Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q3 FY2020 Earnings Presentation
37 slides from Japan Airlines's earnings presentation, Feb 1, 2021
Slide 1: Financial Results 3rd Quarter Mar/2021 (FY2020)
JAPAN AIRLINES Co., Ltd. Financial Results 3rd Quarter Mar/2021 (FY2020) February 1, 2021 ©Japan Airlines, ALL rights reserved.
Slide 2: Today's Topics
Today’s Topics PERFORMANCE OVERVIEW OF 3 rd Quarter P.3 FY2020 EARNINGS FORECAST FOR FY2020 P.4 LATEST INITIATIVES P.6 DETAILS OF FINANCIAL RESULTS FOR P.8 3 rd Quarter FY2020 P.15 REFERENCES IFRS is adopted from the fiscal year ending Mar 2021, instead of the previously used Japanese standard. Acco
Slide 3: Financial Results for 3Q of FY2020
Financial Results for 3Q of FY2020 ✓ Large drop in revenue due to the COVID-19 pandemic ✓ Despite the cost reduction efforts, we were unable to cover the decline in revenue and posted a significant loss Revenue(1) EBIT (1)(2)/Profit or Loss (1)(3)/EBIT Margin(1)(4) Profit EBIT （EBIT margin） （JPY Bn）
Slide 4: CFO speaker notes: third quarter results
◼ This is CFO, Kikuyama speaking. ◼ Thank you very much for joining us today. ◼ Today, I will briefly explain our financial results for the third quarter, earnings forecast revision for the current fiscal year, and then, I will touch upon our current initiatives. ◼ Please turn to Page 3. ◼ The third
Slide 5: FY2020 Earnings Forecast
FY2020 Earnings Forecast ✓ Demand Forecast was revised based on the latest booking until fiscal year end ✓ Full-year forecast is EBIT of ▼420 billion yen and net loss of ▼300 billion yen ✓ To secure liquidity at hand and prevention of worsening financial structure, no dividend is forecasted Change i
Slide 6: Speaker notes: revised performance forecast
◼ On this page, I will explain our revised performance forecast of this fiscal year. ◼ Future International and Domestic Passenger demands depend on the rebound of the spread of COVID-19 and restrictions on international travel so that uncertainty remains to persist. ◼ Please look at the graph on th
Slide 7: FY2020 Earnings Forecast Financial Position
FY2020 Earnings Forecast Financial Position (1) ✓ Cash on hand will be 370 billion yen as of the end of March 2021 ✓ Equity Ratio will be 44.3% and D/E Ratio will be 0.5 times End of FY2019 End of FY2020 （JPY Bn） Diff. Results New Forecast Total Assets 1,982.2 2,100.0 +117.7 Cash and Deposits 329.1
Slide 8: Speaker notes: forecasted balance sheet
◼ Then, I will explain our forecasted balance sheet. ◼ Cash on hand will be 370 billion yen as of the end of March 2021. Equity Ratio will be 44.3% and D/E Ratio will be 0.5 times. In spite of the difficult circumstances, we are able to maintain strong financial structure. ◼ Please turn to Page 6. ©
Slide 9: Cost and CAPEX Reduction Initiatives
Cost and CAPEX Reduction Initiatives Cost Reduction CAPEX Reduction Fixed Cost 90 billion yen reduction from the initial plan is estimated as the previous forecast ◼ Further reduction of over 120 billion yen is estimated from the original plan (102 billion yen 【FY20 CAPEX】 reduction has been achieve
Slide 10: Speaker notes: cost and CAPEX reduction
◼ On this page, I will explain cost and CAPEX reduction. ◼ Our fixed cost reduction target as of Q2 financial report was 100 billion yen from the original plan. However, due to our utmost efforts, we estimate further 20 billion yen or even more can be reduced. ◼ As a result, fixed cost will be reduc
Slide 11: Bolstering Liquidity
Bolstering Liquidity ✓ Liquidity at hand as of the end of Dec is more than 750 billion yen, including unused credit line ✓ Cash burn is steadily decreasing until Q3. In Q4, it will remain around the half of the Q1 level because of cash outflow reduction efforts despite the uneasy situation Cash Bala
Slide 12: Speaker notes: liquidity and cash burn
◼ On this page, I will explain liquidity at hand and cash burn. ◼ Cash on hand at the end of December was 454.9 billion yen. Together with the unused credit line of 300 billion yen, our liquidity at hand is more than 750 billion yen, which is sufficient. ◼ Cash burn decreased to just about 10 to 15
Slide 13: Financial Results (Details)
FINANCIAL RESULTS (DETAILS) ©Japan Airlines, ALL rights reserved. 8
Slide 14: Speaker notes: third quarter performance details
◼ From now, I will explain the details of our third quarter performance. ◼ On Page 9, our consolidated financial results are shown. ◼ Please turn to Page10. ©Japan Airlines, ALL rights reserved. 8-S
Slide 15: Consolidated Financial Results for 3Q FY2020 (1)
Consolidated Financial Results for 3Q FY2020 (1) 3Q 3Q 3 rd quarter （JPY Bn） Diff. y/y Diff. y/y FY2019 FY2020 FY2020(6) Revenue 1,112.7 356.5 ▼756.1 ▼68.0% 161.7 ▼202.0 ▼55.5％ International Passenger 401.3 18.8 ▼382.4 ▼95.3% 9.6 ▼118.7 ▼92.5％ Domestic Passenger 427.9 136.9 ▼291.0 ▼68.0% 67.3 ▼74.8
Slide 16: Intentionally Left Blank
INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 17: Changes in EBIT (Revenues/Expenses)
Changes in EBIT (Revenues／Expenses) (1) (2) ASK y/y： ▼66.8% ＋ stands for profit increase (revenue increase, cost decrease) ▼ stands for profit decrease (revenue decrease, cost increase) RPK y/y： ▼84.8％ （JPY Bn） ▼ 408.8 114.6 3rd Quarter Int’l FY2019 Passenger ▼382.4 ▼294.1 Other Others(4) Expenses ▼
Slide 18: Speaker notes: changes in EBIT
◼ On this page, Ups and Downs of EBIT is shown. ◼ For revenue, a large drop in demand caused by COVID-19 let a large decrease in International Passenger and Domestic Passenger. ◼ On the other hand, Cargo and Mail revenue increased by 31.5% year-on- year even with the limited capacity. ◼ For expense,
Slide 19: Int'l/Domestic Passenger Operations (Full Service Carrier)
Int’l/Domestic Passenger Operations (Full Service Carrier) ✓ Significant reduction in the international passenger demand continues ✓ Domestic passenger demand was on recovery and GoTo Travel promotional campaign increased group tour passengers while revenue per passenger dropped due to demand mix In
Slide 20: Speaker notes: international and domestic passenger
◼ I will update International Passenger and Domestic Passenger on this page. ◼ Due to travel restrictions, Passenger Number decreased by 96.6% year on year in International Passenger. Revenue per Passenger increased largely by 39.3% year on year. ◼ Domestic travel had been on the rise, thanks to inc
Slide 21: Cargo / Mail
Cargo / Mail ✓ Demand was captured as much as possible to increase revenue significantly (yoy+31.5%) in spite of the limited passenger flights. ✓ Cargo flights utilizing passenger aircrafts totaled at 11,378 from Apr to Dec 2020. ✓ Large-lot cargo demand was captured by chartered freighter flights.
Slide 22: Speaker notes: cargo and mail
◼ I will explain Cargo and Mail on this page. ◼ Even though passenger flight capacity is limited, we maximized revenue through operating a large number of cargo flights utilizing passenger aircrafts. Also, we chartered cargo freighters to carry large-lot cargo. ◼ Unit Price is still at a very high l
Slide 23: Major Operating Expense Items
Major Operating Expense Items (1) ✓ Reduced revenue- and capacity-linked costs, equivalent of approximately 40% of reduced revenue (298.8 Bn JPY) ✓ Fixed cost is steadily reduced by 102 billion yen from the original plan（Details on P.6) 3rd 3Q 3Q （JPY Bn） Diff. y/y quarter Diff. y/y FY2019 FY2020 FY
Slide 24: Speaker notes: major operating expense items
◼ This page explains major operating expense items with the categorization of revenue- and capacity-linked costs and fixed costs. ◼ Revenue- and capacity-linked costs steadily decreased by about 40% of decreased revenue, 298.8 billion yen. Fixed cost also decreased by 51.2 billion yen year-on-year.
Slide 25: Summary of Consolidated Statement of Financial Position and Cash Flow
Summary of Consolidated Statement of Financial Position and Cash Flow (1) ✓ Equity capital increased through public offerings to 1 trillion and 17.1 billion yen and the equity ratio was 47.6% BS ✓ Interest-bearing debts decreased to 494.5 billion yen from the end of Q2, the repayment within one year
Slide 26: Speaker notes: balance sheet and cash flow
◼ Then, I will explain consolidated balance sheet and cash flow. ◼ As a result of the public offering in November, Shareholders' Equity became 1 trillion and 17.1 billion yen. Equity ratio is at 47.6%, which is the highest level among global airlines even in IFRS, in which mileage obligation is incl
Slide 27: References
REFERENCES ©Japan Airlines, ALL rights reserved. 15
Slide 28: Intentionally Left Blank
INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 29: Anti-COVID-19 Measures
《Reference》 Anti-COVID-19 Measures ◼ In-cabin air is replaced in two to three Cabin Appeal of Flysafe Environment in Cabin minutes ◼ Air flows from top to bottom ◼ Passengers do not get on/off during In-cabin Air Flow Image the flight ◼ Passengers face to the same direction ◼ HEPA Filter is equipped
Slide 30: Speaker notes: Flysafe and new normal strategy
◼ On Page 16, our initiatives for Flysafe are shown. Also, on Page 19 and 20, Our strategy for New Normal, which was disclosed at the second quarter financial report, is shown again. ◼ In New Normal, we expect business travel demand in International Passenger would temporarily drop, therefore we wil
Slide 31: Operation Performance by Geographic Segment (Full Service Carrier)
《Reference》 Operation Performance by Geographic Segment (Full Service Carrier) Passenger Revenue (1) Revenue Passengers Carried (1) (2) 3Q 3Q (Cumulative) 3Q (Cumulative) 3rd quarter 3rd quarter (%) Cumulative % (‘000) y/y y/y FY2019 FY2020 FY2019 FY2020 y/y FY2020 y/y America ▼94.9% ▼91.0% 28% 30
Slide 32: Fleet Information
《 Reference 》 Fleet Information End of FY2019 End of 3nd Quarter FY2020 (March 31, 2020) (December 31, 2020) Diff. Owned Leased Total Owned Leased Total Boeing 777-300ER 13 0 13 13 0 13 - Large Boeing 777-200ER 11 0 11 11 0 11 - Large-sized Total 24 0 24 24 0 24 - FSC Boeing 787-9 17 3 20 17 3 20 -
Slide 33: Strategic Direction Toward New Normal
《 Reference 》 Strategic Direction Toward New Normal Path to Recovery of Enterprise Value Our Structural Restructuring Outcome Responsibilities Safety and Restructuring the Comfort Business Structure Reconstruction of Endure COVID-19 Improve profitability / a strong financial Pandemic / take initiati
Slide 34: Structural Review for the New Normal
《 Reference 》 Structural Review for the New Normal Restructuring of the Business Structure Take initiatives for Growth and Improve Profitability / Take Initiatives for SDGs Risk Tolerance ◼ FSC Business ◼ LCC Business Flexible adjustments of fleets and retirement of aged aircrafts Strengthen LCC bus
Slide 35: Accounting Impact by IFRS Adoption
《Reference》 Accounting Impact by IFRS Adoption Profit/Loss Statement ◼ Due to changes in accounting rules for mileage points, revenue allocated to mileage points is deferred as a liability, and recognized when miles are redeemed (The impacts to Profit/loss are limited) ◼ Our main index for performan
Slide 36: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines ©JapanAirlines, ©Japan Airlines, ALL ALL rights rightsreserved. reserved.
Slide 37: Disclaimer
Disclaimer This content 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 crea