Air France-klm Sa · EURONEXT:AF
Air France-klm Sa — Q3 2024 Earnings Presentation
29 slides from Air France-klm Sa's earnings presentation, 2024
Slide 1: Q3 2024 Results
Q3 2024 RESULTS
Slide 2: Q3 2024 Highlights
Q3 2024 HIGHLIGHTS Benjamin Smith – Chief Executive Officer Air France-KLM 2
Slide 3: Q3 Results Highlights
Passengers carried Group revenues Q3 RESULTS HIGHLIGHTS +4% +4% • Operating result stood at €1.2bn, stable compared 27.9m €8.7bn €9.0bn 26.9m to last year excluding Olympic Games €160m impact • Group revenue up 4% compared to last year, in sync with capacity development • Broadly stable unit revenue
Slide 4: Summer operational challenges met; transformational efforts remain priority
THIS SUMMER OUR GROUP PUT HARD WORK TO MEET THE OPERATIONAL CHALLENGES. TRANSFORMATIONAL EFFORTS REMAIN PRIORITY • Successfully addressed challenge of • Mixed landscape of summer • Revenue trends reveal significant summer operations and Paris 2024 operations improvements • Transported 1 out of 5 ath
Slide 5: We continue uplifting our customer experience
WE CONTINUE UPLIFTING OUR CUSTOMER EXPERIENCE SAS commercial cooperation is live Even more exclusive La Première Air France and KLM codeshare, luxury ground experience Inauguration of private and confidential journey SkyTeam Alliance and Flying Blue for La Premiere customers at Paris-Charles de Gaul
Slide 6: World's largest SAF purchaser among airlines; securing sourcing
AS THE WORLD’S LARGEST SAF PURCHASER AMONG AIRLINES FOR 2 1 CONSECUTIVE YEARS, WE CONTINUE TO SECURE OUR SOURCING Signature of a SAF offtake agreement with TotalEnergies, for the supply of up to 1.5 million tons of SAF over 10 years, increasing the Group’s planned direct contribution to its’ homebas
Slide 7: KLM's 'Back on Track' targets €450M EBIT improvement
KLM'S 'BACK ON TRACK' TARGETS €450M SHORT-TERM EBIT IMPROVEMENT AND EBIT MARGIN ABOVE 8% BY 2026-2028 Increase productivity 1 • Improve labor productivity in 2025 by 5%, saving €200M • Focus and advancement on structural improvement projects • To be included in collective labor agreement discussion
Slide 8: Q3 2024 Financial Results
Q3 2024 FINANCIAL RESULTS Steven Zaat – Chief Financial Officer Air France-KLM 8
Slide 9: Underlying unit revenue trend favorable; unfavorable unit cost at KLM
UNDERLYING UNIT REVENUE TREND FAVORABLE UNFAVORABLE UNIT COST DEVELOPMENT AT KLM Operating result evolution Unit cost1 evolution per airline In €m Air France-KLM: +3.4% (€230m) ➢ Air France Group: -0.4% ➢ KLM Group: +8.4% Q3 2024 Q3 2023 Change 1,342 100 Revenues (€ m) 8,979 8,660 +3.7% 113 15 1,180
Slide 10: Revenue growth in line with capacity; Transavia and cargo rebound
REVENUE GROWTH IN LINE WITH CAPACITY DEPLOYMENT TRANSAVIA WELL ORIENTED & CARGO REBOUND Unit Revenue2 Revenues Operating result Operating Q3 2024 vs Q3 2023 Capacity 1 Change Change Change Constant Curr. (€ m) (€ m) margin +3.4% -1.8% 6,783 +2.1% Network 899 -192m 12.2% -2.9 pt +1.5% +6.3% 561 +0.6%
Slide 11: Operating result impacted by cost pressure at KLM and Olympic Games
OPERATING RESULT IMPACTED BY STRONG COST PRESSURE AT KLM AND BY THE OLYMPIC GAMES AT AIR FRANCE 2 2 2 Q3 2024 vs Q3 2023 Capacity Revenues Change Operating Change Operating Change change (€ m) YoY result YoY margin YoY (€ m) +5.9% 5,543 +3.1% 732 -74 13.2% -1.8 pt +0.2% 3,549 +3.6% 396 -143 11.1% -4
Slide 12: Robust underlying yield development
ROBUST UNDERLYING YIELD DEVELOPMENT Q3 2024 vs Q3 2023 Total Long-Haul Short & Medium-Haul1 Transavia Total 90% 85% 90% 89% +1.5% -0.5% +1.5% +10.1% 4.0% 3.6% 4.5% 6.8% 1.0% 0.6 pt 0.5% -0.5 pt -2.8% -0.5 pt -0.6% -1.5 pt Premium1 North America Caribbean & Indian Ocean Asia & Middle East 76% 90% 88%
Slide 13: 9M: Leverage ratio in line with ambition
9M: LEVERAGE RATIO IN LINE WITH AMBITION 9m 2024 Free cash flow evolution Exceptionals: Solid Cash at hand In € m • €610m one-time payment to the Air at end September 2.0x France flight crew pension fund (CRPN) Leverage ratio • €362m deferred social charges and (Net debt/EBITDA) 1.7x €9.0bn 1.5x wag
Slide 14: Outlook
OUTLOOK Steven Zaat – Chief Financial Officer Air France-KLM 14
Slide 15: Q4 bookings promising as capacity further increases
Q4 BOOKINGS PROMISING AS CAPACITY FURTHER INCREASES Long-Haul Short and Medium-Haul Transavia 76% 77% 64% 65% 67% 68% Q4 2023 2024 2023 2024 2023 2024 Q4 2024 Capacity +1% +5% +5-10% (vs. 2023) Forward booking load factor 2023 Forward booking load factor 2024 Snapshot of the 29th of October 2023 and
Slide 16: Full year unit cost outlook at +3% compared to 2023
FULL YEAR UNIT COST OUTLOOK AT +3% COMPARED TO 2023 2024 Quarterly unit cost1 per ASK evolution Q3 Unit cost • Initial estimation of 2%, including one-time payment of €50m (0.7%) to In % year-over-year Air France staff related to Olympic Games • 1.4% increase compared to guidance: ➢ Difficult operat
Slide 17: 70% hedged for 2024 and 50% for 2025
70% HEDGED FOR 2024 AND 50% FOR 2025 TOTAL FUEL BILL BELOW LAST YEAR WHILE CAPACITY INCREASED 7.7 7.3 Fuel bill after hedge ($bn) FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Market Brent ($ per bbl) 82 82 85 79 74 80 72 72 71 71 price Jet fuel ($ per metric ton) 9
Slide 18: Outlook 2024
OUTLOOK 2024 2024 Group Capacity +4% vs. 2023 Unit cost1 +c.3% (previously: +2%) Net Capex €3bn (previously below €3bn) Due to timing effects 1) At constant fuel price including SAF, constant currency and excluding Emission Trading Scheme cost (ETS) against 2023 18
Slide 19: Update & Outlook
UPDATE & OUTLOOK Benjamin Smith – Chief Executive Officer Air France-KLM 19
Slide 20: Proposed increase of flight tax in France would impact profitability
PROPOSED INCREASE OF THE FLIGHT TAX IN FRANCE WOULD IMPACT THE GROUP’S PROFITABILITY AND COMPETITIVENESS Currently discussed in the French Parliament for the 2025 budget, the aviation tax (“TSBA”) increase on all flights departing from France could result in a negative impact on key strategic domain
Slide 21: Strengthening the position on main markets
AIR FRANCE-KLM CONTINUE STRENGTHENING THE POSITION ON ITS’ MAIN MARKETS Winter 24/25 Season Capacity & Destinations Air France-KLM Group, capacity in ASKs Asia: opening of Manila, ongoing capacity recovery South America: opening of Salvador de Bahia Africa: opening of Kilimanjaro European Network1 C
Slide 22: To conclude
TO CONCLUDE Successful operational contribution to Paris 2024 • Showcase our sense of service and operational expertise • Remarkable contribution of our employees to shine the light on France globally • Long-lasting positive effect Our strategic priorities deliver great achievements • Operational an
Slide 23: Appendix
APPENDIX 23
Slide 24: 9M 2024 Results
9M 2024 RESULTS Operating result evolution In € m 1,7 9 1 9 77 9m 2024 9m 2023 Change -200 1,204 Revenues (€ m) 23,582 22,612 +4.3% -582 -29 Operating expenses (€ m) 20,341 19,005 +7.0% EBITDA (€ m) 3,241 3,607 -366 Operating result (€ m) 1,204 1,769 -565 Operating margin 5.1% 7.8% -2.7 pt Net incom
Slide 25: 9M 2024 Businesses Contribution
9M 2024 BUSINESSES CONTRIBUTION 1 Unit Revenue2 Revenues Operating result Operating 9m 2024 vs 9m 2023 Capacity Constant Curr. (€ m) Change (€ m) Change margin Change +3.3% -0.2% 17,959 +2.9% Network 990 -644m 5.0% -3.4 pt 3 +2.1% -9.6% 1,669 -9.2% Transavia +8.7% +5.3% 2,424 +15.2% 86 +70m 3.6 % +2
Slide 26: 9M 2024 Airline and Flying Blue Results
9M 2024 AIRLINE AND FLYING BLUE RESULTS 9m 2024 vs 9m 2023 Capacity Revenues Change 2 Operating Change 2 Operating Change 2 change (€ m) YoY result YoY margin YoY (€ m) +5.0% 14,377 +2.9% 678 -429 4.7% -3.2 pt +2.7% 9,553 +5.5% 365 -303 3.8% -3.6 pt 1 604 156 +156 25.8% +4.1% 23,582 +4.3% 1,204 -565
Slide 27: Currency Impact on Operating Result
CURRENCY IMPACT ON OPERATING RESULT Currency impact on revenues and costs In € m -33 25 Revenues and costs per currency FY 2023 -7 REVENUES COSTS US dollar (and related US dollar Q3 2024 currencies) 30 35 Currency impact on revenues 50 65 20 Currency impact on costs, including hedging Euro Other Oth
Slide 28: Debt Redemption Profile at 30 September 2024
DEBT REDEMPTION PROFILE AT 30 SEPTEMBER 2024 Debt reimbursement profile(1) In €m 650 500 2,600 500 400 500 800 650 600 400 450 2024 2025 2026 2027 2028 2029 and beyond Bonds issued by Air France-KLM Other long-term Debt: AF and KLM Sustainability-Linked Bonds Secured Debt, mainly “Asset-backed” 202
Slide 29: Investor Relations department
Investor Relations department Michiel Klinkers Marouane Mami Michiel.klinkers@airfranceklm.com Marouane.mami@airfranceklm.com