Wizz Air Holdings Plc · LSE:WIZZ
Wizz Air — Q3 FY2016 Earnings Presentation
25 slides from Wizz Air's earnings presentation, Jan 27, 2016
Slide 1: F16 Q3 Results
Half Year F1 Results November 4, 2015 F16 Q3 Results 27 JANUARY 2016
Slide 2: Business Highlights
BUSINESS HIGHLIGHTS • Passenger growth of 23% to 4.7m pax • Building on our strong market leadership in CEE • Record Q3 underlying profitability • Increasing our cost advantage • Continued growth in ancillary revenues • Enhancing our customer offering and experience • Order for 110 Airbus A321neo ap
Slide 3: Delivering Q3 Operational Performance
DELIVERING Q3 OPERATIONAL PERFORMANCE Aircraft 65 Airports Schedule 116 Integrity Countries 38 Utilisation 11.9 hours Bases 22 Punctuality 84.5% Staff 2,600+ Regularity 99.8% Passengers 4.7 million Dispatch 99.9% Flights 30,000+ Source: Company Information. 3
Slide 4: Strong Q3 Financial Results
STRONG Q3 FINANCIAL RESULTS For the three months ended 31 December 2015 2014 Change Revenue (€ m) 310.5 264.6 17.3% Net profit (€ m), (IFRS) 15.6 19.7 - 20.9% Underlying net profit after tax* (€ m) 17.2 3.6 376.5% EBITDAR Margin (%) 24.0 18.9 5.1ppt Underlying profit margin* (%) 5.5 1.4 4.1ppt CASK
Slide 5: Strong Revenue Growth
STRONG REVENUE GROWTH Total Revenue increased Revenue Development 1,227 17.3% to €310m (€m) • Total Ticket revenues increased 12.4% 1,012 433 • Total Ancillary revenues increased 25.8% 851 Load factor increased 766 353 1.1ppt to 85.7% 274 400 214 (€m) 589 350 310 165 300 265 32.9% 250 3 4 .9% 3 5 .3
Slide 6: Increasing Our Cost Advantage
INCREASING OUR COST ADVANTAGE CASK and ex-fuel CASK development Challenges € cents 3.88 • Inflationary pressures 3.74 3.72 3.61 3.67 3.51 3.40 • Infrastructure costs 1.49 1.58 1.48 1.36 1.33 • US dollar strength 1.19 1.11 Opportunities • Fleet development 2.32 2.34 2.25 2.29 2.25 2.26 2.30 • Economi
Slide 7: Continuous Cost Control
CONTINUOUS COST CONTROL CASK for the three months ended 31 December € cent € cent € cents 2015 2014 change Staff costs 0.30 0.31 (0.01) Fuel costs 1.11 1.33 (0.22) Distribution and marketing 0.07 0.06 0.01 Maintenance, materials and repairs 0.21 0.28 (0.07) Aircraft rentals 0.54 0.49 0.05 Depreciati
Slide 8: Margin Expansion
MARGIN EXPANSION EBITDAR (€m) & Margin Underlying Net Income (€m) & Margin* +49% +377% 17.2 74.4 49.9 24.0% 146 5.5% 18.9% 3.6 1.4% Q3 F16 Q3 F15 Q3 F16 Q3 F15 Source: Company Information * Excluding unrealised FX gains/losses and exceptional items 8
Slide 9: Liquidity and Leverage
LIQUIDITY AND LEVERAGE Free Cash1 as % of LTM Revenue Leverage2 45% 5.2 580 36% 4.1 449 3.7 27% 320 2.6 18% 2.0 1.6 186 1.4 12% 14% 11% 103 83 85 F11 F12 F13 F14 F15 Q3 F15 Q3 F16 F11 F12 F13 F14 F15 Q3 F15 Q3 F16 Company information. Note 1: Cash and Cash Equivalents (€m) Note 2: Leverage is define
Slide 10: Hedge Programme
HEDGE PROGRAMME 80% Jet Fuel 80% US Dollar 60% 60% 25% 40% 40% 55% 67% 20% 41% 20% 43% 6% 0% 0% F16 F17 F16 F17 Hedge Coverage 67% 61% Hedge Coverage 67% 43% Average capped rate $754 $676 Average capped rate $1.21 $1.13 Average floor rate $744 $672 Average floor rate $1.15 $1.09 Zero cost collar ins
Slide 11: Outlook: FY16 Guidance Raised
OUTLOOK: FY16 GUIDANCE RAISED Full Year 2016 Previous Guidance* Capacity growth (ASKs) 18% 18% Average stage length Unchanged Unchanged Load Factor Modest improvement Modest improvement Fuel CASK - 13.0 % - 6.0 % Ex-fuel CASK Between 0% and +1.0 % +1.0 % Total CASK - 3.0 % -1.5 % Revenue per ASK Dow
Slide 12: CEE – A Unique Opportunity for Growth
CEE – A UNIQUE OPPORTUNITY FOR GROWTH Large Addressable Market Weak Legacy Deregulation GDP Growth Carriers Growing Growing LCC Market Propensity to Air Share Travel 12
Slide 13: De-risked Growth Profile
DE-RISKED GROWTH PROFILE Q3 Capacity Existing Routes – Increasing Frequencies 61.5 % New Routes – Existing Airports in Network 27.9 % New Routes – New Airports 7.6 % New Routes – New Destination Countries 3.0 % Source: Company Information. Capacity added in the third quarter of F16 13
Slide 14: Summer 2016 Capacity
SUMMER 2016* CAPACITY To be allocated 2 New Base 10 New Destinations Debrecen (Hungary) Germany (2), Italy (1), Iasi (Romania) France (1), Spain (2), Latvia Slovakia (1), Denmark (1), Maintenance / Lithuania (2) Lithuania Spare Poland Base Country Sep’ Sep (# of Aircraft) 16 ’15 Poland 21 19 Romania
Slide 15: Enhancing Customer Offering and Experience
ENHANCING CUSTOMER OFFERING AND EXPERIENCE Investments into employee and customer loyalty • New Website launching in Spring 2016 • 24 languages on wizzair.com (Georgian in Q1 F17) • 11 languages on our mobile apps (RU, ESP, SWE in Q4 F16) • Continue to build a loyal customer base - 700k Wizz Discoun
Slide 16: A321neo Order: Fleet Growth Secured
A321 NEO ORDER FLEET GROWTH SECURED • 110 A321neo deliveries from 2019 96% 100% 175 92% 85% 225 • Uncommitted 76% purchase rights to 150 buy up to 90 55% 62% 152 additional A321neo 48% 140 205 125 aircraft 36% 136 • Right to substitute 100 119 185 certain A321neo for 102 A320neo 99 75 91 • Cancellat
Slide 17: Closing Comments on Q3
CLOSING COMMENTS ON Q3 • Record underlying net profit • Passenger growth of 23% to 4.7m pax • Ex-fuel CASK declined 2.0% • Ancillary revenue per passenger increased by 2.1% • Underlying net profit margin expansion of 4.1% • FY 2016 underlying net profit guidance range raised by €10m to between €200m
Slide 18: The World of Opportunity Begins with a Smile
THE WORLD e OF OPPORTUNITY ~ $ > BEGINS WITH A SMILE ¥: aa wizzair.com
Slide 19: Market Leading Position
MARKET LEADING POSITION* Ryanair Easyjet CEE 42% 33% 6% LCC Market Number 1 Number 2 Number 3 Poland Ryanair Norwegian Romania Blue Air Ryanair Hungary Ryanair Easyjet Czech Republic Easyjet Ryanair Lithuania Ryanair Wizz Air Norwegian Bulgaria Wizz Air Easyjet Transavia Latvia Ryanair Wizz Air Norw
Slide 20: Underlying Performance
UNDERLYING PERFORMANCE € million For the three months ended 31 December 2015 2014 Statutory (IFRS) profit measure 15.6 19.7 Adjustments (exclusions): Unrealised foreign currency gain (2.5) (3.3) Time value (gain) / loss on open hedge positions 4.1 (12.9) Total exceptional adjustments 1.5 (16.1) Unde
Slide 21: Q3 Financial Highlights
Q3 FINANCIAL HIGHLIGHTS For the three months ended 31 December € millions 2015 2014 Change Passenger ticket revenue 187.1 166.5 + 12% Ancillary revenue 123.4 98.1 + 26% Total revenue 310.5 264.6 + 17% Fuel costs 94.0 92.2 + 2% Other expenses 195.1 162.4 + 20% Total operating expenses 289.0 254.6 + 1
Slide 22: Quarterly Underlying Financial Performance
QUARTERLY UNDERLYING FINANCIAL PERFORMANCE (in €000’s) Q1 F15 Q2 F15 Q3 F15 Q1 F16 Q2 F16 Q3 F16 Passenger ticket revenue 192,951 294,976 166,494 205,897 338,669 187,063 Ancillary revenue 102,201 137,171 98,106 126,596 165,245 123,410 332,493 503,914 310,474 Total revenue 295,153 432,148 264,600 Sta
Slide 23: Selected Quarterly KPI's
SELECTED QUARTERLY KPI’S Q1 F15 Q2 F15 Q3 F15 Q1 F16 Q2 F16 Q3 F16 CAPACITY Number of aircraft at end of period 52 54 55 62 63 65 Equivalent aircraft 49 53 54 58 63 64 Utilisation 13.2 13.8 11.6 13.1 13.5 11.9 Total block hours 58,882 67,228 57,323 68,998 77,895 69,795 Total flight hours 51,130 58,3
Slide 24: Planned Fleet Development
PLANNED FLEET DEVELOPMENT Seat count F15 F16 F17 F18 F19 F20 F21 F22 F23 F24 A320 180 35 35 35 35 24 15 10 5 - - A320ceo with winglets 180 20 28 28 32 39 39 39 37 26 22 A321ceo with winglets 230 - 4 15 24 27 27 27 27 27 27 A320neo - - - - - - - - - - - A321neo 230 - - - - 9 17 17 17 17 17 A321neo 23
Slide 25: 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