Grupo Aeromexico, S.a.b. De C.v. · BMV:AERO
Grupo Aeromexico, S.a.b. De C.v — Investor Presentation (December 2014)
24 slides from Grupo Aeromexico, S.a.b. De C.v's investor presentation, December 2014
Slide 1: Enhancing Value: Above & Beyond
ENHANCING VALUE 7 @ ABOVE & BEYOND a Ze
Slide 2: Aeromexico: Mexico's Premium Revenue Carrier
AEROMEXICO: MEXICO’S PREMIUM REVENUE CARRIER Leading airline in Mexico Only Full Service Carrier / Two-class Service and Hub and Spoke Model Strongest position in slot constrained Mexico City airport 84 destinations in 22 countries, over 610 daily flights Enhanced strategic alliances with Delta Air
Slide 3: Strengthening Mexican Economy with Structural Reforms in Place
STRENGTHENING MEXICAN ECONOMY WITH STRUCTURAL REFORMS IN PLACE Growth Opportunities for Mexican Economy(1) Air Traffic Penetration Flights Per Capita for Middle & Upper Class Population (>$15K) 6% 5% 2.4 4% 3% 1.4 2% 1% 0.8 0.6 0.6 0% 2015 E 2016 E 2017E 2018E 2019E Difference Mexico China Brazil Eu
Slide 4: Uniquely Positioned to Deliver Profitable and Sustainable Growth
OUR FLIGHT PLAN PROFITABLE AND SUSTAINABLE GROWTH PRODUCTIVITY & OPERATIONAL COST CONTROL EXCELLENCE STRATEGIC PARTNERSHIPS FINANCIAL STRENGTH AND COMMERCIAL RISK PROFILE VALUE CREATION Uniquely Positioned to Deliver Profitable and Sustainable Growth 4
Slide 5: Operational Excellence
OPERATIONAL EXCELLENCE On-Time Departure (within 15 minutes) Mishandled Baggage Complaints Per 1,000 passengers Airline Ranking Rank US Operations YTD July-14 1 Virgin America 0.98 2 Frontier Airlines 1.80 3 Jetblue Airways 2.09 4 Hawaiian Airlines 2.20 5 Aeroméxico 2.23 6 Alaska Airlines 2.48 7 Del
Slide 6: Commercial Value Creation: Strengthening Our Network
COMMERCIAL VALUE CREATION: STRENGTHENING OUR NETWORK Strategy Focus on Increasing Connectivity Improving Connectivity Securing Position in Mexico City Market Solidify Position with Shuttle Product • Create sustainable defendable position in • Increase connecting banks from 4 to 12 • Launch of a shut
Slide 7: Strong Growth Potential in Mexico City Despite Slot Constraints
COMMERCIAL VALUE CREATION: STRONG GROWTH POTENTIAL IN MEXICO CITY DESPITE SLOT CONSTRAINTS Average Seat Today Configuration 50 E-145* 84% of 2013 81 E-170 / 175 operations in Mexico City were performed 99 with regional jets E-190 (E145/170/190) and +56% Seat 737-700 737-800 Count 124 737-700 Up-gaug
Slide 8: Commercial Value Creation: Strengthening Monterrey Hub
COMMERCIAL VALUE CREATION: STRENGTHENING MONTERREY HUB Driving Worldwide Connectivity and New Destinations in Monterrey • Strengthening presence in existing destinations and connecting Mexico regions of Bajio, Northwestern and Southeast as well as United States. • 4 connecting banks structure implem
Slide 9: Balanced Revenue Management Strategy
COMMERCIAL VALUE CREATION: BALANCED REVENUE MANAGEMENT STRATEGY Revenue Management Strategy focused on RASK • Competitive pricing with better segmentation to drive volume while protecting yields • Capturing marginal VFR and leisure passengers with competitive pricing in advance purchase • Building s
Slide 10: Commercial Value Creation: Positive Momentum
COMMERCIAL VALUE CREATION: POSITIVE MOMENTUM Strong 2014 performance, with passenger traffic growth of 13.1% as of October and load factor increase of over 350 bps YoY. Passenger Traffic Monthly Var % YoY 21.8% 18.8% 18.3% 18.7% 16.9% 16.7% 13.5% 12.3% 10.6% 10.5% 8.9% 7.5% 6.8% 6.2% 6.8% 3.2% 0.6%
Slide 11: Positive Momentum in Market Share
COMMERCIAL VALUE CREATION: POSITIVE MOMENTUM IN MARKET SHARE Market Share YTD Oct 14 Total Domestic International Aeromar Magnicharter 1.6% 3.1% Viva Aerobus 11.8% Others Others 26.2% 32.4% 16.7% 40.2% 36.4% 15.9% 23.1% 14.2% 15.3% 23.7% 2.7% 13.3% Viva Aerobus 5.1% Alaska 6.0% 4.7% 7.2% Aeromexico´
Slide 12: Meriting Revenue Premium Over Competitors
COMMERCIAL VALUE CREATION: MERITING REVENUE PREMIUM OVER COMPETITORS Aeromexico’s full-service model and broad international network allow it to realize premiums over competitors. RASK YTD September 14– Stage Length Adjusted USD cents Domestic Industry International Industry 11.83 11.26 10.48 10.07
Slide 13: Solid Financial Profile
SOLID FINANCIAL PROFILE Aeromexico has proven its ability to cut costs and operate at a world-class level. Management focus on improving productivity has allowed Aeromexico to reach top industry performance. CASK YTD September 14 (Stage Length Adjusted) (1) USD Cents Domestic Industry International
Slide 14: Productivity and Cost Control Initiatives
PRODUCTIVITY AND COST CONTROL INITIATIVES Strong pipeline of cost reduction initiatives. Operational , Administrative & Labor Costs Fleet Strategy Sales Efficiencies • Restructuring and Integration of • New contracts with pilots, flight • Fleet Renewal AM/AM Connect attendants and ground staff • Bal
Slide 15: Productivity and Cost Control Initiatives: Fleet Strategy
PRODUCTIVITY AND COST CONTROL INITIATIVES: FLEET STRATEGY Fleet Plan renewal provides CASK efficiencies, maintaining flexibility and reducing ownership cost. Fleet Plan Estimated CASK Reduction (1) Today 2018 EJ170 & ERJ145 B737-7 B737-8 B767 B787 E190 100 100 100 E-145 (14%) (19%) (16%) E-170/190 8
Slide 16: Current Fleet
CURRENT FLEET Fleet Type 4Q13 3Q14 ERJ145 30 26 E170/175 7 9 E190 20 27 Aeromexico Connect 57 62 B737-700 28 24 B-37-800 19 23 B777 4 4 B787 3 5 B767 6 5 Aeromexico 13 61 Total Grupo Aeroméxico 117 123 16
Slide 17: Solid Financial and Risk Profile: Comprehensive Risk Management
SOLID FINANCIAL AND RISK PROFILE: COMPREHENSIVE RISK MANAGEMENT Fuel Hedging Strategy Economic Cycle • Over 50% of expected fuel consumption for the Aircrafts next 12 months is hedged • Fuel surcharges complement Grupo Aeromexico’s hedging strategy Fleet plan flexibility Year Reduced Exposure Stagge
Slide 18: Solid Financial Debt Profile
SOLID FINANCIAL DEBT PROFILE Debt Maturity Profile (1) USD millions Adjusted EBITDAR LTM as of September 2014: USD 558 M 9.4% 9.5% 10.1% 9.6% 61.4% 90 239 42 21 18 26 8 25 34 34 2014 2015 2016 2017 2018+ Benchmark Financial Net Debt / Adjusted EBITDAR (2) 8.1x 7.1x * 5.3x 4.8x 4.6x 4.4x* 3.4x 2.9x 1
Slide 19: Strong Brand with Strategic Partnerships
STRONG BRAND WITH STRATEGIC PARTNERSHIPS Strategic alliances have contributed to Aeromexico’s increased connectivity and premium product. Only Mexican carrier in an international alliance. Delta Alliance Club Premier Loyalty Program • In 2012, Delta invested USD $65mm in Aeromexico, equivalent to •
Slide 20: Thank You
Thank You Investor Relations Contact Information investor.relations@aeromexico.com Tel (+52) 55 9132 4257 Luz Montemayor lmontemayor@aeromexico.com Daniel Frias dfrias@aeromexico.com DISCLAIMER This presentation is neither an offer for sale nor a request to buy any securities. Such offer or request
Slide 21: Aeromexico Consolidated Statements of Operations
AEROMEXICO CONSOLIDATED STATEMENTS OF OPERATIONS YTD September % of MXN millions 2012 2013 2014 Revenues Passenger 35,255 35,509 27,690 88.4 Cargo 2,123 2,052 1,785 5.7 Others 1,850 2,289 1,850 5.9 Total Revenues 39,228 39,850 31,325 100.0 Labor 7,941 8,434 6,586 21.0 Fuel 13,063 12,906 10,589 33.8
Slide 22: Aeromexico Balance Sheet
AEROMEXICO BALANCE SHEET As of September 30 MXN millions 2012 2013 2014 Cash and Cash Equivalents 1,856 3,057 4,003 Prepayments and Deposits 935 1,053 1,201 Other Currents Assets 4,760 4,512 4,836 Total Current Assets 7,551 8,621 10,040 Property and Equipment 11,912 14,241 14,657 Non-current Prepaym
Slide 23: Aeromexico Adj. EBITDAR Reconciliation
AEROMEXICO ADJ. EBITDAR RECONCILIATION YTD September MXN millions 2012 2013 2014 Net Income 1,323 1,080 22 Profit attributable to non-controlling interest 0 -0.2 0 Income tax expenses 360 138 66 Depreciation and Amortization 1,417 1,554 1,230 Effects from associated companies 131 -12 162 Other incom
Slide 24: Aeromexico Operating Statistics
AEROMEXICO OPERATING STATISTICS YTD September 2012 2013 2014 Passengers (millions) 14.8 15.5 12.8 Total ASKs (millions) 30,724 32,496 26,897 Total RPKs (millions) 22,930 24,474 21,472 Load Factor (%) 76.6 77.2 80.2 RASK 1.277 1.226 1.165 PRASK 1.16 1.11 1.05 Yield (mexican pesos) 1.56 1.47 1.34 CASK
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