Icelandair Group Hf · OMXICE:ICEAIR
Icelandair Group Hf — Q4 2022 Earnings Presentation
26 slides from Icelandair Group Hf's earnings presentation, Feb 3, 2023
Slide 1: Q4 and 12M 2022 results
Q4 and 12M 2022 results 3 February 2023 1
Slide 2: 2022 a turnaround year for Icelandair
2022 a turnaround year for Icelandair +116% +$130m +150% -17% +14 ppt +46% +25 ppt Income EBT Passengers CO2 / OTK Load factor FTEs1 EBIT % 2022: $1,265m 2022: $0.2m 2023: 3.7m 2022: 0.77 2022: 79.7% 2023: 3,045 2022: 1.5% 2021: $584m 2021: -$130m 2021: 1.5m 2021: 0.93 2021: 65.3% 2021: 2,087 2021:
Slide 3: Highlights Q4 2022
Highlights Q4 2022 Significant Healthy Route network EBIT margin EBIT balance capacity 95% guidance for improvement sheet of 2019 levels 2023 ~4-6% EBIT USD -16 million improving Total liquidity at USD 318 million 816k passengers, 50% more Highest no of destinations, by USD 19 million y-o-y than las
Slide 4: Route Network and cargo activity at similar level as pre-Covid
Route Network and cargo activity at similar level as pre-Covid - CO2 emissions significantly lower Main KPI‘s Passenger mix Freight ton kilometers Sold block hours CO2 emissions As % of 2019 Thousands FTK ´000 Leasing operation Per OTK* within +17% to -17% -18% 99% from 39,774 3,918 0.94 95% +50% vi
Slide 5: Financials
Financials Ívar S Kristinsson, CFO 5
Slide 6: Strong passenger revenue generation driving USD 19 million EBIT improvement
Strong passenger revenue generation driving USD 19 million EBIT improvement year-on-year Negative EBIT effect of extreme weather crisis in December estimated at USD 7 million Profit loss statement EBIT USD million USD million USD million Q4 2022 Q4 2021 Change Transport revenue 255.3 156.5 98.8 • St
Slide 7: Higher salary cost Year-On-Year driven by larger scale of business
Higher salary cost Year-On-Year driven by larger scale of business Salary and related cost Average no of FTEs1 USD million +16.5 +25% Several factors impacting salary cost development Y-o-Y 83.8 3,050 • Salary cost Y-o-Y increasing on more production 67.3 2,444 • Significant improvement in salary co
Slide 8: High fuel prices and more production driving higher fuel cost
High fuel prices and more production driving higher fuel cost Average fuel market price in 47% higher than in Q4 2021 Fuel cost Main changes in fuel cost Hedge contracts and ratios Fuel price USD million USD million Overview ton (Hedge %, Strike Price $/mt) USD per metric ton Market price 131 4 Effe
Slide 9: Unit revenue developing positively
RASK1 CASK2 US Cents US Cents Unit revenue developing 2% positively 8.7 8.8 13% year-on-year 7.8 1.7 2.5 6.9 Unit cost excluding fuel down by 9% 7.0 6.3 RASK Fuel CASK CASK ex fuel Q4 2021 Q4 2022 Q4 2021 Q4 2022 9 1RASK: Revenue per Available Seat Kilometer, 2CASK: Cost per Available Seat Kilometer
Slide 10: 2022 a turnaround year for Icelandair
2022 a turnaround year for Icelandair Flexible business model used to rapidly increase capacity to meet demand recovery in all markets Icelandair consolidated 2022 EBIT per operating segment • Significant EBIT improvement of USD 155 million y-o-y USD million 12M 2022 12M 2021 Change +154.8 • Strong
Slide 11: Total liquidity USD 318 million at year-end 2022
Total liquidity USD 318 million at year-end 2022 Cash and marketable securities decreased by USD 55 million during the quarter Total liquidity Liquidity development Breakdown in USD million Q4 2022 in USD million -55 435 34 120 373 62 318 52 52 27 318 42 58 Government guaranteed credit facility 315
Slide 12: Healthy balance sheet with equity at USD 273 million and equity ratio at 19%
Healthy balance sheet with equity at USD 273 million and equity ratio at 19% Assets Equity ratio Financial liabilities1 Net financial liabilities2 USD million USD million USD million Non-current assets Equity ratio excl. warrants Interest bearing debt Current assets Equity ratio Lease liabilities 1.
Slide 13: Key takeaways and outlook
Key takeaways and outlook Bogi Nils Bogason, CEO 13
Slide 14: Icelandair has gone through a challenging few years
Icelandair has gone through a challenging few years 2018 2019 2020 2021 2022 ASKm Unsustainable Max Covid & Ramp-up Back to competition grounding hiatus starts “normal” operation 2,200 2,000 Peak month 2022 1,800 82% of 2019 1,600 H1 H2 progressing turnaround 1,400 with successful slowly ramp up 1,2
Slide 15: Icelandair has not let the challenging years go to waste and used the time well
Icelandair has not let the challenging years go to waste and used the time well to strengthen the foundation of the Company 15
Slide 16: Icelandair has simplified and streamlined its business
Icelandair has simplified and streamlined its business Shift of focus from conglomerate in the tourism industry to aviation Icelandair 2018 Icelandair 2022 Focus on being a small and dynamic airline Integrated in a highly competitive market Integrated merged merged divested merged divested divested
Slide 17: Icelandair has broadened and diversified the shareholder base
Icelandair has broadened and diversified the shareholder base 99.9% of shareholdings owned by Icelanders in 2018 Total Total Number of shareholdings 2018 shareholdings 2023 shareholders 100% Iceland 15,598 26% Other 13,508 countries Dec Feb 2018 2023 74% 3,017 Iceland Dec 2018 Dec 2020 Feb 2023 17
Slide 18: Icelandair has invested USD 720 million in fleet
Fleet composition 2018-2023 Icelandair has Av. age Av. age invested USD 720 of fleet of fleet 20 years 13 years million in fleet renewal in the international 35 passenger 33 33 31 3 4 4 network since 2018 28 26 3 4 12 4 Older aircraft 12 phased out for 26 23 18 13 more fuel efficient 20 B767 B757 an
Slide 19: Two Boeing 767 freighter aircraft added and service across the North Atlantic expanded
Two Boeing 767 freighter aircraft added and service across the North Atlantic expanded Los Angeles, Chicago, New York and Liege the main freighter destinations 19
Slide 20: Focus on economic, social and environmental impact
Focus on economic, social and environmental impact Positively contributing to Gender equality improvement Icelandair on track towards work and economic growth pilots, cabin crew, management 2030 target of CO2/OTK2 No of No of tourists1 Female Male Female FTEs to Iceland ´000 pilots cabin crew exco -
Slide 21: Largest flight schedule in the history of Icelandair in 2023
Largest flight schedule1 in the history of Icelandair in 2023 54 destinations N-America, and Europe 785 connections Within the network and countless through partnerships 5 new network destinations Detroit, Prague, Barcelona, Tel Aviv, Crete 950 departures per week Peak week August 21 1In terms of fr
Slide 22: High frequency and diverse departure times
High frequency and diverse departure times Three connection banks provide additional product diversity Europe N-America Greenland Domestic London 14 Paris 24 Rome 4 Boston Denver Nuuk Akureyri 21 11 5 27 LHR CDG FCO BOS DEN GOH AEY London 7 Berlin 10 Milan 6 New York Seattle Ilulissat Egilsstaðir 17
Slide 23: Outlook
Outlook Cargo and Leasing • Continued development of airfreight hub in Keflavik • Favourable outlook for leasing operations Route Network • Booking patterns gradually returning to normal • All markets are performing well with N-America showing significant strength • Record sales for the month of Jan
Slide 24: Full-year outlook for 2023
Full- year EBIT margin 4% - 6% outlook Net capex USDm 95 - 115 for 2023 Capacity chg. 15% - 20% Av. fuel m/t USD 950 Av. EUA per unit EUR 90 Av. USD/ISK 136 24 Capex: Capital expenditures, ASK: Available Seat Kilometers, RASK: Revenue per ASK, CASK: Cost per ASK, m/t: metric ton, EUA: European Unit
Slide 25: Q&A
Q&A 25
Slide 26: Disclaimer
Disclaimer | This material has been prepared by Icelandair Group hf. Unless stated otherwise all information is sourced by Icelandair Group hf. | The circulation of the information contained within this document may be restricted in some jurisdictions. It is the responsibility of the individual to c