th PAX 4
Slide 28: Key Operating Data of Subsidiary Airlines – 12M 2019
Key Operating Data of Subsidiary Airlines – 12M 2019 Rossiya Pobeda Aurora Indicator Unit Q4 12M Q4 12M Q4 12M Y-o-Y Y-o-Y Y-o-Y Y-o-Y Y-o-Y Y-o-Y 2019 2019 2019 2019 2019 2019 Passenger Traffic th PAX 2,120 1.2% 11,553 3.7% 2,706 34.8% 10,287 43.2% 378 2.9% 1,658 2.2% International Routes th PAX 95
Slide 29: 12M 2019 Operating Data by Region (Scheduled Routes)
12M 2019 Operating Data by Region (Scheduled Routes) Americas Russia CIS 8.4 % 8.2 % 9.9 % 4.8 % 2.1 p.p. 2.1 % (1.3) p.p. (1.8)% (2.1) p.p. (1.8)% (1.9)% Passengers RPK ASK PLF (4.3)% Passengers RPK ASK PLF Passengers RPK ASK PLF carried carried carried Performance of North and Central American Cap
Slide 30: 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 Aeroflot Subsidiaries 31-Dec-19 31-Dec-18 31-Dec-18 Wide-body 17% Wide-body 40 19 59 58 1 Airbus A330 21 - 21 22 (1) Narrow- Boeing 777 19 10 29 27 2 body (
Slide 31: Aeroflot Group Fleet Evolution
Aeroflot Group Fleet Evolution Aeroflot Group Fleet in Operation Average Age of the Fleet 1 Aircraft Average Age 5.0 Etihad Airways 5.2 7.0 6.9 IndiGo 5.5 6.4 6.5 6.2 6.2 Wizz Air 5.5 366 359 Hainan Airlines 5.6 325 289 Sichuan Airlines 5.8 251 247 Vietnam Airlines 5.8 Spirit Airlines 5.9 Azul 6.0 Q
Slide 32: Traffic Revenue Analysis
Traffic Revenue Analysis Traffic Revenue Breakdown by Type Revenue from Scheduled Passengers (RUB mln)1 12M 2019 12M 12M 12M 2019, % of Sheduled Q4 2018 Q4 2019 Y-o-Y Region Y-o-Y 2018 2019 sch. revenue Passenger Flights 90.8% 46,300 52,385 13.1% Russia 202,192 234,725 16.1% 42.1% 30,096 31,740 5.5%
Slide 33: Aeroflot Group Blended Flights Revenue Units
Aeroflot Group Blended Flights Revenue Units Q4 Yield (Scheduled + Charter PAX Revenue / RPK) Q4 RASK (Scheduled + Charter PAX Revenue / RPK) RUB RUB (0.3)% 6.3% 0.0% 2.4% 2.9% 8.2% 3.77 3.76 2.93 2.90 2.90 2.91 3.68 2.85 3.58 3.58 2.76 3.31 Domestic International Total Domestic International Total
Slide 34: Headcount Overview
Headcount Overview Aeroflot Group Headcount by Category Other non-airline 31-Dec-2018 31-Dec-2019 % Flight crew personnel 11.1% 16.9% Flight crew 4,119 4,596 11.6 % Cabin crew 12,168 12,822 5.4 % (14.2)% Cabin crew Other airline personnel (inc. airlines’ head office) 19,690 16,885 31.0% Other non-ai
Slide 35: Operating and Free Cash Flows
Operating and Free Cash Flows (RUB mln) Million RUB 12M 2019 Million RUB 12M 2019 Other adjustments before working capital changes, incl. (8,098) Working capital changes and income tax, incl. (10,329) Change in provisions (2,556) Change in accounts receivable and prepayments (688) Effect from revenu
Slide 36: Net Income Evolution
Net Income Evolution (RUB mln) 4,420 1,046 (11,422) 76,344 221 5,651 60,660 13,512 (55,694) (66,384) (1,330) Restated Net Traffic Revenue Other Revenue Operating Finance Income Finance Costs Hedging Result Revaluation of Taxation Other Net Income 12M Income 12M Expenses Equity 2019 2018 Investments
Slide 37: Board of Directors
Board of Directors Corporate Governance Board of Directors Personnel and Audit Strategy Name Remuneration Committee Committee Committee General Meeting of Audit Committee Shareholders (3 members) Evgeny Ditrich Chairman Mikhail Poluboyarinov Deputy Chairman Personnel and Remuneration Board of Direct
Slide 38: Aeroflot Group Structure
Aeroflot Group Structure PJSC Aeroflot Airlines Ancillary Companies JSC Rossiya Airlines 75%-1 sh. CJSC Aeromar 51% On-board sales/catering LLC Aeroflot-Finance LLC Pobeda Airlines 100% 100% Financial services JSC Sherotel JSC Aurora Airlines 51% 100% Hotel services Aeroflot Aviation School 100% Edu
Slide 39: Investor Relations Contacts
Investor Relations Contacts Address: 119019, Russia, Moscow, Arbat St. 1 E-mail: ir@aeroflot.ru Website: www.aeroflot.ru