Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q3 FY2021 Earnings Presentation
36 slides from Japan Airlines's earnings presentation, Feb 2, 2022
Slide 1: Financial Results 3rd Quarter Mar/2022 (FY2021)
JAPAN AIRLINES Co., Ltd. Financial Results 3rd Quarter Mar/2022（FY2021） February 2, 2022 On New Year’s Day, 2022 ©Japan Airlines, ALL rights reserved. Mt. Fuji and the first sunrise from A350 “New Year Sunrise Flight”
Slide 2: Agenda and notes on presentation
APEX SKYTRAX SKYTRAX APEX SKYTRAX 2021 WORLD CLASS Health Safety Powered Covid-19 Safety Rating 5-Star Airline 5 Star SKYTRAX The World’s Best by SimpliFlying Audit Economy Class Diamond COVID-19 Excellence Award The Best Economy Class Seat 1. PERFORMANCE OVERVIEW FOR The 8th 3rd Quarter FY21 IR Goo
Slide 3: Performance Overview for 3rd Quarter FY21
PERFORMANCE OVERVIEW FOR 3rd Quarter FY21 Revenue EBIT (1)/Profit or Loss (2) （JPY Bn）1,200.0 ▼614.2 Bn （JPY Bn） 1,112.7 EBIT Profit or Loss (▼55.2%) 200.0 114.6 100.0 74.8 800.0 +141.9 Bn 0.0 (+39.8%) EBIT Margin(3) 498.4 ▼ 100.0 10.3% 400.0 356.5 ▼128.3 ▼ 200.0 ▼212.7 ▼183.3 ▼297.9 Bn ▼ 300.0 ▼294
Slide 4: Conference call script: third quarter results
➢ Thank you for participating in our conference call for the third Quarter Financial Result Reporting. ➢ The third quarter Revenue was 498.4 billion yen. It was down by 55.2% when compared with the pre-COVID level of the third quarter of fiscal year 2019, but it was up by about 40% year-on-year. ➢ E
Slide 5: Recent Outlook
1. PERFORMANCE OVERVIEW FOR 3rd Quarter FY21 2. RECENT OUTLOOK 3. RECENT INITIATIVES 4. DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 5. REFERENCES ©Japan Airlines, ALL rights reserved. 4
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Slide 7: EBIT, EBITDA and Cash Burn
EBIT, EBITDA and CASH BURN ✓ Cash burn diminished and EBITDA turned positive in the Q3 period ✓ Q3 performance was in line with the performance forecast ✓ 350 billion yen was financed through hybrid financing, and the total liquidity at hand, together with the unused credit line of 300 billion yen,
Slide 8: Script: EBITDA and cash burn
➢ On this slide, I will explain EBITDA and Cash burn. ➢ In this third quarter period, the passenger revenue increased because mainly the domestic passenger demand rapidly recovered. Also, International Cargo revenue continued to be good. ➢ Moreover, we strived to reduce costs even further altogether
Slide 9: Passenger and Cargo Demand
PASSENGER and CARGO DEMAND ✓ While Omicron variant makes the situation unclear, the current performance forecast remains unchanged because of cargo revenue increase and cost cut • Domestic Passenger would recover rapidly if COVID infection slows down • International Cargo demand is expected to remai
Slide 10: Script: passenger and cargo demand
➢ This slide shows the recent Passenger and Cargo demand. ➢ In International Passenger, border restrictions still continue but we captured a transit demand between North America and Asia to make the passenger number about 10% of the pre-COVID level. ➢ Domestic Passenger recovered rapidly after the l
Slide 11: Recent Initiatives
1. PERFORMANCE OVERVIEW FOR 3rd Quarter FY21 2. RECENT OUTLOOK 3. RECENT INITIATIVES 4. DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 5. REFERENCES ©Japan Airlines, ALL rights reserved. 7
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Slide 13: Recent Initiatives: ESG
RECENT INITIATIVES ESG Transition Bond Actions to climate change The world’s first transition bonds in the SAF(Sustainable Aviation Fuel) Development aviation industry (1) and Promotion The first airline model example ✓ Joint SAF Purchase with Alliance Members selected by the Japanese government • J
Slide 14: Script: ESG initiatives
➢ On this slide, I will explain our ESG initiatives. ➢ Today, we decided to issue the world’s first transition bonds in the airline industry. With this financing, we will upgrade to more fuel-efficient aircrafts to accelerate our net-zero emission initiatives. ➢ Sustainalytics, an external review bo
Slide 15: Details of Financial Results for 3rd Quarter FY21
1. PERFORMANCE OVERVIEW FOR 3rd Quarter FY21 2. RECENT OUTLOOK 3. RECENT INITIATIVES 4. DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 5. REFERENCES ©Japan Airlines, ALL rights reserved. 9
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INTENTIONALLY LEFT BLANK ©Japan Airlines, ALL rights reserved.
Slide 17: Consolidated Financial Results
DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 Consolidated Financial Results Q3 (April to December) Q3 (October to December) （JPY：Bn ） FY19Q3 FY20Q3 FY20Q3 FY19Q3 FY20Q3 FY21Q3 FY21Q3 Diff. y/y Diff. y/y Diff. y/y Revenue 1,112.7 356.5 498.4 ▼614.2 ▼55.2% +141.9 +39.8% 207.8 +46.0 +28.5% Interna
Slide 18: Script: details of third quarter results
➢ I would like to explain the details of the third Quarter financial results. ©Japan Airlines, ALL rights reserved. 10-S
Slide 19: Changes in EBIT (Revenues/Expenses)
DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 Changes in EBIT (Revenues／Expenses) ASK y/y： +56.5% + stands for profit increase（ revenue increase, cost decrease ) RPK y/y： +46.7% ▼ stands for profit decease ( revenue decrease, cost increase ) ＋110.8 Bn (JPY：Bn） 16.6 Bn yen of Personnel cost reduc
Slide 20: Script: changes in revenues and expenses
➢ This slide shows ups and downs of Revenues and Expenses year-on-year. ➢ Revenue increased by 141.9 billion yen year-on-year through the passenger number increase along with the rapidly-recovering domestic passenger demand and large sales increase in the still-good Cargo business. ➢ Expenses increa
Slide 21: International Passenger Operations (Full Service Carrier)
DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 International Passenger Operations (Full Service Carrier) ✓ The passenger number gradually recovered toward the end of December as transit passenger demand was captured and the border restriction was temporarily eased Int'l Pax Int'l Capacity (Seat N
Slide 22: Script: international passenger operation
➢ I will explain the operation of International Passenger, Domestic Passenger and Cargo. ➢ This slide shows the International Passenger operation. ➢ Border restrictions in many countries are still in place, therefore we captured an expat demand and a transit demand between Asia and North America for
Slide 23: Domestic Passenger Operations (Full Service Carrier)
DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 Domestic Passenger Operations (Full Service Carrier) ✓ Demand recovered rapidly after the lift of state of emergency declaration ✓ Adequate operation captured 85% (vs. 2019) of passenger demand for New Year holidays ✓ “Award Anytime” for domestic fli
Slide 24: Script: domestic passenger results
➢ This slide shows Domestic Passenger results. ➢ The domestic passenger demand rapidly recovered soon after the lift of the state of emergency declaration. ➢ Our timely-manner capacity expansion further increased our passenger number to the 85% level of pre-COVID for New Year holidays. ➢ Then, the t
Slide 25: Cargo
DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 Cargo ✓ International Cargo demand and price increased significantly y/y due to a shift from ocean shipment ✓ Achieved significant increase of revenue y/y through actively operating cargo flight with own passenger aircrafts and chartered freighters V
Slide 26: Script: cargo operations
➢ This slide shows Cargo operations. ➢ International Cargo still continues to be good. As a result, the revenue for the third quarter increased about three time larger than the pre-COVID level. ➢ Especially, the revenue for the peak season from October to December increased 3.5 times larger. ➢ The d
Slide 27: Expenses
DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 Expenses Actual Fixed Cost (1) Breakdown of Operating Expenses (JPY: Bn) Actual Fixed Cost Fixed Cost (except Actual Fixed Cost) ✓ Actual Fixed Cost for the Q3 period (April to Dec.) was 346.7 Revenue and Capacity Linked Cost billion yen(y/y ▼22.8 bi
Slide 28: Script: expenses
➢ On this slide, I will explain the expenses. ➢ The operating expense increased by just 5% year-on-year to 687.9 billion yen, while ASK increased by 56.5% year-on-year. ➢ The Actual Fixed Cost for the third quarter period was 346.7 billion yen, reduced by 22.8 billion year-on-year. ➢ In the previous
Slide 29: Summary of Statement of Financial Position and Cash Flow
DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 Summary of Consolidated Statement of Financial Position and Cash Flow ✓ Equity Ratio and Net D/E Ratio for credit rating was improved by the hybrid financing to BS a solid level of 42.9% and 0.2x, respectively ✓ Operating cash flow turned to 9.1 bill
Slide 30: Script: balance sheet and cash flow
➢ This slide shows balance sheet and cash flow. ➢ 350 billion yen of the hybrid financing and the unused credit line of 300 billion yen enabled us to secure enough amount of liquidity at hand. Our liquidity at hand at the end of December is more than 800 billion yen. ➢ Equity ratio for credit rating
Slide 31: References
1. PERFORMANCE OVERVIEW FOR 3rd Quarter FY21 2. RECENT OUTLOOK 3. RECENT INITIATIVES 4. DETAILS OF FINANCIAL RESULTS FOR 3rd Quarter FY21 5. REFERENCES ©Japan Airlines, ALL rights reserved. 17
Slide 32: Full-Year Performance Forecast Mar/2022
Originally disclosed on Nov 2,2021 《Reference》 FULL-YEAR PERFORMANCE FORECAST MAR/2022 ✓ Full-year performance forecast is expected to improve significantly y/y to EBIT ▼198 billion yen and Net loss ▼146 billion yen ✓ The 2nd half is expected to improve from the 1st Half by about EBIT 100 billion ye
Slide 33: Operation Performance by Geographic Segment
《Reference》 Operation Performance by Geographic Segment (1) (Full Service Carrier) Passenger Revenue Revenue Passengers Carried Q3 (April to Dec.) Q3 (Oct. to Dec.) Q3 (April to Dec.) Q3 (Oct. to Dec.) (‘000) (%) FY21Q3 FY21Q3 FY21Q3 Vs. FY19Q3 Vs. FY20Q3 FY21Q3 Vs. FY20Q3 Component Vs.FY19Q3 Vs. FY
Slide 34: Fleet Information
《 Reference 》 Fleet Information End of FY20 (March 31, 2021) End of FY21Q3 (December 31, 2021) Owned Leased Total 1 Total 2 Owned Leased Total 1 Total 2 Diff. retired aircraft retired aircraft Total2 of Mar/21 - excluded excluded and Dec/21 Airbus A350-900 4 4 8 8 10 4 14 14 +6 Boeing 777-300ER 13 0
Slide 35: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines ©Japan Airlines, ALL rights reserved. 21
Slide 36: 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