Qantas Airways Limited · ASX:QAN
Qantas Airways — H1 FY2025 Earnings Presentation
66 slides from Qantas Airways's earnings presentation, Feb 27, 2025
Slide 1: ASX announcement: Qantas Group HY25 Investor Presentations
27 February 2025 ASX Market Announcements Office Australian Securities Exchange Limited Lodged electronically via ASX Online Qantas Group HY25 Investor Presentations Qantas Airways Limited attaches the following documents: • Qantas Group HY25 Investor Presentation; and • Qantas Group HY25 Investor P
Slide 2: 1H25 Results Investor Presentation
1H25 Results Investor Presentation Qantas Airways Limited 27 February 2025 ASX:QAN US OTC: QABSY
Slide 3: Disclaimer
Disclaimer Summary information For definitions of non-IFRS financial information refer to statements, particularly in light of economic and the Glossary (see slide 34) and the Consolidated Interim geopolitical uncertainties, including global market This Presentation contains summary information abou
Slide 4: Maintaining financial strength to invest in fleet renewal
Maintaining financial strength means we can invest in our largest ever fleet renewal and cabin Our People Our Customers overhaul programs, and provide new opportunities for our people and better experiences for our customers Vanessa Hudson Group CEO Our Shareholders Our Community & Partners 3
Slide 5: 1H25 overview
1H25 overview Operating results Customer and People $1,385m • Strong performance across the Group’s portfolio • 4 ppt uplift in reputation score5 from 1H24 to Underlying Profit Before Tax • Operating cash flow of $2.1b 1H25 • Statutory Profit After Tax includes $65m increase • 13 ppt uplift in Qanta
Slide 6: Group 1H25 integrated portfolio highlights
Group 1H25 integrated portfolio highlights • Dual brand strategy drives segment success Domestic and sustainable industry-leading margins with 1H25 highlights: Portfolio Segment EBIT4 ($b) leadership positions across all key market • Ongoing narrowbody renewal segments program including Jetstar A321
Slide 7: Vision: Driving sustainable shareholder value starts with our people and customers
Vision: Driving sustainable shareholder value starts with our people and customers OUR PEOPLE OUR CUSTOMERS Proud to work for us Proud to fly with us Passionate about our customers and Trust and depend on us to take care empowered to provide great service of the moments that matter Belong to a safe
Slide 8: Investing in our People and Culture
Investing in our People and Culture Listen and Act Connect and Support Inclusion & Belonging Retention December 2024 Group Attrition1 5.7% Steadily declined over the past 6 months from 6.3% in June 2024 Attraction • Announced $40m investment in • $1,000 Thank-You payment • Achieved Advanced Workplac
Slide 9: Investing in our Customers: 1H25 Highlights
Investing in our Customers Leading ground experience Exceptional flying experience 1H25 performance Qantas Airlines Reputation (RepTrak Score) PICTURE 64 57 2Q24 2Q25 Airline NPS (Domestic and International) • Launched Group Boarding for Qantas in major • New aircraft deliveries: Jetstar 6 x A321LRs
Slide 10: Investing in our Customers: 1H25 Highlights
Investing in our Customers Seamless digital experience Trusted to recover well Unrivalled reward and recognition • Launched a digital Australian Travel Declaration • Launched Request Tracker for complaints, refunds • Expanded Classic Plus to Domestic, with 20 million 1H25 Highlights trial with ABF1
Slide 11: Investment in new fleet
Investment in new fleet Investment in existing fleet 18 new aircraft deliveries in FY25 (with more than 100 new aircraft on order) 1 737 Refresh New seating Refreshed cabins Next generation New materials with ergonomic seating new look and feel Improved and more Refreshed cabins, Quieter, more comfo
Slide 12: Investing in our Community
Investing in our Community Growing careers, creating jobs Connecting and contributing Connecting to our regions the regions Supporting Supportingour communities Communities First Nations partnerships and building the economy >$30m invested via Resident Fares 4-year partnership launched >29k people e
Slide 13: Sustainability – Continued progress across our Climate Action Plan
Sustainability – Continued progress across our Climate Action Plan SAF & carbon markets Customer Operational improvements Progress in the Climate Fund, >$100m committed: Expanded SAF Coalition Realised reduction in carbon emissions on • Jet Zero: QLD alcohol-to-jet SAF project • Increased membership
Slide 14: Financial Performance
Financial Performance CANTAS GROUP
Slide 15: 1H25 Group financial metrics
1H25 Group financial metrics Profit metrics (vs 1H24) Balance Sheet and Cash Flow metrics Key statistics vs 1H24 $1,385m +$140m $2.1b +10.3% +12.7% Underlying profit before tax Operating cash flow ASKs RPKs $923m +$54m $1.4b +1.9 ppts +8.8% Statutory profit after tax Net Capital Expenditure Seat Fac
Slide 16: 1H25 profit bridge compared to 1H24
1H25 profit bridge compared to 1H24 $m ASKs RASK Group Domestic +1% Group Domestic +5% Group International +16% Group International (7%) Discount Rate 5 Net Finance Costs (20) 337 (277) Capacity Other (10) (138) (186) 211 (53) (22) (29) 1,385 Fuel 322 (25) 1,245 1H24 Capacity RASK CPI Transformation
Slide 17: 1H25 movement in Net Debt
1H25 movement in Net Debt $m Financing cash impacts and FX ($568m) Net Cash from Operating Activities +$2,073m (177) (235) (106) 2,485 (1,427) (509) (59) (4,106) (4,134) 30 Jun 24 EBITDA Working Capital1 Interest & Tax Financial Net Capex Spend3 Shareholder FX revaluations 31 Dec 24 Net Debt Framewo
Slide 18: Portfolio Results
Portfolio Results CANTAS GROUP
Slide 19: Integrated portfolio drives value beyond the businesses
Integrated portfolio drives value beyond the businesses Integrated value metrics Domestic margin1 premium Dual brand Network connectivity Domestic and Domestic and Airline share of wallet International International Integrated Airline yield per passenger Loyalty offering QFF program engagement Procu
Slide 20: Qantas Domestic
Qantas Domestic Strong underlying performance across network 1H25 1H24 Change • +7% RASK vs 1H24 as a result of Revenue $M 4,010 3,758 +7% – +2.0 ppt of seat factor growth, with all markets outperforming 1H24 – +1.5 ppt of yield mix from continued return of business traffic and network design Underl
Slide 21: Qantas International (including Freight)
Qantas International (including Freight) Ongoing restoration of capacity and scale across international markets as demand 1H25 1H24 Change remains strong Revenue $M 4,619 4,340 +6% • 4% RASK contraction vs 1H24, with rate of moderation performing ahead of expectations and supported by +1.9ppt improv
Slide 22: Jetstar Group
Jetstar Group Jetstar Group record result driven by strong demand, capacity growth from efficient new fleet, 1H25 1H24 Change transformation offsetting CPI, operational improvements and lower fuel costs Revenue1 $M 2,894 2,486 +16% Jetstar’s Australian domestic network delivered $269m Underlying EBI
Slide 23: Qantas Loyalty
Qantas Loyalty Strong performance across all key businesses, offset by previously disclosed impact 1H25 1H24 Change from Classic Plus investment Revenue $M 1,334 1,271 +5% New product launches increasing engagement in the program • Positive early signs with 2x growth in earn from members who have re
Slide 24: Financial Framework and Fleet
Financial Framework and Fleet
Slide 25: Financial Framework continuing to deliver for all stakeholders
Financial Framework continuing to deliver for all stakeholders 1 Maintain optimal capital structure 2 ROIC > WACC through the cycle 3 Disciplined allocation of capital Grow Invested Capital with disciplined Minimise cost of capital by targeting a Net investment, return surplus capital to Debt range
Slide 26: Strong Balance Sheet Settings
Strong Balance Sheet Settings Total liquidity of >$11.5b as at 31 December 2024 Liquidity • Financial Framework Net Debt target settings results in structurally higher sources of liquidity • Unencumbered assets include ~$6.3b of unencumbered aircraft (~63% of the Group $1.2b >$8b2 fleet4), spare eng
Slide 27: Structurally low Financial Leverage
Structurally low Financial Leverage Financial Framework delivers structurally low financial Leverage3: Targeting at or below middle of Net Debt Target Range leverage • At the middle of Net Debt Target Range1 expected to deliver Moody’s Net Debt/EBITDA2 outcome of ~1.5x – 2.0x through the cycle • Mai
Slide 28: Disciplined allocation of Capital
Disciplined allocation of Capital Ongoing review of Invested Capital allocation across the portfolio of businesses Continuous Review / Recycle Capital • Capital allocation framework consistently applied to maximise integrated value of the Group’s portfolio through the cycle Operating Cash Flow All d
Slide 29: New aircraft deliveries and fleet flexibility
New aircraft deliveries and fleet flexibility New aircraft deliveries1 Current fleet delivery status Key: Changes from FY24 presentation in superscript • OEM6 production process continues to be challenged by supply chain disruption (incl. seat suppliers), with the Group incurring minor aircraft deli
Slide 30: New fleet technology to drive benefits over time
New fleet technology to drive benefits over time Legend: + Some EIS1 costs Material benefit ++ Relatively higher EIS1 costs Relatively greater benefit Target financial benefits at scale Customer A321LR vs A220 vs A321XLR vs A321/A320ceo 717-200 737-800 Modernised cabin design improving comfort and c
Slide 31: Narrowbody fleet benefits over investment period
Benefits expected to be realised over period of fleet investment Fleet Strategic benefits FY25 FY26 FY27 FY28 FY29 Growth and scale A321LR/XLR & A320neo • Fuel and scale efficiencies and growth through new international routes and 787 Maturity redeployment Narrowbody A319 Q400 Domestic range and fle
Slide 32: Outlook
Outlook CANTAS GROUP
Slide 33: Outlook
Outlook Business Outlook Financial Outlook • Expect strong travel demand across the portfolio into 2H25 • FY25 fuel cost at ~$5.22b1, inclusive of hedging and gross carbon cost of ~$70m2 • Group RASK expected to increase in 2H25 vs 2H24: • FY25 Depreciation and amortisation is expected to be — Group
Slide 34: Outlook: Guidance Tables
Outlook Guidance Tables Capacity Guidance1 3Q25 4Q25 2H25 FY25 1Q26 Commentary (vs prior corresponding period) Group Domestic +1% +3% +2% +2% +4% Domestic • Group domestic growing in line with demand with Jetstar growth Qantas Domestic +0% +2% +1% -1% +2% supported by addition of new fleet. Jetstar
Slide 35: Glossary
Glossary Available Seat Kilometres (ASK) – Total number of seats FX – Foreign exchange Return on Invested Capital (ROIC) – ROIC EBIT for the 12 available for passengers, multiplied by the number of months ended for the reporting period, divided by the 12 Invested Capital (IC) – Net assets (excluding
Slide 36: — = = =< QANTAS RDUP.
— = = 7 =< QANTAS RDUP.
Slide 37: Thank you
MSGANTAS GROUP |
Slide 38: 1H25 Results Supplementary Presentation
1H25 Results Supplementary Presentation Qantas Airways Limited 27 February 2025 ASX: QAN US OTC: QABSY
Slide 39: Disclaimer
Disclaimer Summary information For definitions of non-IFRS financial information refer to geopolitical uncertainties, including global market the Glossary (see slide 29) and the Consolidated Interim conditions and demand; and legal, technological and This Presentation contains summary information ab
Slide 40: Group Performance
Group Performance Weoantas croup
Slide 41: 1H25 Key Group Financial Metrics
1H25 Key Group Financial Metrics 1H25 1H24 Profit metrics Revenue $M 12,129 11,127 Underlying Profit Before Tax $M 1,385 1,245 Underlying Earnings per Share c 62.8 51.7 Statutory Profit Before Tax $M 1,320 1,245 Statutory Profit After Tax $M 923 869 Statutory Earnings per Share1 c 59.9 51.8 Balance
Slide 42: 1H25 Key Group Operating Metrics
1H25 Key Group Operating Metrics 1H25 1H24 Change Unit Revenue (RASK)1 c/ASK 11.31 11.65 (2.9)% Total Unit Cost1 c/ASK (9.50) (9.85) 3.6% Unit Cost (ex-Fuel)1 c/ASK (6.18) (6.00) (3.1)% Available Seat Kilometres (ASK) M 76,438 69,324 10.3% Revenue Passenger Kilometres (RPK) M 65,337 57,989 12.7% Pas
Slide 43: Items not included in Underlying PBT
Items not included in Underlying PBT $M 1H25 Comments $65m increase in legal provision. In December 2024, the Group reached an agreement with the Transport Workers Union (TWU) on the payment of compensation to Legal provisions and related costs (65) the former ground handlers to a total value of $12
Slide 44: Reconciliation to Underlying Profit Before Tax
Reconciliation to Underlying Profit Before Tax $M 1H25 1H24 Items not Items not included in included in Statutory Underlying Underlying Statutory Underlying Underlying Net passenger revenue 10,474 – 10,474 9,614 – 9,614 Net freight revenue 671 – 671 605 – 605 Other revenue and income 984 – 984 908 –
Slide 45: Statutory Income Statement Detail
Statutory Income Statement Detail $M 1H25 Net passenger revenue up 9% 10,474 • Group capacity increased 10% from new fleet capacity up-gauge with Group RASK down 3% Net passenger revenue — Group Domestic1 Unit Revenue up 5% due to continued return of higher yielding business- Net freight revenue 671
Slide 46: Statutory Other Revenue and Expenses Detail – Compared to 1H24
Statutory Other Revenue and Expenses Detail – Compared to 1H24 $M 1H25 1H24 Change $M 1H25 1H24 Change Other Revenue and Income 984 908 76 Other Expenditure 1,756 1,457 299 Frequent Flyer marketing revenue and other Qantas Loyalty Technology and digital up 20% businesses up 13% • Increased technolog
Slide 47: Group Unit Revenue and Unit Cost (c/ASK)
Group Unit Revenue and Unit Cost (c/ASK) RASK 1H25 CASK 1H25 Net passenger revenue $M 10,474 Underlying (Profit) Before Tax $M (1,385) Excluding Other passenger $M (1,829) Less: Ticketed passenger revenue $M 8,645 revenue A ATicketed Passenger Revenue $M 8,645 C CNet expenditure $M 7,260 Less: Fuel
Slide 48: Revenue received in advance (RRIA) and travel credits
Revenue received in advance (RRIA) and travel credits Revenue received in advance ($B) 8.5 8.5 8.1 7.8 • Airline RRIA was seasonally lower in 1H25 (December 2024) 0.6 0.6 0.5 but experienced strong growth relative to 1H24 (December 0.5 2023) • Unredeemed Frequent Flyer revenue continued to grow in 4
Slide 49: Financial Framework and Fleet
Financial Framework and Fleet 12
Slide 50: Return on Invested Capital (ROIC) calculation
Return on Invested Capital (ROIC) calculation 12 mths to 12 mths to • ROIC EBIT is derived by adjusting Underlying EBIT $M to exclude AASB 16 lease depreciation and includes Dec 24 Dec 23 notional depreciation for leased aircraft as if they were owned Underlying EBIT 2,439 2,483 • Non-aircraft lease
Slide 51: Balance Sheet summary under Financial Framework
Balance Sheet summary under Financial Framework As at 31 As at 31 • Invested Capital is defined as Net Assets adjusted for $M Dec 2024 Dec 2023 the following: Net Assets 743 117 – Exclusion of Cash and cash equivalents and Less: Cash and cash equivalents (2,340) (1,545) Interest-bearing liabilities
Slide 52: Net Debt Target Range
Net Debt Target Range • Net Debt Target Range = 2.0x — 2.5x EBITDA where ROIC = 10% • At forecast average Invested Capital of $5.4b1, optimal Net Debt range is $4.7b to $5.8b Forecast Jun 25 Drivers of Net Debt Target Range $B Forecast Invested Capital Avg Forecast Invested Capital for trailing 12 m
Slide 53: Net Debt and Liquidity Position
Net Debt and Liquidity Position As at 31 As at 30 Net Debt unchanged for the 6 months to December 2024 $M Change Dec 2024 Jun 2024 – Gross debt increased by $0.6b from $0.2b drawdown of Net on Balance Sheet debt1 3,290 3,311 21 secured and $0.5b of unsecured debt, partially offset by $0.1b of schedu
Slide 54: Net Debt movement under the Financial Framework
Net Debt movement under the Financial Framework $M 1H25 1H24 The Financial Framework considers aircraft leases as part of Net Debt Opening Net Debt (4,106) (2,885) – Aircraft leases are initially recognised in Net Debt at fair Net cash from operating activities 2,073 1,341 value Less: Net lease prin
Slide 55: Financial Framework versus Statutory Net Debt
Financial Framework versus Statutory Net Debt As at 31 As at 30 • Under the Financial Framework, aircraft leases are $M Dec 2024 Jun 2024 treated as capital acquisitions and recognised at fair value (through Net Capex) and a notional Interest-bearing liabilities 5,624 5,035 borrowing recognised as p
Slide 56: Financial risk management framework
Financial risk management framework Hedging program Principles of Financial Risk Management • Principles of financial risk management Reducing cash flow volatility in the short term through – Manage net cash flow impacts disciplined hedging program to allow for implementation of operational levers –
Slide 57: Robust financial risk management
Robust financial risk management Operational Fuel and FX Capital Expenditure FX – Hedging of USD Fleet Payments • 1H25 fuel cost at $2.5b • Hedging remains consistent with long term approach to risk – Inclusive of ~$30m of SAF and carbon credits management • 2H25 is 72%1 hedged through a combination
Slide 58: Illustrative: Fleet benefits cycle
Illustrative: Fleet benefits cycle Benefits by fleet type over delivery timeline Benefits expected to be realised over period of fleet investment Returns Introductory Introduction Building to scale Maturity • Entry into service (EIS) costs of new aircraft types impact initial returns of fleet invest
Slide 59: Supplementary Segment Information
Supplementary Segment Information 22
Slide 60: Qantas Domestic and International Overview
Qantas Domestic and International Overview Qantas Domestic Qantas International • Consists of Qantas Domestic and QantasLink • Consists of Qantas International and Qantas Freight • Full service offering targeting business purpose and premium leisure • Globally recognised long haul carrier targeting
Slide 61: Jetstar Group Overview
Jetstar Group Overview Jetstar Domestic Jetstar International and New Zealand Jetstar in Asia • Australian industry-leading LCC1 Jetstar International3 Jetstar Japan • 100% owned by Qantas Group • Australian industry-leading LCC1 capitalising on • Jetstar Japan is the #1 domestic LCC1 at Tokyo’s • S
Slide 62: Diversification and growth at Qantas Loyalty
Diversification and growth at Qantas Loyalty Members Redemption Earn • Deliver everyday engagement between • Increase points earn through the flywheel • Large ecosystem for members to engage in members and the Qantas brand effect from growth in overall redemptions everyday earn – Market leading airl
Slide 63: Continuous delivery of transformation benefits
Continuous delivery of transformation benefits 1H25 $m 1H25 transformation highlights 211 186 Increased efficiency (fuel Revenue Innovation – e.g. Commencement of Group and scale) on existing Flight Switch, Freight Boarding in mainline routes driven by new and Products, Price Optimisation domestic o
Slide 64: 1H25 Group and Group Domestic Traffic Statistics vs 1H24
1H25 Group and Group Domestic Traffic Statistics vs 1H24 1Q25 1Q24 Change (%) 2Q25 2Q24 Change (%) 1H25 1H24 Change (%) Total Qantas Group Operations Passengers Carried ‘000 13,906 12,861 8 14,393 13,151 9 28,299 26,012 9 Revenue Passenger Kilometers M 32,219 28,840 12 33,118 29,149 14 65,337 57,989
Slide 65: 1H25 Group International Traffic Statistics vs 1H24
1H25 Group International Traffic Statistics vs 1H24 1Q25 1Q24 Change (%) 2Q25 2Q24 Change (%) 1H25 1H24 Change (%) Group International Available Seat Kilometres M 23,849 20,510 16 24,728 21,324 16 48,577 41,834 16 Group International Unit Revenue % (10) (3) (7) Change Qantas International Passengers
Slide 66: Glossary
Glossary Available Seat Kilometres (ASK) – Total number of seats Invested Capital (IC) – Net assets (excluding cash, debt, Revenue Passenger Kilometres (RPK) – Total number of available for passengers, multiplied by the number of other financial assets and liabilities and tax balances) passengers ca