Slide 1: 3Q24 Results
3Q24 Results November 14, 2024
Slide 2: Disclaimer
Disclaimer The information contained in this presentation is only a summary and does not purport to be complete. This presentation has been prepared solely for informational purposes and should not be construed as financial, legal, tax, accounting, investment or other advice or a recommendation with
Slide 3: Azul's Core Strengths
Azul’s Core Strengths Unparalleled Exceptional Network Customer Service Flexible and fuel-efficient Lowest Fleet Cost Structure High-margin Supportive Business Units Stakeholders Throughout the years, Azul’s core strengths and competitive advantages have remained consistent 3
Slide 4: Sustainable and Strong Business Model
Sustainable and Strong Business Model 2019 2020 2021 2022 2023 2024 Porto Alegre + Strong Strong Floods in Rio Grande do Performance Covid Covid Covid 2.0 Covid 2.0 Ukraine War Ukraine War Recovery Currency Devaluation OEM Issues Sul + Performance devaluation EBITDA R$ 3.6 billion R$0.3 billion R$1.
Slide 5: Record Revenue, EBITDA and EBIT
Record Revenue, EBITDA and EBIT 3Q24 Revenue 3Q24 RASK R$5.1 billion R$42.87 cents All- d or im Q 3 d e Rec R e c or t 3Q24 EBITDA 3Q24 EBIT R$1.7 billion R$1.0 billion 32.2% margin 20.0% margin All - All - d d or or im im e Rec e Rec t t Maintaining positive operational results and industry-leading
Slide 6: Sustainable Capacity Growth While Maintaining Strong RASK
Sustainable Capacity Growth While Maintaining Strong RASK ASK RASK (Billion) (R$ cents) +9.6% 12.0 45.30 +12.2% 11.5 42.61 42.87 11.1 11.1 42.23 10.9 38.22 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 Impacted by Floods Impacted by Floods in Rio Grande do Sul in Rio Grande do Sul Strong recover
Slide 7: Higher Productivity and Lower Costs
Higher Productivity and Lower Costs CASK CASK ex-Fuel (R$ cents) (R$ cents) Flat -2.8% 37.3 23.7 22.8 35.0 22.4 34.3 34.2 34.3 21.6 21.8 3Q23¹ 4Q23¹ 1Q24 2Q24 3Q24 3Q23¹ 4Q23¹ 1Q24 2Q24 3Q24 Exchange R$4.88 R$4.96 R$4.95 R$5.21 R$5.55 Rate Fuel Price R$4.06 R$4.66 R$4.25 R$4.35 R$4.41 Azul CASK belo
Slide 8: Unique Business Model Leading to Superior Operating Results
Unique Business Model Leading to Superior Operating Results EBITDA Fuel Price (R$ billion) (R$ per liter) +6.0% 1.7 1.6 1.5 1.4 +8.6% 4.66 1.1 4.41 4.35 4.25 4.06 3Q23¹ 4Q23¹ 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 Record EBITDA, offsetting effect of higher fuel prices 8 ¹Adjusted for non-recurring
Slide 9: Increasing Cash Contribution From Operations
Increasing Cash Contribution From Operations Immediate Liquidity (R$ billion) +0.2 0.1 -0.7 1.7 -0.2 -0.6 2.7 2.5 -0.1 2.5 2Q24 Immediate 3Q24 Net working Aircraft CAPEX Interest 3Q24 Operating Debt 3Q24 Immediate liquidity EBITDA capital ownership liquidity amortization liquidity Operations consist
Slide 10: Significant Revenue Growth and Margin Expansion
Significant Revenue Growth and Margin Expansion EBITDA (R$ billion) ~7.4 ~6.0 5.2 3.6 3.2 2.6 2.3 1.8 1.2 1.4 1.3 1.6 0.5 0.1 0.2 -0.1 0.3 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2025E Forecasting EBITDA of ~R$6.0 billion in 2024 and ~R$7.4 billion in 2025 10
Slide 11: Recent Challenges
Recent Challenges Foreign Exchange Floods in Rio Grande do Sul OEM Delivery, Performance and Supply Issues Increased Risk Aversion in Local Capital Markets ~R$1.1 billion ~R$400 million ~R$1.3 billion ~R$500 million 2024E Cash Impact 2024E Impact Cumulative Impact, Majority in 2024 Impact to Local D
Slide 12: Continued Support from Supportive Stakeholders
Continued Support from Supportive Stakeholders Lessors and Government Creditors OEMs Lessors and OEMs Creditors providing new New government credit line once again demonstrating capital to Azul as well as (FNAC) dedicated to confidence in Azul cash flow support and civil aviation sector through equi
Slide 13: Comprehensive Transaction Leading to Significant Improvements
Comprehensive Transaction Leading to Significant Improvements Equitization of Additional cash flow Equitization of Lessor / OEM Instrument Capital Raise improvements 2029 and 2030 Notes Firm equitization of Up to US$500 million Collaborative effort to Potential equitization of up to US$550 million f
Slide 14: Transaction Outcome: Pro-Forma Capital Structure
Transaction Outcome: Pro-Forma Capital Structure Pro-forma Capitalization (R$ million) 3Q24 Adjustments 3Q24 Pro-forma Unsecured 2024 and 2026 Notes 556 (380) 176 Secured 2028 Notes 5,268 - 5,268 Secured 2029 and 2030 Notes 4,437 (4,437) - New Superpriority 2029 Notes - 2,725 2,725 Other Secured Deb
Slide 15: Transaction Outcome: Reduction in Leverage
Transaction Outcome: Reduction in Leverage Leverage (Net debt / LTM EBITDA) 4.8x 3.3x 3.4x 1.4x 2.0x 2019 3Q24 3Q24 Pro-forma Loans and Financing Leverage Total Leverage Lease Leverage Organic reduction in leverage from strong operational results, now accelerated by comprehensive transaction 15 Note
Slide 16: Transaction Outcome: Reduction in Gross Debt
Transaction Outcome: Reduction in Gross Debt Gross Debt and Foreign Exchange Rate (R$ million; R$) 5.45 5.45 30,298 4.03 24,929 15,023 2019 3Q24¹ 3Q24 Pro-forma¹ End of period exchange rate Gross debt Agreement with bondholders and lessors/OEMs enabling significant reduction in leverage from equitiz
Slide 17: Transaction Outcome: Reduction in Interest Payment
Transaction Outcome: Reduction in Interest Payment Interest Payment (R$ billion) -R$0.8 R$2.0 R$1.2 2025E 2025E Pre-transaction Post-transaction Comprehensive transaction with potential to reduce interest expense by R$800 million in 2025 17 Note: assumes 100% participation of relevant holders in tra
Slide 18: Transaction Outcome: Increased Cash Generation
Transaction Outcome: Increased Cash Generation High level breakdown 2025E (R$ billion) EBITDA 7.4 Net working capital 0.8 Aircraft ownership (4.1) Capex (1.7) Recurring cash flow 2.3 Interest (1.2) Free cash flow to firm 1.1 Potential improvement of up to R$1 billion in 2025 cash flow 18 Note: assum
Slide 19: Further Opportunities to Expand Margins
Further Opportunities to Expand Margins Margin Expansion Drivers (EBITDA, R$ billion) ~7.4 Transformational Initiatives ~6.0 High growth in business units Fleet transformation and higher utilization Unique network position 2024E 2025E Already identified opportunities leading to continued increase in
Slide 20: Thank you.
Thank you. INVESTOR RELATIONS Contact us +55 11 4831-2880 invest@voeazul.com.br www.voeazul.com.br/ir