Japan Airlines Co., Ltd. · TSE:9201

Japan Airlines — FY2015 Earnings Presentation

30 slides from Japan Airlines's earnings presentation, Apr 28, 2016

  1. Slide 1: Financial Results MAR/2016 (FY2015)

    JAPAN AIRLINES Co., Ltd. Financial Results MAR/2016（FY2015） April 28th, 2016

  2. Slide 2: Contents

    CONTENTS P.1 P.2 P.3 P.5 P.6 P.21

  3. Slide 3: Overview of Mar/2016 Financial Results

    Overview of Mar/2016 Financial Results Operating Revenue Operating Profit （JPY Bn） （JPY Bn） （OP Margin） 1,360 250 20% ▲8.0Bn ＋29.5Bn 1,344.7 （▲0.6%） （+16.4%） 209.1 18% 1,340 1,336.6 200 179.6 16% 15.7% 14% 1,320 150 13.4% 12% 1,300 100 10% Mar/2015 Mar/2016 Mar/2015 Mar/2016 Full-Year Full-Year Full

  4. Slide 4: Dividend for Mar/2016

    Dividend for Mar/2016 Dividend (1) Mar/2016 Mar/2015 Dividend per share for FY3/16 New Announcement on Announcement January 29,2016 FY3/16 Net Income (2) 149.0 JPY Bn 174.4 JPY Bn 172.0 JPY Bn 16.00 JPY 120.00JPY Income Tax-Deferred +1.3 JPY Bn ▲0.4 JPY Bn － increase (+15.4%) Income available for 15

  5. Slide 5: Progress of Management Targets

    Progress of Management Targets Targets Progress Flight Safety Indicator FY3/133 FY3/14 FY3/15 FY3/163 Achieve Zero Aircraft Accidents1 and Aircraft Accidents 1 0 2 1 Serious Incidents2 Serious Incidents 2 1 0 3 Customer Satisfaction Indicator FY3/13 FY3/14 FY3/15 FY3/16 Customer Achieve “No. 1 in Cu

  6. Slide 6: Management Topics

    Management Topics Route Network, Products and Services  Int’l：Boeing 777-200ER revamped with ” JAL SKY SUITE Ⅲ”  JAL Express Tag Service for domestic flights will be introduced at from July 2016 to be introduced on the route in order Sapporo, Osaka, Fukuoka and Okinawa airport following Haneda. To

  7. Slide 7: Mar/2017 Earnings Forecast

    Mar/2017 Earnings Forecast Operating Revenue Operating Profit （JPY Bn） （JPY Bn） （OP Margin） 1,360 220 20% +6.3JPY Bn ▲8.1JPY Bn （+0.5%） 1,343.0 1,340 1,336.6 209.1 （▲3.9%） 201.0 200 15% 15.7% 1,320 15.0% 1,300 180 10% Mar/2016 Mar/2017 Mar/2016 Mar/2017 Results Forecast Results Forecast Operational

  8. Slide 8: Intentionally Left Blank

    INTENTIONALLY LEFT BLANK @ JAPAN AIRLINES

  9. Slide 9: Overview of Consolidated Financial Results

    Overview of Consolidated Financial Results Consolidated Financial Results 4Q (JPY Bn) Mar/2015 Mar/2016 y/y (Jan-Mar) y/y  Operating revenue was Mar/2016 (5) 1,336.6 billion yen, ▲0.6% Operating Revenue 1,344.7 1,336.6 ▲0.6% 313.2 ▲2.8% y/y. Air Transportation Segment 1,196.2 1,205.2 +0.7% 281.9 ▲1

  10. Slide 10: Changes in Operating Profit

    Changes in Operating Profit Mar/2016 Full-Year +29.5Bn (JPY Bn) (+16.4%) Aircraft Impact From Currency Market ▲21.1Bn Depreciation Fuel Maintenance Revenue ＋9.8Bn and Cost ▲30.9Bn ▲7.3 Leases Personnel Fuel ▲20.2Bn Ex. Fuel ▲10.7Bn ▲18.0% ▲1.0 ▲9.7 Other Cost ▲1.1% +54.3 ▲4.1% ASK y/y ： +0.2% ▲22.2

  11. Slide 11: International Passenger Operations (Operating Results)

    International Passenger Operations (Operating Results) International Passenger 4Q(Jan-Mar)  Passenger Revenue was 448.7 Mar/2015 Mar/2016 y/y y/y Mar/2016(1) billion yen, 6.0 billion yen Passenger Revenue (JPY Bn) 454.8 448.7 ▲1.3% 102.7 ▲5.6% declined y/y basis.  ASK was up 1.3% and RPK ASK (MN s

  12. Slide 12: International Passenger Operations (Change in Revenue)

    International Passenger Operations (Change in Revenue) Mar/2016 Full-Year ▲6.0Bn (JPY Bn) (▲1.3%)  Although revenue per passenger declined due to a decrease in fuel 454.8 surcharge, revenue management 448.7 and expansion of JAL SKY SUITE contributed to an increase in L/F ▲21.5 +15.4 and net unit pr

  13. Slide 13: Domestic Passenger Operations (Operating Results)

    Domestic Passenger Operations (Operating Results) Domestic Passenger 4Q (Jan-Mar)  Passenger revenue was Mar/2015 Mar/2016 y/y y/y Mar/2016 (1) 501.2 billion yen, up 2.8% Passenger Revenue y/y. (JPY Bn) 487.5 501.2 +2.8% 117.1 +2.3% ▲1.2% ▲1.6%  ASK was ▲1.2% while ASK (MN seat km) 36,306 35,869 8

  14. Slide 14: Domestic Passenger Operations (Change in Revenue)

    Domestic Passenger Operations (Change in Revenue) Mar/2016 Full-Year (JPY Bn) +13.7Bn  Changes in customer mix through (+2.8%) revenue management 501.2 ・Well-reputed JAL SKY NEXT +7.3 ・Increase of individual passengers 487.5 +6.4  High-yield passenger percentage • Boost demand increased in holiday

  15. Slide 15: Major Operating Expense Items

    Major Operating Expense Items Operating Expenses 4Q  Although increase in some (JPY Bn) Mar/2015 Mar/2016 difference y/y (Jan-Mar) difference y/y cost items due to the weak Mar/2016 (1) yen and service Fuel 282.5 228.1 ▲54.3 ▲19.3% 47.4 ▲12.0 ▲20.2% enhancements, we will maintain cost reduction Lan

  16. Slide 16: Maximizing Profit per ASK

    Maximizing Profit per ASK To build the foundation for stable business operations in the medium and long term and enhance services and products, we will proactively assign resources to human resources and products and services to maximize profit per ASK （JPY） 20 104 105 15 100 12.7 12.9 13.7 12.5 ユニッ

  17. Slide 17: Impact of Fuel and FX Markets

    Impact of Fuel and FX Markets Hedge Ratio of Fuel Costs Transition of Fuel Cost by factors (As of End of FY Mar/2017) 300 100% Market Fuel FX Volume 80% 250 increase / Approx. 282.5 Hedging etc., ▲103.8 60% Approx. 50% FX +29.2 200 40% +20.2 40% 228.1 Approx. Approx. 150 10% 10% Approx. Approx. 20%

  18. Slide 18: Major Balance Sheet Items

    Major Balance Sheet Items Consolidated Balance Sheet Summary as of Mar/2016 End of End of (JPY Bn) difference Mar/2015 Mar/2016  The balance of interest- bearing debt decreased by Total Assets 1,473.3 1,578.9 +105.5 7.9 billion yen to 92.6 billion 420.3 +55.3 yen as a result of Cash and Deposits 36

  19. Slide 19: Major Cash Flow Items (Results)

    Major Cash Flow Items（Results） (JPY Bn) Mar/2015 Mar/2016 Difference Net Income Before Income Taxes and Non-controlling Interests 169.9 207.3 +37.4 Depreciation and Amortization 85.8 88.5 +2.6 Other 5.3 16.4 +11.1 Cash Flow from Operating Activities 261.1 312.3 +51.2 Capital Expenditure (1) ▲198.6 ▲

  20. Slide 20: Intentionally Left Blank

    INTENTIONALLY LEFT BLANK @ JAPAN AIRLINES

  21. Slide 21: Mar/2017 Earnings Forecast (Consolidated)

    Mar/2017 Earnings Forecast (Consolidated) Consolidated Financial Results Operational Preconditions Mar/2016 Mar/2017 Mar/2016 Mar/2017 (JPY Bn) difference y/y Results Forecast Results Forecast Revenue 1,336.6 1,343.0 +6.3 +0.5% ASK* Int’l +1.3% ▲0.6% Int’l Passenger 448.7 450.0 +1.2 +0.3% Doms ▲1.2%

  22. Slide 22: Changes in Operating Profit / Forecast Mar/2017

    Changes in Operating Profit/ Forecast Mar/2017 (JPY Bn) Impact From Currency Market ▲2.5Bn Revenue ＋0Bn Cost ▲2.5Bn ▲8.1Bn ▲2.5Bn Fuel Ex. Fuel ▲0Bn （▲3.9%） +26.1 ▲40.6 +9.9 209.1 +1.2 +1.7 ▲6.5 201.0 Mar/2016 Int’l Domestic Cargo & Mail Other Revenue Fuel Other Cost Mar/2017 Full-Year Passenge Pass

  23. Slide 23: Mar/2017 Earnings Forecast (Consolidated Balance Sheet)

    Mar/2017 Earnings Forecast (Consolidated Balance Sheet) We aim to improve our credit rating, maintain shareholder’s equity ratio of 50% or above, and increase financial stability. Balance Sheet Fundamental Capital Policy End of End of Accumulate retained earnings to （JPY Bn） Mar/2016 Mar/2017 Diff.

  24. Slide 24: Mar/2017 Earnings Forecast (Cash Flow)

    Mar/2017 Earnings Forecast (Cash Flow) Make relevant capital investments based on strict investment discipline. Secure return on investment and maximize Free Cash Flow Cash Flow Use of cash flows（Mar/2017 ） （JPY Bn） 300 Mar/2016 Mar/2017 268.0 243.0 Aircraft Investments (new （JPY Bn） Diff. aircraft

  25. Slide 25: Fly into tomorrow.

    Fly into tomorrow. Finance & Investor Relations, Japan Airlines

  26. Slide 26: Supplemental Reference: International Routes by Geographic Segment

    《Supplemental Reference》 Revenue of International Routes by Geographic segment Passenger Revenue (% of the whole int’l revenue) Passengers Revenue y/y Revenue ratio 4Q(Jan- (%) 4Q(Jan- 4Q(Jan- (‘000) Mar/2015 Mar/2016 y/y Mar) y/y Mar/2016 Mar) Mar/2015 Mar/2016 Mar) Mar/2016 Mar/2016 Mar/2016 Trans

  27. Slide 27: Supplemental Reference: Number of Aircraft

    《Supplemental Reference》 Number of Aircraft Mar/2016 End of Mar/2015 End of Mar/2016 Difference Owned Leased Total Owned Leased Total Boeing 777-200 13 0 13 12 0 12 ▲1 Boeing 777-200ER 11 0 11 11 0 11 - Boeing 777-300 7 0 7 4 0 4 ▲3 Boeing 777-300ER 13 0 13 13 0 13 - Large-sized Total 44 0 44 40 0 4

  28. Slide 28: Earnings Forecast Mar/2017 (International Passenger Operations)

    《Supplemental Reference》 Earnings Forecast Mar/2017（ Air transportation Segment ） International Passenger Operations y/y （%） Mar/2016 Mar/2017 Results Forecast Full-year 1H 2H （Forecast） (Forecast) (Forecast) Passenger Revenue ▲3.3% (JPY Bn) 448.7 450.0 +0.3% +4.4% ASK ▲0.6% ▲0.1% ▲1.0% (MN seat km)

  29. Slide 29: Earnings Forecast Mar/2017 (Domestic Passenger Operations)

    《Supplemental Reference》 Earnings Forecast Mar/2017（ Air transportation Segment ） Domestic Passenger Operations y/y （%） Mar/2016 Mar/2017 Results Forecast Full-year 1H 2H （Forecast） (Forecast) (Forecast) Passenger Revenue ▲0.0% (JPY Bn) 501.2 503.0 +0.3% +0.8% ASK ▲0.0% ▲1.3% (MN seat km) 35,869 35,

  30. Slide 30: Forward-looking statements disclaimer

    This contents contains descriptions of the future expectations, outlooks, objectives and plans etc. of Japan Airlines Co., Ltd. (hereafter "the company") and related Group companies (hereafter "the Group"). These are based on information available at the time when these materials were created by the

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