Icelandair Group Hf · OMXICE:ICEAIR
Icelandair Group Hf — FY2021 Earnings Presentation
31 slides from Icelandair Group Hf's earnings presentation, Feb 4, 2022
Slide 1: Q4 and 12M 2021 results
Q4 and 12M 2021 results 4 February 2022 1
Slide 2: Highlights
Highlights Improved operating Liquidity and financial Ambitious Stronger Icelandair result in Q4 2021 position strong plans for 2022 ready for the new normal Load factor 70.3% Total liquidity USD 80% of 2019 production New organizational structure 435.0 million to execute strategic initiatives EBIT
Slide 3: Financials
Financials Ívar Sigurður Kristinsson, CFO 3
Slide 4: EBIT improved by USD 24.6 million
EBIT improved by USD 24.6 million Driven by increased demand, improved load factor and strong cargo operation Profit loss statement EBIT USD million USD million USD million Q4 2021 Q4 2020 Change Transport revenue 156.5 37.8 118.6 • Operating income more than tripled between Aircraft and aircrew lea
Slide 5: Continued capacity growth
Continued capacity growth Cargo operation exceeded pre covid levels Capacity as % of 2019 No of passengers and mix Freight ton kilometers Sold block hours Total ASK* per quarter 2021 Q4 2020 vs Q4 2021 in thousands FTK ´000 Leasing operation 933 65% 39,774 7,316 40% 33,500 50% 31,502 545 18% 45% 3,3
Slide 6: Positive RASK development between quarters
RASK US cent Positive RASK 4% 6.9 development 6.7 between 5.6 quarters despite Improved load factor driving increased negative impact passenger revenue US opened up for of Omicron EU traffic in November Strong Cargo revenue Q2 2021 Q3 2021 Q4 2021 6 RASK = Revenue per Available Seat Kilomeer
Slide 7: CASK increasing in Q4 due to seasonal fluctuations
CASK US cent CASK increasing 15.2 in Q4 due to seasonal fluctuations in +31% production and 8.7 preparing for 6.6 23% less production than in Q3 larger 2022 12% higher fuel price Unusual seasonality in salary cost due to MAX pilot onboarding and rebuilding of support functions Q2 2021 Q3 2021 Q4 202
Slide 8: 91% higher average fuel price and more production driving higher fuel cost
91% higher average fuel price and more production driving higher fuel cost Fuel cost Average fuel price Open hedge contracts USD million USD per ton Overview tons (hedge %) +35.7 900 42.5 800 20,553 700 Average fuel price 600 91% higher in Q421 vs Q420 500 11,678 400 23% 300 200 29% 2020 6.8 100 202
Slide 9: Net cash from operations positive of USD 6 million in Q4 2021
Net cash from operations positive of USD 6 million in Q4 2021 Total liquidity Liquidity, less Government facility Breakdown in USD million Development in Q4 2021 in USD million 454 435 120 120 334 6 4 6 52 52 15 60 58 334 315 315 Government guaranteed credit facility 217 205 Undrawn revolving facili
Slide 10: Full-year 2021 net loss decreasing by USD 271 million
Full-year 2021 net loss decreasing by USD 271 million Profit loss statement EBIT USD million USD million • Travel industry still affected by COVID with varying restrictions in our main markets USD million 12M 2021 12M 2020 Change • Capacity in 2021 was 87% higher than 2020 Transport revenue 453.9 26
Slide 11: Significant turnaround in the second half of the year
Significant turnaround in the second half of the year Operating income EBIT Net cash from operation Liquidity USD million USD million USD million Excl. Government facility in USD million 315 81 11 72 450 31 315 -28 242 20 135 -108 Jan-Jun 2021 Jul-Dec 2021 Jan-Jun 2021 Jul-Dec 2021 Jan-Jun 2021 Jul-
Slide 12: Deferred income USD 259.1 million
Deferred income breakdown USD million Deferred income 259 USD 259.1 million 20 15 Increasing by 84 USD 2.4 million from last quarter 140 Sold Vouchers Frequent Other Total deferred unused tickets flyer points prepayments income 31 Dec 2021 112 2
Slide 13: Strong financial position at year-end 2021
Strong financial position at year-end 2021 Assets Equity ratio Financial liabilities Net financial liabilities USD million USD million USD million Non-current assets Equity ratio excl. warrants Interest bearing debt Current assets Equity ratio Lease liabilities +137 +98 -5 1.172 25% 496 238 233 1.03
Slide 14: Business update and outlook
Business update and outlook Bogi Nils Bogason, CEO 14
Slide 15: Focus on preserving infrastructure and maintaining financial strength
Number of trips in the international route network Per month in 2021 Focus on 200 flights a week to 34 preserving 200 destinations infrastructure and maintaining financial strength enabled the successful 10 flights a week to four ramp up in 2021 destinations 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Slide 16: It was a year of recovery where we transported 1.5 million passengers
Number of passengers per market In thousands per month in 2021 It was a year of recovery where Jan-Jun 221 thousand Jul-Dec 1,240 thousand Witin passengers passengers we transported To From 1.5 million Via 264 passengers 219 212 206 thereof 85% in 170 169 the second half of the year 94 40 23 19 24 2
Slide 17: Strategic actions taken to streamline operations
Strategic actions taken to streamline operations Sale of 25% share in Icelandair Hotels and sale of Iceland Travel Integration of the domestic airline Air Iceland Connect Charter destinations moved into the route network – Tenerife, Alicante 17
Slide 18: Revised organizational structure to drive sustainable growth
Revised Board of Directors organizational President and CEO structure to drive CEO Office sustainable growth, digital Revenue Customer Leasing Cargo transformation Finance and to strengthen People & Culture focus on our Loftleiðir Icelandair Icelandic Cargo customers Operations Digital & Data 18
Slide 19: Review of Icelandair's long-term fleet strategy
Review of Icelandair’s long-term fleet strategy • Current fleet composition is well suited for the route network • In next few years additions will be with current aircraft types • In the second half of this decade the 757s will be replaced where several options are available 19
Slide 20: Commitment to reduce emissions by 50% per OTK by 2030
Icelandair’s commitment is to reduce emissions by 50% per OTK by 2030 and achieve net zero by 2050 Combination of measures required 13% 19% 3% Fleet renewal / new technologies New technologies vision how Operational improvements net zero Operational improvements emission Sustainable aviation fuels w
Slide 21: Ambitious flight schedule in 2022
Ambitious flight schedule in 2022 80% of 2019 capacity 50 Destinations 677 Connections 420 Weekly flights 21
Slide 22: 35 aircraft serving the route network in summer 2022
35 aircraft serving Fleet summer 2022 No of aircraft per type 35 the route network 3 2 in summer 2022 thereof 14 MAX 10 4 3 13 B757 B767 MAX 9 MAX 8 DHC-8 Q200 DHC-8 Q400 Total International Domestic route network route network 22
Slide 23: Two connection banks summer '22
Two connection banks summer ‘22 Primary connection bank • Operated throughout the year • Departures to Europe between 7 and 8 in the morning • Departures to N-America in the afternoon around 5 Second connection bank • Operated May throughout September • Departures 2 hours later than in the primary b
Slide 24: 4 new destinations: Raleigh-Durham, Salzburg, Rome, Nice
4 new destinations Raleigh-Durham, Salzburg, Rome, Nice 24
Slide 25: The booking inflow has rebounded from the Omicron effect
Booking development The booking inflow has rebounded from the negative effect of the Omicron variant on booking inflow in December 11/28/2021 12/5/2021 12/12/2021 12/19/2021 12/26/2021 1/2/2022 1/9/2022 1/16/2022 1/23/2022 1/30/2022 25
Slide 26: Continued positive outlook for Cargo and plans for organic growth
Continued positive outlook for Cargo and plans for organic growth 26
Slide 27: Leasing operations continue to support return to profitability
At the same time, our leasing operations continue to support our return to profitability 27
Slide 28: Guidance 2022
Guidance 2022 Subject to development of various external factors* Omicron having a negative impact on Q1 2022 Full year EBIT of 3%-5% Positive net results for the year 28 * Fuel price and currency development, continued impact of Covid on demand and various other factors
Slide 29: Strong platform to return to sustainable operating results
Strong platform to reach our primary objective to return to sustainable operating results Unique and Strong Clear strategy Streamlined Outstanding flexible route financial and management and simplified team of network position focus operation employees 29
Slide 30: Q&A
Q&A 30
Slide 31: Disclaimer
Disclaimer | This material has been prepared by Icelandair Group hf. Unless stated otherwise all information is sourced by Icelandair Group hf. | The circulation of the information contained within this document may be restricted in some jurisdictions. It is the responsibility of the individual to c