Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — FY2020 Earnings Presentation
33 slides from Japan Airlines's earnings presentation, May 7, 2021
Slide 1: Financial Results MAR/2021 (FY2020)
JAPAN AIRLINES Co., Ltd. Financial Results MAR/2021（FY2020） (1) (2) The first airline in Asia to be best-awarded in the two safety ratings May 7, 2021 (1) Awarded Diamond Certification for the first time to a Japanese airline by APEX Health Safety powered by SimpliFlying in COVID-19 safety measures
Slide 2: Agenda and accounting notes
SKYTRAX SKYTRAX 2019 The World’s Best Economy Class 5-Star Airline The Best Economy Class Seat The 8th 1. PERFORMANCE OVERVIEW FOR MAR/21 APEX SKYTRAX IR Good Visual Award Health Safety Powered Covid-19 Safety Rating by SimpliFlying Audit 2. MAR/22 5-Satr Diamond 3. DETAILS OF FINANCIAL RESULTS FOR
Slide 3: Performance Overview for MAR/21
PERFORMANCE OVERVIEW FOR MAR/21 ✓ Large drop in revenue due to the COVID-19 pandemic ✓ Despite the cost reduction efforts, we were unable to cover the decline in revenue and posted a significant loss Revenue(1) EBIT (1)(2)/Profit or Loss (1)(3) （JPY Bn） （JPY Bn） 1,600.0 EBIT Profit or Loss 1,385.9 2
Slide 4: CFO commentary on full-year results
➢ This is CFO Kikuyama. ➢ I will explain the full-year results of the fiscal year 2020 and the current demand outlook. ➢ The full-year result became 481.2 billion yen of Revenue, down by 65.3% year- on-year, a loss of 398.3 billion yen of EBIT and Net Loss of 286.6 billion yen. ➢ Please turn to Page
Slide 5: MAR/22
1. PERFORMANCE OVERVIEW FOR MAR/21 2. MAR/22 3. DETAILS OF FINANCIAL RESULTS FOR MAR/21 4. REFERENCES ©Japan Airlines, ALL rights reserved. 4
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Slide 7: FY21 Full-year Performance Forecast
FY21 Full-year Performance Forecast No forecast cannot be provided but a break-even matrix is shown as below ✓ FY2021 full year performance forecast cannot be provided because International Passenger Demand is not foreseeable due to COVID-19 ✓ However, EBIT & EBITDA(1) break-even Int’l PAX/Domestic
Slide 8: Commentary on forecast and break-even matrix
➢ It is very difficult to foresee recovery of passenger demand, especially International Passenger demand currently due to COVID-19, therefore we cannot provide our full-year performance forecast as well as dividend forecast for this fiscal year . ➢ Instead, we created an illustrative break-even dem
Slide 9: FY21 Recent Outlook
FY21 Recent Outlook Int’l/Domestic Passenger Operations (Full Service Carrier), Cargo / Mail ✓ International Passenger remains at a low level due to travel restrictions ✓ Domestic passenger demand still remains unclear ✓ In Cargo and Mail, demand is captured as much as possible through more than 1,0
Slide 10: Commentary on demand outlook
➢ On this slide, current demand outlook will be updated. ➢ Yet, there is no sign of recovery for International Passenger. We will keep a close eye on infection numbers and vaccination in each country. ➢ Domestic Passenger was bottomed out in February, however, it has been sluggish again due to the c
Slide 11: Initiatives for liquidity at hand
Initiatives for liquidity at hand Liquidity and cash burn ✓ Enough liquidity level of more than 700 billion yen including unused credit line as of the end of March 2021 ✓ FY20/Q4 Cash burn was about 15～20 billion yen per month. Strong cargo demand and less refund will lead improved cash burn going f
Slide 12: Commentary on liquidity and cash burn
➢ On this slide, I will explain liquidity at hand and cash burn. ➢ As of the end of March, Liquidity at hand is more than 700 billion yen, 408.3 billion of cash and unused credit line of 300 billion yen. ➢ In addition to a good cargo demand, a base demand was secured in Domestic Passenger and cash i
Slide 13: Cost Management
Reposted from the FY2021-2025 Mid-term Management Plan disclosed on May 7, 2021 Business Cost Management Flexible Variable Cost Management and Fixed Cost Reduction through Structural Reforms and further Streamlining and Productivity Improvement Past Measures • Thorough structural reforms, followed b
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Slide 15: Details of Financial Results for MAR/21
1. PERFORMANCE OVERVIEW FOR MAR/21 2. MAR/22 3. DETAILS OF FINANCIAL RESULTS FOR MAR/21 4. REFERENCES ©Japan Airlines, ALL rights reserved. 9
Slide 16: Consolidated Financial Results
DETAILS OF FINANCIAL RESULTS FOR MAR/21 Consolidated Financial Results (1) 4th Quarter （JPY Bn） FY2019 FY2020 Diff. y/y (Jan-Mar)(6) Diff. y/y Revenue 1,385.9 481.2 ▼904.6 ▼65.3％ 124.6 ▼148.5 ▼54.4％ International Passenger 486.2 27.9 ▼458.2 ▼94.2％ 9.1 ▼75.7 ▼89.3％ Domestic Passenger 529.7 174.0 ▼355
Slide 17: Changes in EBIT (Revenues/Expenses)
DETAILS OF FINANCIAL RESULTS FOR MAR/21 Changes in EBIT (Revenues／Expenses) (1) (2) ASK y/y： ▼64.8% ＋ stands for profit increase (revenue increase, cost decrease) RPK y/y： ▼84.3％ ▼ stands for profit decrease (revenue decrease, cost increase) ▼4,871億円 ▼487.1Bn （JPY Bn） 88.8 FY2019 Int’l Passenger ▼45
Slide 18: Commentary on revenue and costs
➢ On this slide, ups and downs of revenue and costs are shown. ➢ While International Passenger and Domestic Passenger revenue decreased significantly, Cargo and Mail revenue increased greatly by 40.6% year-on-year. Other revenue that includes mileage business did not drop as much as Passenger revenu
Slide 19: International/Domestic Passenger Operations
DETAILS OF FINANCIAL RESULTS FOR MAR/21 Int’l/Domestic Passenger Operations (Full Service Carrier) ✓ Int’l Passenger remained low throughout this fiscal year due to travel restrictions ✓ Domestic Passenger dropped due to the third wave but base demand was captured International Passenger (1) Domesti
Slide 20: Commentary on passenger results
➢ On this slide, International Passenger and Domestic Passenger results are shown. ➢ International Passenger demand was very low throughout a year, but Domestic Passenger demand remained about 40% of pre-COVID level in March because we were able to secure a base demand in spite of the third wave of
Slide 21: Cargo / Mail
DETAILS OF FINANCIAL RESULTS FOR MAR/21 Cargo / Mail ✓ Price levels remained high due to demand-tight situations continued and Cargo revenue increased significantly (yoy+40.6%) in spite of the limited passenger flights. ✓ Cargo flights utilizing passenger aircrafts totaled at 15,299 throughout this
Slide 22: Commentary on cargo and mail
➢ On this slide, Cargo and Mail result is shown. ➢ International cargo demand is very strong currently and it is expected to continue. We operated more than 15,000 of cargo flights using passenger aircrafts. Also we chartered freighter flights. ➢ Please turn to Page 14. ©Japan Airlines, ALL rights r
Slide 23: Major Operating Expense Items
DETAILS OF FINANCIAL RESULTS FOR MAR/21 Major Operating Expense Items (1) ✓ Reduced revenue- and capacity-linked costs, equivalent of approximately 41% of reduced revenue (368.0 Bn JPY) ✓ Fixed cost is steadily reduced by about 135 billion yen from the original plan 4th Quarter （JPY Bn） FY2019 FY202
Slide 24: Commentary on major expenses
➢ On this slide, major expense results are shown. ➢ Our cost reductions efforts are succeeding . ➢ Variable costs were reduced by 368 billion yen, equivalent to about 41% of the reduced revenue. ➢ Fixed costs were reduced by 135 billion yen from the initial plan. This is 15 billion yen more than our
Slide 25: Summary of Statement of Financial Position and Cash Flow
DETAILS OF FINANCIAL RESULTS FOR MAR/21 Summary of Consolidated Statement of Financial Position and Cash Flow (1) ✓ Equity of 947.4 billion yen and Debt-Equity Ratio of 45.0% were secured in a difficult situation BS ✓ Interest-bearing debts including lease payment is 515.1 bn. yen and repayment with
Slide 26: Commentary on balance sheet and cash flow
➢ On this slide, Balance sheet and Cash flow results are shown. ➢ We were able to maintain a good level of equity ratio and D/E ratio in this severe situation. ➢ CAPEX was reduced by more than 100 billion yen from the original plan to 97.8 billion yen. ➢ Further slides are for your reference, but I
Slide 27: References
1. PERFORMANCE OVERVIEW FOR MAR/21 2. MAR/22 3. DETAILS OF FINANCIAL RESULTS FOR MAR/21 4. REFERENCES ©Japan Airlines, ALL rights reserved. 16
Slide 28: Operation Performance by Geographic Segment
《Reference》 Operation Performance by Geographic Segment (Full Service Carrier) Passenger Revenue (1) Revenue Passengers Carried (1) (2) 4Q Component Ratio 4Q (3Months) (%) FY2020 3Months (‘000) FY2019 FY2020 y/y y/y 4Q FY2020 y/y y/y FY2019 FY2020 3Months America 1,511 102 ▼93.2% 37 ▼87.6% America ▼
Slide 29: Fleet Information
《 Reference 》 Fleet Information End of Mar/20 (March 31, 2020) End of Mar/21 (March 31, 2021) Diff. Owned Leased Total Owned Leased Total 1 Total 2 retired aircraft Total2 of Mar/21 - excluded Mar/20 Airbus A350-900 4 1 5 4 4 8 8 +3 Boeing 777-300ER 13 0 13 13 0 13 13 - (2) Boeing 777-300 4 0 4 4 0
Slide 30: Commentary on fleet
➢ The total number of fleets as of the end of March 2021 is 237, however, out of this 237, 19 fleets are already determined to retire. Out of 19 retiring fleets, 18 are Boeing 777. ➢ Therefore, the actual number of fleets as of the end of March is 218, which is shown in Total 2. ➢ Since the retiring
Slide 31: Accounting Impact by IFRS Adoption
《Reference》 Accounting Impact by IFRS Adoption Profit/Loss Statement ◼ Due to changes in accounting rules for mileage points, revenue allocated to mileage points is deferred as a liability, and recognized when miles are redeemed (The impacts to Profit/loss are limited) ◼ Our main index for performan
Slide 32: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines ©Japan Airlines, ALL rights reserved. 20
Slide 33: Disclaimer
Disclaimer This content contains descriptions of the future expectations, outlooks, objectives and plans etc. of Japan Airlines Co., Ltd. (hereafter "the company") and related Group companies (hereafter "the Group"). These are based on information available at the time when these materials were crea