Aeroflot · RUS:AFLT
Aeroflot — FY2013 Earnings Presentation
37 slides from Aeroflot's earnings presentation, Mar 12, 2014
Slide 1: Aeroflot Group Q4 / Full Year 2013 Financial Results
Aeroflot Group Q4 / Full Year 2013 Financial Results Moscow March 12, 2014 Speaker: Shamil Kurmashov Chief Financial Officer, Head of Network and Revenue Management 1
Slide 2: Table of Contents
Table of Contents 1. Key Highlights 2. Market Update 3. Operating Performance 4. Financial Performance 5. Capital Structure and Liquidity 6. Fleet Dynamics 7. Appendix 2
Slide 3: Key Highlights
Key Highlights • Strong full year operating and financial results • Sustainable leading market position across domestic and international routes • Passenger traffic growth across almost all regions and flat yields / RASK translating into higher revenue • Expanding profitability as results of competi
Slide 4: Table of Contents
Table of Contents 1. Key Highlights 2. Market Update 3. Operating Performance 4. Financial Performance 5. Capital Structure and Liquidity 6. Fleet Dynamics 7. Appendix 4
Slide 5: Russian Air Transportation Market
Russian Air Transportation Market Russian Total Passenger Traffic (m PAX)1 CAGR 2008-13 2013-18F 103.7 91.6 80.1 70.5 13% 7% 61.5 56.7 64.4 56.2 41.2 47.3 35.3 32.8 8% 5% 26.2 29.2 32.7 35.4 39.2 23.8 2008 2009 2010 2011 2012 2013 Source: TCH Aeroflot Group Passenger Traffic (m PAX) CAGR 2008-2013 3
Slide 6: Aeroflot Group Market Position
Aeroflot Group Market Position Passenger Traffic (12 months 2013, m PAX) Russian Passenger Traffic 30% 31.3 19 % 20 % 19 % 20 % 19 % 18 % 18% 18% 18 % 18 % 28 % 24 % 25 % 22 % 19.1 18.6 12% 9% 12.5 8% 9.2 8.5 4% 63 % 64 % 53 % 56 % 55 % 58 % 4.4 Aeroflot Transaero S7 Group Utair Ural Foreign Others
Slide 7: Table of Contents
Table of Contents 1. Key Highlights 2. Market Update 3. Operating Performance 4. Financial Performance 5. Capital Structure and Liquidity 6. Fleet Dynamics 7. Appendix 7
Slide 8: Key Operating Data for JSC Aeroflot and Aeroflot Group
Key Operating Data for JSC Aeroflot and Aeroflot Group JSC Aeroflot Aeroflot Group Unit 2012 2013 Change 2012 2013 Change Passenger Turnover m pkm 50,533 60,226 19.2% 74,617 85,273 14.3% International Routes 34,954 40,614 16.2% 50,280 56,113 11.6% Domestic Routes 15,579 19,612 25.9% 24,337 29,161 19
Slide 9: Networks Operated and Key Statistics
Networks Operated and Key Statistics Flights Dynamics of Aeroflot JCS by Region (%) Average Flight Frequency per Route of Aeroflot JSC 20121 2013 Change Europe 7.4% Scheduled 12.0 13.2 10.0% CIS 30.3% Charter 0.8 0.4 (50.0)% Russia 14.8% International Scheduled 9.7 10.7 10.3% Asia 4.5% Domestic Sche
Slide 10: Traffic and Capacity Development
Traffic and Capacity Development (%, 2013 vs. 2012) North and Central America Europe Russia and CIS 49.0 % 48.1 % 51.4 % 20.4 % 21.8 % 18.6 % 17.2 % 18.3 % 17.5 % 1.3 p.p 0.7 p.p (1.8) p.p Passengers RPK ASK SLF Passengers RPK ASK SLF Passengers RPK ASK SLF carried carried carried Middle East and Af
Slide 11: Table of Contents
Table of Contents 1. Key Highlights 2. Market Update 3. Operating Performance 4. Financial Performance 5. Capital Structure and Liquidity 6. Fleet Dynamics 7. Appendix 11
Slide 12: Revenue Breakdown
Revenue Breakdown Traffic Revenue Breakdown (FY 2013) Revenue from Scheduled Passengers Carriages ($m)1 Y-o-y 2013 2013 2012 Change Charter Passenger Flights 41% 6.7% Russia 3,000 2,562 17.1% Cargo 3.8% 35% Europe 2,526 2,278 10.9% Scheduled Passenger 17% Flights Asia 1,250 1,050 19.0% 89.5% 4% Nort
Slide 13: Revenue Units
Revenue Units Yield: PAX Revenue / RPK RASK: PAX Revenue / ASK ($ cents / pkm) ($ cents / ASK) (5.4)% 0% (5.7)% 0% 9.3 8.8 9.1 9.1 7.0 7.1 7.1 6.6 Q4 2012 Q4 2013 2012 2013 Q4 2012 Q4 2013 2012 2013 Yield ($ cents / pkm)1 RASK ($ cents / ASK)1 10.5 10.4 8.1 8.1 8.3 8.5 6.6 6.6 International Domestic
Slide 14: Cost Analysis
Cost Analysis FY 2013, $m Q4 2013 Y-o-y Change FY 2013 Y-o-y Change 29.2% Fuel 607 0.7% 2,485 8.6% Opex (ex. Fuel) 19.5% Aircraft, Traffic and 406 4.4% 1,659 14.3% Passenger Servicing 16.7% Staff 420 22.4% 1,424 14.7% 7.9% SG&A1 227 14.6% 674 10.7% 7.5% Maintenance 198 23.0% 640 9.8% 7.1% Operating
Slide 15: Group Unit Costs
Group Unit Costs Cost Per ASK ($ cent) (2.2)% 0.17 0.08 9.01 8.81 (4.1)% (0.19) (0.26) 8.14 0.01 (0.11) (0.02) 7.81 (0.20) CASK ∆ in ∆ in ∆ in ∆ in CASK CASK ∆ in ∆ in ∆ in ∆ in CASK 2012 Staff Fuel Maintenance Other¹ 2013 Q4 2012 Staff Fuel Maintenance Other¹ Q4 2013 Achieved CASK reductions are su
Slide 16: Managing Fuel Costs
Managing Fuel Costs Fuel Consumption per ASK (gr/ASK) Fuel Consumption per RTK (gr/tkm) (10.7)% (3.9)% 28 330 26 316 317 25 2011 2012 2013 2011 2012 2013 • Aeroflot is achieving efficiency gains in fuel costs as new aircraft are put into operation, while old and less fuel-efficient ones are in the p
Slide 17: Headcount Overview and Labour Productivity
Headcount Overview and Labour Productivity Headcount 31-Dec-2012 31-Dec-2013 Y-o-y Change Aeroflot JSC 16,418 17,891 9.0% Aeromar 2,938 2,949 0.4% Subsidiary Airlines 9,214 9,366 1.6% Other1 256 263 2.7% Total 28,826 30,469 5.7% Airlines Labour Productivity2 Traffic Revenue / Avg. Headcount RPK / Av
Slide 18: Key Financial Results of Aeroflot Group
Key Financial Results of Aeroflot Group $m, Unless Otherwise Stated Q4 2012 Q4 2013 Change FY 2012 FY 2013 Change Revenue 2,117 2,104 (0.6)% 8,138 9,136 12.3% RPK1 (m pkm) 18,388 19,910 8.3% 74,617 85,273 14.3% Yield2 ($ cents/pkm) 9.3 8.8 (5.4)% 9.1 9.1 - EBITDAR3 169 27 (84.0)% 1,238 1,602 29.4% M
Slide 19: Group Operating Income Analysis (Q4)
Group Operating Income Analysis Quarterly Operating Income Evolution, Q4 y-o-y basis ($m) 141 (92) (67) (63) (4) (10) 44 (23) (44) 10 (17) (8) (37) (19) (228) (39) Operating Income Q4 2012 Operating Income Q4 2013 Costs on option Other Non-Recurring Other Revenue Fuel Costs Equity Investments Staff
Slide 20: Group Operating Income Analysis
Group Operating Income Analysis Annual Operating Income Evolution, y-o-y basis ($m) 70 29 82 899 31 (311) (182) 622 (207) (66) (82) 358 x 1.7 Operating Air Carriage Air Carriage Other Fuel Fuel Carriage Fuel Price Staff Costs Aircraft, D&A³ Other Operating Income 2012 Volume Tariff Revenue Consumpti
Slide 21: Group Net Income
Group Net Income Aeroflot Group Net Income ($m) 39% 281 (21) (2) 24 230 (17) (3) 25 0.4 5 166 (63) Total net loss of subsidiary airlines of $105m JSC Rossiya Donavia Orenair Aurora Vladivostok Sherotel Aeromar Aerofirst² Other Group Group Aeroflot Airlines Air¹ (including Net Net minority) Income In
Slide 22: Subsidiary Airlines Operationally Breakeven
Subsidiary Airlines Operationally Breakeven Operating Income / Net Income ($m)1 2012 2013 Change Highlights • Full integration into Aeroflot group completed — Commercial functions transferred to Aeroflot — Standardised product and service offering — Unification of aircraft fleet 16 / 17 (2) / (2) (1
Slide 23: Table of Contents
Table of Contents 1. Key Highlights 2. Market Update 3. Operating Performance 4. Financial Performance 5. Capital Structure and Liquidity 6. Fleet Dynamics 7. Appendix 23
Slide 24: Leverage
Leverage Debt ($m) Total Debt / LTM EBITDA 3.6 x 3.9 x 31-Dec-2012 31-Dec-2013 Change 2.6 x Borrowings 706 410 (42%) 31-Dec-2011 31-Dec-2012 31-Dec-2013 Finance Lease Liabilities 1,882 2,201 17% Net Debt / LTM EBITDA 2.9 x 3.2 x Pension Liabilities 15 22 (32%) 2.1 x Customs Duties 19 13 47% 31-Dec-2
Slide 25: Operating Free Cash Flow and Liquidity
Operating Free Cash Flow and Liquidity 2013 Operating Free Cash Flow ($m) 60 1,035 37% 105 909 104 (126) 26 794 335 (141) 578 430 Profit Before Depreciation Interest Unrealized Net Other Adj. Cash Flows Working CapitalNet Cash Flows Net Capital Net Pre- Free Cash FlowFree Cash Flow Income Tax and Ex
Slide 26: Table of Contents
Table of Contents 1. Key Highlights 2. Market Update 3. Operating Performance 4. Financial Performance 5. Capital Structure and Liquidity 6. Fleet Dynamics 7. Appendix 26
Slide 27: Aeroflot Group Fleet in Operation
Aeroflot Group Fleet in Operation Type1 Aeroflot Subsidiaries Total Owned Financial Lease Operating Lease Boeing B-767 5 3 8 - - 8 Airbus A-330 22 - 22 - 8 14 Long-haul Tu-204 - 6 6 - 6 - Boeing B-777 5 3 8 - 5 3 Ilyushin Il-96-3002 6 - 6 6 - - McDonnell Douglas MD-11 3 - 3 - - 3 Total 41 12 53 6 19
Slide 28: Aeroflot JSC Fleet Order and Phase-Out Schedule
Aeroflot JSC Fleet Order and Phase-Out Schedule Total Aircraft Delivery Schedule in Accordance with Existing Contracts1 Type of Aircraft Delivered as at 31-Jan-2014 2014 2015 2016 2017 Long-haul 53 5 3 5 9 A-330 22 0 0 0 0 B-767 8 0 0 0 0 B-777 8 5 3 3 0 B-787 0 0 0 2 9 Ilyushin Il-96 6 0 0 0 0 Tu-2
Slide 29: Table of Contents
Table of Contents 1. Key Highlights 2. Market Update 3. Operating Performance 4. Financial Performance 5. Capital Structure and Liquidity 6. Fleet Dynamics 7. Appendix 29
Slide 30: Summer 2014 Schedule
Summer 2014 Schedule Increase in Available Seat-Kilometres (ASK) in Summer 2014 compared to Summer 2013 Long-Haul Destinations Mid-Haul Destinations 12% 9% 27% 6% Domestic International Domestic International Long-Haul Destinations Mid-Haul Destinations 4% 27% 17% 6% 1% 27% 17% North and Central Asi
Slide 31: Aeroflot Group Structure
Aeroflot Group Structure JSC Aeroflot Airlines Service companies 100% CJSC Aeromar 51% JSC Sheremetyevo 8.96% JSC Donavia In-flight catering Base airport JSC Orenair 100% CJSC AeroMASh-AB CJSC Transport 45% 3.85% Aviation security Clearing House JSC Rossiya 75%-1 Airlines share LLC Aeroflot-Finance
Slide 32: Key Financial Data for JSC Aeroflot
Key Financial Data for JSC Aeroflot $m, Unless Otherwise Q4 2012 Q4 2013 Change FY 2012 FY 2013 Change Stated Revenue1 1,608 1,647 2.4% 6,000 6,949 15.8% RPK2 (m pkm) 12,762 14,864 16.5% 50,533 60,226 19.2% Yield3 ($ cents/pkm) 9.9 8.9 (10.1)% 9.6 9.5 (1.0)% EBITDAR4 55 (22) n/m 977 1,236 26.5% Marg
Slide 33: Key Operating Data of Subsidiary Airlines
Key Operating Data of Subsidiary Airlines Rossiya Vladivostok Orenair SAT Donavia Total Airlines Air 2013 4,590 3,141 1,077 326 1,354 10,488 Passenger Traffic 2012 4,209 3,194 1,162 265 986 9,816 (‘000 PAX) Change, % 9.1 % (1.7)% (7.3)% 23.0 % 37.3 % 6.8 % 2013 9,186 10,984 2,519 356 2,001 25,047 Pa
Slide 34: Summary Financial Tables Income Statement
Summary Financial Tables Income Statement 3 months 3 months Financial Year Financial Year 31-Dec-2012 31-Dec-2013 31-Dec-2012 31-Dec-2013 Traffic Revenue 1,807 1,828 7,118 8,087 Other Revenue 310 275 1,020 1,049 Revenue 2,117 2,103 8,138 9,136 Operating Costs (1,699) (1,767) (6,191) (6,672) Staff Co
Slide 35: Summary Financial Tables Balance Sheet
Summary Financial Tables Balance Sheet 31-Dec-2012 31-Dec-2013 Assets Current Assets Cash and Cash Equivalents 496 570 Short-term Investments 5 8 Accounts Receivable and Prepayments 1,553 1,702 Aircraft Lease Deposits 8 12 Income Tax Receivables 69 15 Expendable Spare Parts and Inventories 141 151 D
Slide 36: Summary Financial Tables Balance Sheet (continued)
Summary Financial Tables Balance Sheet (continued) 31-Dec-2012 31-Dec-2013 Liabilities and Equity Current Liabilities Accounts Payable and Accrued Liabilities 989 1,108 Unearned Transportation Revenue 503 499 Deferred Revenue Related to Frequent Flyer Programme 12 18 Provisions 4 27 Short-term Borro
Slide 37: Summary Financial Tables Condensed Cash Flow Statement
Summary Financial Tables Condensed Cash Flow Statement Financial Year Financial Year 31-Dec-2012 31-Dec-2013 Operating Profit Before Working Capital Changes 700 1,035 Net Cash Flows from Operating Activities 541 909 Net Cash Flows Used in Investing Activities 41 (113) Net Cash Flows Used in Financin