Air France-klm Sa · EURONEXT:AF
Air France-klm Sa — Q1 2023 Earnings Presentation
24 slides from Air France-klm Sa's earnings presentation, 2023
Slide 1: Results Q1 2023
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Slide 2: Q1 2023 Highlights
Q1 2023 HIGHLIGHTS Benjamin Smith – Chief Executive Officer Air France-KLM 2
Slide 3: Strong commercial momentum in Q1, with robust cash flow generation
Passengers carried Group revenues STRONG COMMERCIAL +35% MOMENTUM IN Q1, WITH ROBUST 19,651m +42% CASH FLOW GENERATION €6.3bn 14,523m €4.4bn • Revenues up 42% driven by strong and sustainable market demand • Strong Summer sales generated a positive Q1 2022 Q1 2023 Q1 2022 Q1 2023 Adjusted Operating
Slide 4: Q1 2023 Financial Results
Q1 2023 FINANCIAL RESULTS Steven Zaat – Chief Financial Officer Air France-KLM 4
Slide 5: Operating result corrected from furlough schemes improved by €254 million
OPERATING RESULT CORRECTED FROM FURLOUGH SCHEMES IMPROVED BY €254 MILLION Operating result evolution In € m +20.1% Q1 2023 Q1 2022 Change Revenues (€ m) 6,329 4,445 +1,884m +0.7% Operating expenses (€ m) 6,043 4,224 +1,819m Q1 22 operating result published -350 EBITDA (€ m) 286 221 +65m Operating re
Slide 6: Group unit revenue up 20% thanks to a dynamic passenger network business performance
GROUP UNIT REVENUE UP 20% THANKS TO A DYNAMIC PASSENGER NETWORK BUSINESS PERFORMANCE 1 Unit Revenue2 Revenues Operating result Operating Capacity Change Change Change Constant Curr. (€ m) (€ m) margin +17.9% +38.3% 4,903 +64.3% Network -149 +160m -2.7% +5.3 pt 3 +10.7% -34.9% 672 -26.1% Transavia +3
Slide 7: Further acceleration of revenue growth for both airlines
FURTHER ACCELERATION OF REVENUE GROWTH FOR BOTH AIRLINES Capacity Revenues Change Operating Change Operating Change change (€ m) YoY result YoY margin YoY (€ m) +23% 3,924 +46% -181 +182 -4.6% +9 pt +15% 2,522 +32% -128 -131 -5.1% -5 pt +20% 6,329 +42% -306 +44 -4.8% +3 pt • Furlough schemes account
Slide 8: Continued strong yield environment while capacity increased
CONTINUED STRONG YIELD ENVIRONMENT WHILE CAPACITY INCREASED Q1 2023 vs Q1 2022 Total Long Haul Short & Medium Haul1 Transavia Total 81% 91% 86% 86% 38.5% 19.8% 11.8 pt 18.1% 23.3% 13.7 pt 19.2% 11.6 pt 11.8% 10.9 pt 18.7% 1 1 1 1 -6.8% North America Caribbean & Indian Ocean Asia & Middle East 82% 90
Slide 9: Positive adjusted operating free cash flow driven by strong summer ticket sales
POSITIVE ADJUSTED OPERATING FREE CASH FLOW DRIVEN BY STRONG SUMMER TICKET SALES Q1 2023 Free cash flow evolution Net debt Solid Cash at hand In € m In € m €9.7bn at end March Continued deleveraging Net debt/EBITDA 1.8x 1.5x 6,337 -902 December 2022 March 2023 +1,470 +181 -138 5,478 902 -648 683 -219
Slide 10: Air France-KLM is now relieved from State aid support and related restrictions
AIR FRANCE-KLM IS NOW RELIEVED FROM STATE AID SUPPORT AND RELATED RESTRICTIONS January 2023 Successful issuance of Sustainability-Linked Bonds, for a total aggregate amount of €1.0bn March 2023 3.6 Full redemption of the outstanding €2.5bn of the PGE1 by using the €1.0bn proceeds of the Sustainabili
Slide 11: Outlook
OUTLOOK Steven Zaat – Chief Financial Officer Air France-KLM 11
Slide 12: Full year 2023 capacity outlook
FULL YEAR 2023 CAPACITY OUTLOOK Capacity in ASK versus 2019 Q1 2023 Q2 Q3 Q4 FY 2023 Total network 89% c.90% c.90% c.95% 90-95% Long Haul 91% c.90% c.90% c.95% 90-95% Short and 79% 80-85% c.90% 90-95% 85-90% medium Haul Transavia 131% 120-125% c.130% >135% c.135% AF-KLM 92% 90-95% c.95% >95% c.95% G
Slide 13: Forward booking ahead of last year in a very strong yield environment
FORWARD BOOKING AHEAD OF LAST YEAR IN A VERY STRONG YIELD ENVIRONMENT Long Haul Short and Medium Haul Transavia 75% 76% 71% 76% Q2 63% 67% 2022 2023 2022 2023 2022 2023 Q3 39% 39% 25% 29% 41% 45% 2022 2023 2022 2023 2022 2023 Forward booking load factor 2022 Forward booking load factor 2023 Snapshot
Slide 14: The fuel hedging policy remains unchanged and covers more than 60% of 2023 fuel consumption
THE FUEL HEDGING POLICY REMAINS UNCHANGED AND COVERS MORE THAN 60% OF 2023 FUEL CONSUMPTION 7.5 7.3 Fuel bill after hedge ($bn) FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Market 99 82 81 79 78 80 77 76 Brent ($ per bbl) price Jet fuel ($ per metric ton) 1,166 1,035 841 817 819 8
Slide 15: Outlook 2023
OUTLOOK 2023 Q2 2023 FY 2023 Group Capacity¹ 90-95% c.95% Unit cost2 vs. 2022 Stable Net Capex €3.0bn 1) ASK capacity versus 2019 2) Against a constant fuel price, constant currency and excluding furlough contribution 15
Slide 16: Update & Outlook
UPDATE & OUTLOOK Benjamin Smith – Chief Executive Officer Air France-KLM 16
Slide 17: Optimized and diversified network to seize market opportunities and drive our summer performance
OPTIMIZED AND DIVERSIFIED NETWORK TO SEIZE MARKET OPPORTUNITIES AND DRIVE OUR SUMMER PERFORMANCE Summer 2023 Capacity & Destinations overview Air France-KLM Group, capacity ASKs North America: Opening of Ottawa and extension of daily Newark Asia: Continuation of capacity recovery Africa : Opening of
Slide 18: Premium strategy and positioning tailored to fit high yield market demand
PREMIUM STRATEGY AND POSITIONING TAILORED TO FIT HIGH YIELD MARKET DEMAND Capacity evolution Booking Load Factor evolution Air France-KLM long haul network, S23 vs. S22 (index) Air France-KLM long haul network, S23 vs. S22 (difference), at same snapshot date1 143 +5 1.7% non-Economy seats share incr
Slide 19: Conclusion
CONCLUSION What we have achieved this quarter What is ahead Exit of all State aid, releasing the Group from associated restrictions Continued deleveraging, at 1.5x at the end of March, compared to 1.8x end of 2022 Further balance sheet consolidation through non Restoring our Successful closing of se
Slide 20: Appendix
APPENDIX Results as of March 31st, 2023 20
Slide 21: Strong yields environment while capacity recovers
STRONG YIELDS ENVIRONMENT WHILE CAPACITY RECOVERS Q1 2023 vs Q1 2019 Total Long Haul Short & Medium Haul1 Transavia Total 91% 86% 81% 30.6% 86% 16.6% 21.5% 20.5% 27.2% 1 1 1 1 -1,1 pt -0.6 pt -0,7 pt -8.9% -20.7% -7.9% -0.7 pt Premium1 North America Caribbean & Indian Ocean Asia & Middle East 74% 82
Slide 22: Currency impact on operating result
CURRENCY IMPACT ON OPERATING RESULT Currency impact on revenues and costs In € m -20 76 Revenues and costs per currency 56 FY 2022 REVENUES COSTS Category 1 Category 2 US dollar (and related US dollar Q1 2023 currencies) 20 35 Currency impact on revenues 60 20 65 Currency impact on costs, including
Slide 23: Debt redemption profile at 31 March 2023
DEBT REDEMPTION PROFILE AT 31 MARCH 2023 Debt reimbursement profile(1) In €m 500 500 800 750 2,100 650 600 700 750 550 500 2023 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.
Slide 24: Air France KLM Group
AIRFRANCE KLM GROUP