Wizz Air Holdings Plc · LSE:WIZZ
Wizz Air — H1 FY2017 Earnings Presentation
28 slides from Wizz Air's earnings presentation, Nov 9, 2016
Slide 1: H1 F17 Financial Results
H1 F17 FINANCIAL RESULTS 9 NOVEMBER 2016
Slide 2: Business Highlights
BUSINESS HIGHLIGHTS • Passenger growth of 17%, Load Factor higher at 91% • #1 market position in CEE • Margin expansion (EBITDAR 41.9%, Net Profit 25.1%) • CASK ex-fuel well under control, declined 0.1% • Capacity discipline and well-diversified network absorbs revenue translation effect of Brexit •
Slide 3: Highly Diversified and Scalable Business
HIGHLY DIVERSIFIED AND SCALABLE BUSINESS H1 Performance Aircraft 73 (63) Flights 74,000+ Airports1 130 (116) Utilisation 13.4 hours Countries 38 (39) Punctuality Bases 78.4% 26 (22) Regularity Staff 99.9% 2,800+ (2,400+) Passengers 12.5 million (10.7mln) Source: Company Information, as of 30 Septemb
Slide 4: Strong H1 Financial Results
STRONG H1 FINANCIAL RESULTS For the six months ended 30 September Group Results 2016 2015 Change Revenue (€ m) 921.2 836.4 +10.1% EBITDAR (€ m) 385.9 306.1 +26.1% EBITDAR margin (%) 41.9% 36.6% +5.3ppt Net profit (€ m), (IFRS) 253.3 182.1 +39.1% Net profit margin (%), (IFRS) 27.5 21.8 +5.7ppt Underl
Slide 5: Strong Revenue Growth
STRONG REVENUE GROWTH Revenue Development Revenues increased 9.4% to €915m (€m) 1,429 • Ticket revenues + 4.1% • Non-Ticket revenues +21.3% 1,227 534 1,012 Load factor increased 0.4ppt to 91.1% 433 921 851 836 766 353 Airline RASK declined 8.5% 354 274 292 589 214 3 4 .9% 3 5 .3% 3 7 .4% • ASK growt
Slide 6: Increasing Our Cost Advantage
INCREASING OUR COST ADVANTAGE CASK Development (in € cents) Total CASK -11.0% 3.88 3.74 3.72 Fuel CASK Reduction • Lower oil prices -16.1% 3.61 3.51 3.46 3.43 Fuel 3.08 CASK Ex-Fuel CASK Reduction 1.58 1.49 1.48 1.36 • Stage length +2.3% 1.16 • Stronger US dollar 1.19 1.27 0.90 - $/€ 1.24 1.12 - 9
Slide 7: Continuous Cost Control
CONTINUOUS COST CONTROL Airline CASK for the six months ended 30 September € cent € cent € cent 2016 2015 Change Staff costs 0.27 0.27 - Fuel costs 0.89 1.27 (0.38) Distribution and marketing 0.06 0.07 (0.01) Maintenance, materials and repairs 0.18 0.23 (0.05) Depreciation and amortisation 0.11 0.07
Slide 8: Margin Expansion
MARGIN EXPANSION Underlying Net Income (€m) EBITDAR (€m) & Margin & Margin 41.9% 25.1% 24.6% 36.6% 385.9 231.6 205.9 306.1 H1 F17 H1 F16 H1 F17 H1 F16 Source: Unaudited Company Information 8
Slide 9: Liquidity and Leverage
LIQUIDITY AND LEVERAGE Free Cash1 as % of LTM Revenue Leverage2 53% 806 5.2 45% 46% 4.1 646 617 3.7 36% 449 2.6 1.6 18% 1.4 1.2 1.3 186 12% 14% 11% 103 83 85 F11 F12 F13 F14 F15 F16 H1 F16 H1 F17 F11 F12 F13 F14 F15 F16 H1 F16 H1 F17 Unaudited Company information. Note 1: Cash and Cash Equivalents (
Slide 10: Brexit – Actions Taken
BREXIT – ACTIONS TAKEN Last 15 months GBP/EUR Wizz Air H2 Capacity Exchange Rate on UK Markets 1.5 Pre-BREXIT 1.45 +30% +15% -8% 100% 1.4 50% 1.35 Redeployed on non-UK routes 1.3 1.25 50% 50% 1.2 41.9% 38.1% 1.15 Post-BREXIT 0% - 14% Pre Brexit Post Brexit 1.1 Jan Brexit May Aug Oct Nov Dec Apr Aug
Slide 11: Hedge Programme
HEDGE PROGRAMME Jet Fuel 80% US Dollar 80% 60% 60% 40% 40% 59% 60% 20% 20% 33% 32% 0% 0% F17 F18 F17 F18 Hedge Coverage 59% 33% Hedge Coverage 60% 32% Average capped rate $483 $526 Average capped rate $1.12 $1.14 Average floor rate $388 $477 Average floor rate $1.08 $1.11 Zero cost collar instrument
Slide 12: Outlook: Guidance Unchanged
OUTLOOK: GUIDANCE UNCHANGED 2017 Financial Year Comments Previous Capacity growth (ASKs) Between 18% - 20% H1: 20%, H2: Between 18% -20% 16% - 17% Average stage length + 2% - Modest increase Load Factor Modest improvement - No change Fuel CASK - 20% Assumes H2 spot price of $485/MT - 15% Ex-fuel CAS
Slide 13: CEE – A Unique Opportunity for Growth
CEE – A UNIQUE OPPORTUNITY FOR GROWTH Large Addressable Market Deregulation GDP Growth Weak Legacy Carriers Growing Growing LCC Market Propensity to Air Share Travel 13
Slide 14: Market Leading Position
MARKET LEADING POSITION* Ryanair Easyjet CEE 44% 36% 6% LCC Market Number 1 Number 2 Number 3 Poland Ryanair EasyJet Romania Blue Air Ryanair Hungary Ryanair EasyJet Czech Republic EasyJet Ryanair Lithuania Ryanair Wizz Air Norwegian Bulgaria Wizz Air Ryanair EasyJet Latvia Ryanair Wizz Air Norwegia
Slide 15: Increasing Ancillary Revenues
INCREASING ANCILLARY REVENUES Ancillary Income per pax increase by €0.4 to €27.8 Focus on value added services e.g.: €27.8 €27.4 - Wizz Discount Club - Allocated Seating - Plus Fare Revenue per passenger in € Ancillary 78.5 15.1 16.4 Ticket 72.7 74.5 73.2 71.5 68.1 69.0 51.1 48.2 45.0 47.3 44.8 46.8
Slide 16: Recent Ancillary Initiatives
RECENT ANCILLARY INITIATIVES New Initiatives Increasing Penetration Example: Assigned Seating Example: Members (in 000’s and % yoy growth)) + 26% + 41% 1024 + 29% 815 + 65% 580 + 35% 448 272 201 - Network-wide rollout May 19, 2015 F12 F13 F14 F15 F16 H1 F17 - Product and pricing refinements, 2016 Ex
Slide 17: De-Risked Growth Profile
DE-RISKED GROWTH PROFILE H1 FY17 Capacity Increasing Frequencies 56.5 % Joining Existing Airports 26.8 % New Airports 15.5 % New Destination Countries 1.1 % Source: Company Information 17
Slide 18: Summer 2017 Capacity
SUMMER 2017* CAPACITY Base Country Sep Sep 1 New Base To be allocated (# of Aircraft) ’17 ’16 Chisinau - Moldova Poland 21 20 Latvia Romania 20 17 Hungary 11 10 Lithuania Bulgaria 7 6 Lithuania 4 4 Macedonia 3 3 Latvia 2 2 Poland Serbia 2 1 Bosnia 2 1 Ukraine 1 1 Czech R. Czech Republic 1 1 Ukraine
Slide 19: F17 Network Development
F17 NETWORK DEVELOPMENT Route Origins: 70 new routes announced in H1 Poland 17 Romania 17 Bosnia-Herzegovina 8 Hungary 8 Destinations: Serbia 7 Germany 7 Bulgaria 5 Spain 6 Moldova 2 Italy 6 Ukraine 2 UK 4 Lithuania 2 France 3 Georgia 1 Portugal 3 Macedonia 1 Norway 2 Denmark 1 Switzerland 1 Slovaki
Slide 20: Cost Advantage from A321
COST ADVANTAGE FROM A321 Fleet Fleet Development 73 194 200 100 190 93 190 183 63x 10x* 79 180 80 26 A320 A321 67 16 170 4 60 Airbus Order 160 • 110 A321neo 40 150 deliveries from 2019 63 63 67 (90 additional option) 140 20 • Right to substitute 130 certain A321neo for A320neo 0 120 F16 F17 F18 • Ne
Slide 21: Closing Comments
CLOSING COMMENTS • Passenger growth of 17% to 12.5m pax • #1 market position in CEE • Margin expansion (EBITDAR 41.9%, Net Profit 25.1%) • CASK ex-fuel well under control, declined 0.1% • Re-Confirming guidance of €245 – €255 million *Excluding exceptional items 21
Slide 22: The World of Opportunity
THE WORLD 3 OF OPPORTUNITY ~ S > BEGINS WITH A SMILE ¥: ye a wizzair.com
Slide 23: Q2 Financial Highlights
Q2 FINANCIAL HIGHLIGHTS (€m) Q2 2017 Q2 2016 Change Passenger ticket revenue 355.2 338.7 + 5% Ancillary revenue 201.1 165.2 + 22% Total revenue 556.3 503.9 + 10% Fuel costs 98.8 117.2 - 16% Other expenses 250.3 208.6 +20% Total operating expenses 349.1 325.8 + 7% Operating Profit / (Loss) 207.2 178.
Slide 24: Q2 Financial Results
Q2 FINANCIAL RESULTS For the three months ended 30 September Group Results 2016 2015 Change Revenue (€ m) 556.3 503.9 +10.4% EBITDAR (€ m) 277.6 229.4 +21.0% EBITDAR margin (%) 49.9% 45.5% +4.4ppt Net profit (€ m), (IFRS) 202.6 149.3 +35.7% Underlying net profit after tax* (€ m) 193.0 172.0 +12.2% N
Slide 25: Balance Sheet
BALANCE SHEET € million Q2 F17 FY 16 Change Property, plant and equipment 378.0 353.6 4.9% Restricted cash1 129.8 101.6 27.8% Derivative financial instruments1 6.4 1.7 382.4% Trade and other receivables1 194.4 197.7 3.5% Cash and cash equivalents 805.5 645.6 24.8% Other assets1 35.9 31.6 13.3% Total
Slide 26: Underlying Performance
UNDERLYING PERFORMANCE € million For the six months ended 30 September H1 F17 H1 F16 Statutory (IFRS) profit measure 253.3 182.1 Adjustments (exclusions): Unrealised foreign currency loss/(gain) (0.4) 16.0 Exceptional items (financial expense) (21.4) 7.8 - Change in time value of hedge positions, (g
Slide 27: Selected KPI's
SELECTED KPI’S H1 F17 H1 F16 Change CAPACITY Number of aircraft at end of period 73 63 15.9% Equivalent aircraft 70 60 15.0% Utilisation 13.4 13.3 1.0% Total block hours 170,641 146,894 16.2% Total flight hours 148,224 127,326 16.4% Revenue departures 74,343 65,297 13.9% Average departures per day p
Slide 28: Disclaimer
DISCLAIMER This presentation has been prepared by Wizz Air Holdings Plc (the Company). By receiving this presentation and/or attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations. This presentation is intended