Latam Airlines Group Sa · BCS:LTM
Latam Airlines Group Sa — Debt Investor Presentation (August 2022)
42 slides from Latam Airlines Group Sa's debt investor presentation, Aug 30, 2022
Slide 1: Updated Business Plan: 5 Years Business Plan Projection
Updated Business Plan LATAM AIRLINES GROUP 5 Years Business Plan Projection Subject to Applicable Confidentiality Agreements and Requirements August 2022 HIGHLY CONFIDENTIAL
Slide 2: Disclaimers
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 2 Updated Business Plan Disclaimers Disclaimer This presentation (“Presentation”) is for informational purposes only. The purpose of this Presentation is to disclose the updated consolidated business pla
Slide 3: Forward Looking Statements
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 3 Updated Business Plan Disclaimers Forward Looking Statements Certain statements included in this Presentation that are not historical facts are forward - looking statements for purposes of the safe har
Slide 4: Use of Projections and Use of Data
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 4 Updated Business Plan Disclaimers Use of Projections and Use of Data Use of Projections This Presentation contains projected financial information. Such projected financial information constitutes forw
Slide 5: Use of Non-GAAP Financial Metrics and Other Key Financial Metrics
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 5 Updated Business Plan Disclaimers Use of Non - GAAP Financial Metrics and Other Key Financial Metrics Use of Non - GAAP Financial Metrics and Other Key Financial Metrics This Presentation includes cert
Slide 6: Certain Risks Related to LATAM
6 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Disclaimers ▪ the effects of competition in the airline industry; Certain Risks Related to LATAM Certain Risks Related to LATAM The risks presented below are examples, among other
Slide 7: Certain Risks Related to LATAM
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 7 Updated Business Plan Disclaimers Certain Risks Related to LATAM ▪ future terrorist incidents, cyberattacks or related activities affecting the airline industry; ▪ future outbreak of diseases, or the s
Slide 8: Company Overview
HIGHLY CONFIDENTIAL Updated Business Plan Company Overview
Slide 9: LATAM – Latin America's Leading Airline Group and Global Player
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview LATAM – Latin America’s Leading Airline Group and Global Player Source: Company filings. 1 Estimates based on companies’ public filings and news reports, measured b
Slide 10: The Group Offers an Attractive Value Proposition
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview The Group Offers an Attractive Value Proposition Product & Service Recognitions 1 OAG Punctuality List 2021. 2 Best South American Airline (Skytrax World Airline Aw
Slide 11: LATAM group's vast global network
11 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Note: Data as of 2019; LATAM Argentina ceased operation in 2020. Appraisal value of slots at JFK and LHR of US$ 35 million as of December 2021. Appraisal value of passenger and c
Slide 12: LATAM Group's Leading Market Share in Domestic and International Markets
Note: LATAM Argentina ceased operation in 2020. Source: 1 ANAC Brazil’s website (as measured by RPKs), JAC Chile’s website (RPKs), DGAC Peru’s website (number of passengers carried), Diio.net for Colombia and Ecuador (ASKs) as of December 2021; 2 Diio.net measured in ASKs as of December 2021 12 HIGH
Slide 13: Cargo Business Overview
13 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview Cargo Business Overview Resiliency During COVID - 19 Pandemic Source: Public filings; Traffic data as of June 2022. Appraisal value of cargo business as of Janua
Slide 14: Frequent Flyer Program Overview
14 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Overview of LATAM Premium LATAM & Courtesy Access in associate Premium Preferential Special upgrade with LATAM Seat Checked all flights a irlines lounge s boarding support servic
Slide 15: Frequent Flyer Program Overview (Cont'd)
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview Ways to Earn Miles … with various ways of earning and redeeming miles … Frequent Flyer Program Overview (Cont’d) Compelling Value Proposition for Customers Driving
Slide 16: Frequent Flyer Program: Diversified cash flow streams
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview Diversified cash flow streams ▪ Miles sold to airline and non - airline partners (including financial institutions) provide liquidity to the business and have a pos
Slide 17: Sustainability goals
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview GOALS Committed not to Carbon neutral Aim to have 5% of Adapt business to a Eliminate exceed 2019 net airline group by 2030 total fuel circular economy single - use
Slide 18: Key Strategic Focus on Sustainability
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview Key Strategic Focus on Sustainability Through its ESG strategy, LATAM Airlines will measure, monitor and report on its sustainable development impact and advance th
Slide 19: LATAM is Ready to Emerge from Chapter 11 Stronger than Ever
19 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Company Overview $10.4 (36)% +70% $6.7 At Filing As of Dec’22 At Filing As of Dec’22 Note: May not sum due to rounding; 1 “At Filing” refers to 5/25/2020 petition date debt balan
Slide 20: Key Criteria Supporting the Updated Business Plan
HIGHLY CONFIDENTIAL Updated Business Plan Key Criteria Supporting the Updated Business Plan
Slide 21: Key criteria supporting the Updated Business Plan
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 21 Updated Business Plan Key criteria supporting the Updated Business Plan ▪ Demand recovery is assumed sustained ▪ Corporate segment recovery in line with previous assumptions ▪ Competitor publicly avai
Slide 22: Demand / Capacity
HIGHLY CONFIDENTIAL Updated Business Plan Demand / Capacity Updated Business Plan
Slide 23: Demand / Capacity: capacity plan inputs
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan LATAM’s capacity plan was determined upon two main inputs: the expectation of market demand recovery based on observed trend as of July, 2022
Slide 24: Bottom-up approach to Market Demand Recovery
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan A “bottom - up” approach was followed to assess the Market Demand Recovery Length of haul ▪ Domestic – at country Level ▪ Regional – from giv
Slide 25: Market demand recovery framework
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan # Historic data observed # Assumptions Total baseline RPKs + CAGR Total forecast RPKs Total baseline RPKs Source: Global Strategic Consulting
Slide 26: Demand Recovery Assumptions: Domestic Markets
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan Demand in affiliate domestic markets expected to reach 2019 levels during 2022, one quarter faster recovery compared to Previous Business Pla
Slide 27: Demand Recovery Assumptions: Regional Market
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan ▪ Based on current trends, recovery to 2019 levels is forecasted by Q 4 2022 assuming travel restrictions continue to be lifted Demand in reg
Slide 28: Demand Recovery Assumptions: Long-Haul Market
28 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan Based on current trends, long - haul travel demand is the slowest to recover, expected to reach 2019 levels in ~Q2 2023 Demand Recovery As
Slide 29: Jet Fuel assumptions based on market consensus
29 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Demand / Capacity Updated Business Plan Business Plan’s Jet Fuel assumptions based on market consensus ▪ Macroeconomic variable assumptions were based on market consensus guidanc
Slide 30: Updated Business Plan
HIGHLY CONFIDENTIAL Updated Business Plan Updated Business Plan
Slide 31: Total Revenues projected to reach US$13.9 billion in 2027
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Current expectations are that Total Revenues increase approximately 30% when compared to pre - COVID levels, reaching an estimated US$ 13.9 billions in 2027 No
Slide 32: Cargo business strategy and projections
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 32 Updated Business Plan Updated Business Plan ● LATAM cargo affiliates business strategy reflected in the plan continues being “Belly - Supporting Freighter” ● Based on current trends, capacity expected
Slide 33: Cost-cutting measures and operating costs ex Fuel
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan LATAM’s cost - cutting measures during the pandemic are driving a decrease in the Company’s operating costs, ex Fuel, expected to return to 2019 levels in 2023 Updated Business Plan
Slide 34: Updated Business Plan EBIT and EBITDA projections
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan ▪ In 2019, LATAM flew 150 billion ASKs and reported revenue of US$ 10.4 billion and EBITDA of US$ 2.2 billion ▪ LATAM’s capacity, measured in ASKs, fell to 56 billion in 2020 , a 63
Slide 35: Operational cash flow and free cash flow forecast
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Operational cash flow expected to exceed US$ 2 billion from 2023 onwards Changes in Working Capital ▪ General : Forecasted working capital in the period 2022 t
Slide 36: Free Cash Flow: Capital Expenditures Assumptions
36 HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Capital expenditures include fleet growth, maintenance and projects, as well as key customer facing transformations: i.e. cabin retrofit and digital experie
Slide 37: Estimated Annual Fleet cash out and fleet plan
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 37 Updated Business Plan Estimated Annual Fleet cash out saving approx. 40% vs 2019 Updated Business Plan Fleet reduction until 2022 ▪ Rejection of 26 aircraft ▪ Retirement of 11 older NB ▪ 15 B767s take
Slide 38: Expected Financing Cash Flows
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Expected Financing Cash Flows Based on current trends, positive Cash Flow from 2023 onwards are expected 38 US$ MM 2019 2020 2021 2022 2023 2024 2025 2026 2027
Slide 39: Debt and Liquidity Forecast
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Expected Net leverage of 2.6x in 2024, expected liquidity over 20% from 2023 onwards Debt and Liquidity Forecast ▪ As a consequence of updated Business Plan as
Slide 40: Estimated Sources and Uses - Upon Exit and Emergence
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel 40 Updated Business Plan Updated Business Plan Estimated Sources and Uses - Upon Exit and Emergence Estimated Sources and Uses as of September 30th, 2022 Estimated Sources and Uses as of October 14th, 20
Slide 41: Expected Balance Sheet Pro Forma as of December 2022
HIGHLY CONFIDENTIAL Privileged Draft - Interim Work Product prepared at the direction of Counsel Updated Business Plan Updated Business Plan Estimated Balance Sheet Pro Forma as of December 2022 Expected Balance Sheet Pro Forma as of December 2022 2 ▪ Assuming exit financing in September 30th and ef
Slide 42: Updated Business Plan: 5 Years Business Plan Projection
Updated Business Plan LATAM AIRLINES GROUP 5 Years Business Plan Projection Subject to Applicable Confidentiality Agreements and Requirements August 2022 HIGHLY CONFIDENTIAL
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