Air France-klm Sa · EURONEXT:AF
Air France-klm Sa — FY2023 Earnings Presentation
33 slides from Air France-klm Sa's earnings presentation, February 2024
Slide 1: Full Year Results 2023
FULL Y CAR RESULIS 2025 AIRFRANCE KLM GROUP
Slide 2: Full Year 2023 Highlights
FULL YEAR 2023 HIGHLIGHTS Benjamin Smith – Chief Executive Officer Air France-KLM 2
Slide 3: In 2023 Air France-KLM achieved new milestones
IN 2023 AIR FRANCE-KLM ACHIEVED NEW MILESTONES 3
Slide 4: Strong set of results
Passengers carried Group revenues STRONG SET OF RESULTS +12% +14% • Revenues up by 14% driven by a strong load 93.6m 83.3m €30.0bn factor, yield and capacity development, despite €26.4bn challenging geopolitical and market conditions • Operating result at €1.7bn, an increase of +44% compared to 2022
Slide 5: Our passenger strategic roadmap is fostering steady results
OUR PASSENGER STRATEGIC ROADMAP IS FOSTERING STEADY RESULTS ZOOM ON ANCILLARIES AND PREMIUM CABINS ANCILLARY REVENUE EVOLUTION1 PREMIUM CABINS LOAD FACTOR EVOLUTION 2019, 2022, 2023, €M 2023 vs. 2019, % 2019 2023 78 2023 €950M 76 74 2022 €800M +28% 72 70 2019 €745M 0 Q1 Q2 Q3 Q4 Since 2019, our anci
Slide 6: We continue to capitalize on our key strategic assets
WE CONTINUE TO CAPITALIZE ON OUR KEY STRATEGIC ASSETS Transavia Air Cargo MRO Strong low-cost contender Top 5 player Worldwide Top-tier full services MRO • Strategic ambition is unfolding as • Revenue above 2019 levels • Introduction of product offering for planned, despite geopolitical tensions A22
Slide 7: FY 2023 Financial Results
FY 2023 FINANCIAL RESULTS Steven Zaat – Chief Financial Officer Air France-KLM 7
Slide 8: FY 2023: A solid improvement compared to 2022
FY 2023: A SOLID IMPROVEMENT COMPARED TO 2022 Revenue Operating result Operating margin Net income €30.0bn +13.7% €1.7bn +43.5% 5.7% +1.2pt €0.9bn +28.3% December 2023 YoY December 2023 YoY December 2023 YoY December 2023 YoY Capacity Revenues Change Operating Change Operating Change FY 2023 vs FY 2
Slide 9: Strong operating result development supported by passenger network activity
STRONG OPERATING RESULT DEVELOPMENT SUPPORTED BY PASSENGER NETWORK ACTIVITY Unit Revenue2 Revenues Operating result Operating FY 2023 vs FY 2022 Capacity 1 Change Change Change Constant Curr. (€ m) (€ m) margin +8.8% +11.6% 23,148 +20.2% Network 1,693 +562m 6.6% +1.6 pt 3 +6.2% -36.8% 2,488 -29.0% T
Slide 10: Further reduction in leverage and solid cash position
FURTHER REDUCTION IN LEVERAGE AND SOLID CASH POSITION Solid Cash at hand - at end December €10.5bn FY 2023 Free cash flow evolution Net debt In € m In € m Continued deleveraging 1.2x Net debt/EBITDA December 2023 3,574 -449 -441 441 -392 Cash flow before Change Net Operating free Payment of Adjusted
Slide 11: Group's equity positive in 2023
GROUP’S EQUITY POSITIVE IN 2023 Air France-KLM IFRS equity €2.3bn €0.5bn -€2.5bn -€3.8bn -€5.4bn Net profit generation €1.7bn¹ Quasi-equity financing: €3.5bn Capital increase and right issue €3.3bn Equity impacted by crisis -€10.4bn 2019 2020 2021 2022 2023 1) 2022 and 2023 net results 11
Slide 12: Q4 2023 Financial Results
Q4 2023 FINANCIAL RESULTS Steven Zaat – Chief Financial Officer Air France-KLM 12
Slide 13: Q4: Operating result impacted by cargo unit revenue, disruptions and geopolitics
Q4: OPERATING RESULT IMPACTED BY CARGO UNIT REVENUE, OPERATIONAL DISRUPTIONS AND GEOPOLITICAL SITUATION Operating result evolution In € m Incidentals: • Disruption costs (€70m) • Geopolitical situation1 (€65m) • Employee share plan non-cash impact (€30m) Q4 2023 Q4 2022 Change Revenues (€ m) 7,407 7
Slide 14: Q4: Unit revenue impacted by lower cargo yield
Q4: UNIT REVENUE IMPACTED BY LOWER CARGO YIELD Unit Revenue2 Revenues Operating result Operating Q4 2023 vs Q4 2022 Capacity 1 Change Change Change Constant Curr. (€ m) (€ m) margin +6.5% +2.6% 5,691 +6.2% Network 60 -178m 0.9% -2.9 pt 3 +5.0% -31.8% 651 -22.9% Transavia +2.9% +3.2% 536 +4.4% -114 -
Slide 15: Q4: Revenues up for both airlines despite geopolitical context
Q4: REVENUES UP FOR BOTH AIRLINES DESPITE THE GEOPOLITICAL CONTEXT AND DISRUPTIONS Capacity Revenues Change Operating Change Operating Change Q4 2023 vs Q4 2022 change (€ m) YoY result YoY margin YoY (€ m) +5% 4,552 +0% -22 -165 -0.5% -3.6 pt +7% 2,993 +9% -18 -16 -0.6% -0.5 pt +6% 7,407 +4% -56 -19
Slide 16: Q4: Continued positive yield on all areas
Q4: CONTINUED POSITIVE YIELD ON ALL AREAS Q4 2023 vs Q4 2022 Total Long-Haul Short & Medium-Haul1 Transavia Total 86% 86% 82% 84% 6.0% 6.7% 4.0% 5.4% 1.3 pt 3.2% 0.9% 2.9% 3.8% -0.6 pt -1.0 pt -0.5 pt Premium1 North America Caribbean & Indian Ocean Asia & Middle East 86% 87% 85% 74% 34.4% 8.9% 7.0%
Slide 17: Unit cost increased low single digit compared to 2022
UNIT COST INCREASED LOW SINGLE DIGIT COMPARED TO 2022 2023 Quarterly unit cost1 per ASK evolution In % year-over-year Q4 incidentals: • Disruption costs (+€70m) 5.6% • Employee shareholding plan impact (+€30m) 3.4% 3.5% 3.5% 0.4% 1.5% 0.7% 2.0% 3.1% Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 1) Against
Slide 18: Outlook
OUTLOOK Steven Zaat – Chief Financial Officer Air France-KLM 18
Slide 19: Passenger network forward booking load factor in line with last year
PASSENGER NETWORK FORWARD BOOKING LOAD FACTOR IN LINE WITH LAST YEAR TRENDS WITH CAPACITY UP Long-Haul Short and Medium-Haul Transavia 85% 85% 75% 76% 81% 80% Q1 2023 2024 2023 2024 2023 2024 Q1 2024 Up 4% Up 3% Up 10% Capacity (vs. 2023) Forward booking load factor 2023 Forward booking load factor
Slide 20: Stable fuel bill despite capacity increase
STABLE FUEL BILL DESPITE CAPACITY INCREASE 7.6 7.7 Fuel bill after hedge ($bn) FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Market Brent ($ per bbl) 82 80 80 78 77 79 price Jet fuel ($ per metric ton) 962 951 916 897 880 910 Jet fuel ($ per metric ton) 964 942 916 902 883 910 Price % of consumpti
Slide 21: Outlook 2024
OUTLOOK 2024 FY 2024 Group Capacity +5% vs. 2023 +1% to 2% Unit cost1 (Q1: +4%) Net Capex €3.0bn-€3.2bn 1) At constant fuel price including SAF, constant currency and excluding Emission Trading Scheme cost (ETS) against 2023 21
Slide 22: Update & Outlook
UPDATE & OUTLOOK Benjamin Smith – Chief Executive Officer Air France-KLM 22
Slide 23: An optimized & diversified network with 300+ destinations
AN OPTIMIZED & DIVERSIFIED NETWORK DRIVING OUR PERFORMANCE AND CAPTURING MARKET OPPORTUNITIES WITH 300+ DESTINATIONS SUMMER 2024 CAPACITY OVERVIEW SUMMER 2024 CAPACITY SPLIT S24 vs. S19, Air France-KLM Group, ASK’s, Number of destinations S24 vs. S19, Air France-KLM Group, ASK’s Short and S24 Medium
Slide 24: Transavia on track to revamp profitability and optimize operations
TRANSAVIA IS ON TRACK TO REVAMP PROFITABILITY AND OPTIMIZE OPERATIONAL PERFORMANCE Finalization Network Design and Optimization Complete REVENUE ACTION PLAN Full Paid Hand Luggage April well in progress with first quick wins and results starting to yield early-2024 Dynamic Pricing Ancillaries Q2 Fly
Slide 25: E&M & Cargo: addressing challenges to enhance performance
E&M & CARGO: WE CONTINUE ADRESSING CHALLENGES TO ENHANCE OUR FINANCIAL AND OPERATIONAL PERFORMANCE ENGINEERING & CARGO MAINTENANCE Supply Chain & OEM Commitment to new gen performance mitigation Air Cargo: A350F fleet Hiring and training Strong customer new staff portfolio Product portfolio Customer
Slide 26: Flying Blue: reinforcing further our loyalty program
FLYING BLUE: REINFORCING FURTHER OUR LOYALTY PROGRAM Evolve Travel proposition • Increase flight active base and engagement • Enhance member benefits and experience Increase Direct revenue • Continue extending partnership network beyond travel • Launch innovative solutions to earn and burn miles • E
Slide 27: Sustainability: securing further our pathway towards 2030
SUSTAINABILITY: SECURING FURTHER OUR PATHWAY TOWARDS 2030 A350, A320neo, A220 2023 2030 Perfect strategic fit for reduction of ~21% New Gen ~80% New Gen Aircraft Unit Cost CO2 Noise Aircraft For the second year in a row, A third of our 2030 SAF the largest SAF user commitment already worldwide1 secu
Slide 28: Conclusion
CONCLUSION Air France-KLM delivered a strong set of results in 2023 • Double-digit growth of revenues, above €30bn, up by 14% • Solid increase of Group’s operating margin, at 5.7% • A consolidated balance sheet, with Group’s equity back to positive and continued deleveraging • Our new gen aircraft o
Slide 29: Appendix
APPENDIX 29
Slide 30: Yield environment vs 2019
YIELD ENVIRONMENT VS 2019 Q4 2023 vs Q4 2019 Total Long Haul Short & Medium Haul1 Transavia Total 46.0% 86% 86% 30.3% 82% 84% 23.0% 22.4% 16.4% -1.5 pt -1.4 pt -2.3 pt -5.0% -8.3% -7.1 pt -16.9% Premium1 North America Caribbean & Indian Ocean Asia & Middle East 86% 87% 85% 74% 18.3% 2.2 pt 34.1% 36.
Slide 31: Currency impact on operating result
CURRENCY IMPACT ON OPERATING RESULT Currency impact on revenues and costs In € m -26 Revenues and costs per currency FY 2023 REVENUES COSTS -157 -183 US dollar (and related US dollar Q4 2023 currencies) 30 35 Currency impact on revenues 50 65 20 Currency impact on costs, including hedging Euro Other
Slide 32: Debt redemption profile at 31 December 2023
DEBT REDEMPTION PROFILE AT 31 DECEMBER 2023 Debt reimbursement profile(1) In €m 500 500 800 750 2,600 650 850 800 600 600 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 33: Investor Relations department
Investor Relations department Michiel Klinkers Marouane Mami Michiel.klinkers@airfranceklm.com Marouane.mami@airfranceklm.com