International Consolidated Airlines Group Sa · LSE:IAG
International Consolidated Airlines Group Sa — Q3 2020 Earnings Presentation
22 slides from International Consolidated Airlines Group Sa's earnings presentation, Oct 31, 2020
Slide 1: IAG results presentation Quarter Three 2020
IAG results presentation Quarter Three 2020 30 October 2020
Slide 2: Highlights
Highlights Luis Gallego, Chief Executive Officer
Slide 3: A quarter of significant structural change
A quarter of significant structural change 3Q 2020 strategic and financial highlights • Successful Capital Increase provides IAG with the operational and strategic flexibility to take advantage of a recovery in demand for air travel, reduces balance sheet leverage and enhances liquidity to help with
Slide 4: Financial results
Financial results Steve Gunning, Chief Financial Officer
Slide 5: Continued losses due to COVID-19
Continued losses due to COVID-19 Pre exceptional operating results, 3Q 2020 and 9M 2020 3Q 2020 3Q 2019 vly 9M 2020 9M 2019 vly Passenger revenue 737 6,492 -88.6% 4,888 17,078 -71.4% Cargo revenue 302 269 +12.3% 917 825 +11.2% Other revenue 200 505 -60.4% 760 1,389 -45.3% Total revenue 1,239 7,266 -
Slide 6: Exceptional charge of €618m for the quarter
Exceptional charge of €618m for the quarter Exceptional items, 3Q 2020 and 9M 2020 • Net ‘over-hedging’ loss of €352m • A fuel ‘over-hedging’ loss of €330m based on forward jet fuel prices and foreign currency rates as of the end of September • Negative impact from a slower capacity ramp up • Negati
Slide 7: Balance sheet and liquidity improved by €2.7bn Capital Increase
Balance sheet and liquidity improved by €2.7bn Capital Increase Leverage and cash liquidity Pro-forma post €m 30 Sep 2020* 30 Jun 2020 31 Mar 2020 31 Dec 2019 Capital Increase* Gross debt 16,107 16,107 16,479 14,453 14,254 Cash, cash equivalents and interest-bearing 7,752 5,011 6,016 6,945 6,683 dep
Slide 8: Liquidity remains strong
Liquidity remains strong Liquidity position Management actions In 1Q and 2Q • $1.38bn British Airways RCF extended in March • €337m final dividend for 2019 cancelled in April €9.5bn €9.3bn €8.6bn • £0.3bn UK CCFF drawn in April €8.1bn • €1.0bn of term loans 70% guaranteed by the ICO in Spain 2.5 2.7
Slide 9: Cash operating costs more than halved
Cash operating costs more than halved Management actions 3Q Actual operating cash costs per week – 3Q Continuing management actions €450m • 3Q operating cash costs the same as 1) Reducing fixed cost base 2Q despite passenger capacity being • Restructuring and right-sizing benefits c.5x higher (-78.6
Slide 10: Significant savings from employee restructuring at Aer Lingus and BA
Significant savings from employee restructuring at Aer Lingus and BA Employee restructuring initiatives Airline Initiatives • Benefit from Ireland’s furlough scheme (CTWSS) since April • Hours and pay cuts for all staff from April 2020 – 50% cut applying to majority of employees • 590 short-term con
Slide 11: Spanish ERTE allows airlines to better match employee costs with capacity
Spanish ERTE allows airlines to better match employee costs with capacity Employee restructuring initiatives Airline Initiatives • Has benefited from Spain’s furlough scheme, ERTE Force Majeure, which is currently due to end in January 2021 – monthly benefit of c.€25m since April • 10-45% pay cut fo
Slide 12: Outlook
Outlook Luis Gallego, Chief Executive Officer
Slide 13: Infection rates driving increased government restrictions
Infection rates driving increased government restrictions Weighted COVID-19 case rate (July-October 2020) 01-Sep 21-Sep Barcelona limits on Madrid imposes new social gathering and restrictions on mobility in capacity restrictions several districts England, UK PM Johnson announces additional 350 regu
Slide 14: IAG's home markets among the most restrictive in Europe
IAG’s home markets among the most restrictive in Europe Degrees of restriction by market: inbound and outbound Spain UK Ireland Restrictions on travel to Spain Restrictions on travel to UK Restrictions on travel to Ireland Restrictions to travel abroad from Spain Restrictions to travel abroad from U
Slide 15: Demand reacts positively when restrictions are removed
d20-h05 d20-h08 d20-h10 d20-h12 d20-h14 d20-h16 20-Oct d20-h18 d20-h20 d20-h22 d21-h00 d21-h06 d21-h08 d21-h10 d21-h12 Quarantine Quarantine d21-h14 21-Oct d21-h16 d21-h18 d21-h20 d21-h22 d22-h07 d22-h09 d22-h11 d22-h13 d22-h15 22-Oct d22-h17 *Note: includes Las Palmas, Tenerife and Lanzarote d22-h1
Slide 16: Slower resumption in capacity in response to flat demand
Slower resumption in capacity in response to flat demand 2020 current capacity planning scenario (absolute 2020 and proportion of 2019 ASKs) Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20Xto Dec-20 30,000 101.4% 25,000 102.9% 20,000 66.5% 15,000 10,000 24.5% 25.3% 14.8% 5,000
Slide 17: IAG Management Committee
IAG Management Committee Marco Sansavini Steve Gunning Luis Gallego Lynne Embleton Javier Sánchez-Prieto Vueling CEO IAG CFO IAG CEO IAG Cargo CEO Iberia CEO Sean Doyle Dónal Moriarty British Airways CEO Aer Lingus Interim CEO John Gibbs Fernando Candela IAG CIO IAG Chief Transformation Officer Chri
Slide 18: Set to emerge from COVID-19 in a strong position
Set to emerge from COVID-19 in a strong position • IAG’s strength has enabled us to cope with COVID-19 so far: • Strong position both strategically and financially going into the COVID-19 crisis • Quick and decisive actions to mitigate the negative impacts, bolster liquidity and protect our long ter
Slide 19: Appendices
Appendices IAG INTERNATIONAL, ROUP
Slide 20: 3Q 2020 and YTD 2020 traffic and capacity statistics
3Q 2020 and YTD 2020 traffic and capacity statistics Group performance Quarter Year to date Q3 2020 Q3 2019 vLY 2020 2019 vLY Passengers carried ('000s) 6,592 34,562 -80.9% 26,977 90,448 -70.2% Domestic (UK & Spain) 3,344 8,067 -58.5% 8,621 21,442 -59.8% Europe 2,810 18,997 -85.2% 12,539 48,309 -74.
Slide 21: 3Q 2020 and YTD 2020 traffic and capacity statistics
3Q 2020 and YTD 2020 traffic and capacity statistics Performance by airline Quarter Year to date Q3 2020 Q3 2019 vLY 2020 2019 vLY Passengers carried ('000s) 238 3,590 -93.4% 1,967 9,041 -78.2% Revenue passenger km (m) 412 7,782 -94.7% 3,827 19,033 -79.9% Available seat km (m) 1,531 8,925 -82.8% 7,6
Slide 22: Disclaimer
Disclaimer 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 they relate to events
International Consolidated Airlines Group — Q3 2020 Earnings Presentation on 6ix