Qantas Airways Limited · ASX:QAN
Qantas Airways — FY2020 Earnings Presentation
27 slides from Qantas Airways's earnings presentation, Aug 20, 2020
Slide 1: FY20 Results Supplementary Presentation
Qantas Airways Limited FY20 Results Supplementary Presentation 20 August 2020 ASX: QAN US OTC: QABSY
Slide 2: FY20 Key Group financial metrics
FY20 Key Group financial metrics FY19 FY20 VLY % 11 Comments (Restated)10 Underlying Profit Before Tax1 ($M) 124 1,326 (91) Decline in profitability due to the impact of COVID-19 in 2H20 Underlying Earnings per Share2 (c) 5.9 57.3 (90) Based on weighted average shares on issue through FY20 Statutory
Slide 3: Underlying Income Statement summary
Underlying Income Statement summary FY19 $M FY20 VLY % 3 Comments (Restated)2 Net passenger revenue 12,183 15,696 (22) 4Q20 capacity declined ~100% Net freight revenue 1,045 971 7.6 Strong freight demand in 2H20 Other revenue 1,029 1,299 (21) Includes decline in Loyalty revenue in 4Q20 Total Revenue
Slide 4: Reconciliation to Underlying PBT
Reconciliation to Underlying PBT $M FY20 FY19 (Restated)2 Statutory Other items not included Underlying1 Statutory Other items not included Underlying1 in Underlying PBT in Underlying PBT Net passenger revenue 12,183 - 12,183 15,696 – 15,696 Net freight revenue 1,045 - 1,045 971 – 971 Other revenue
Slide 5: Revenue detail
Revenue detail Net passenger revenue down 22% • ASKs down 26% due to the impact of travel restrictions associated with COVID-19 Revenue ($B) – Group Domestic1 ASKs decreased 25% – Group International2 ASKs decreased 27% -21% – Excludes charter flights 18.0 • Group Unit Revenue increased 1.5% – Group
Slide 6: Expenditure detail
Expenditure detail Fuel down 25% • Impact of reduced consumption due to reduced activity related to COVID-19 travel Expenditure 1 ($B) restrictions -15% • Lower AUD jet fuel prices driven primarily by lower USD prices which offset FX impacts 16.4 • Fuel efficiency initiatives 13.9 Manpower and staff
Slide 7: Cash flow (Statutory)
Cash flow (Statutory) FY19 • Significant drop in operating cash flow due to the impact of $M FY20 (Restated)2 travel restrictions and border closures due to COVID-19 Operating cash flows 1,083 3,164 • Investing cash flows skewed to first half Investing cash flows (1,571) (1,563) • Financing cash flo
Slide 8: Invested Capital calculation
Invested Capital calculation FY193 $M FY20 Comments (Restated) Receivables (current and non-current) 646 1,178 Collection of receivables and slower rebuild due to COVID-19 Inventories 306 364 Other assets (current and non-current) 562 680 Investments accounted for under the equity method 59 217 Due
Slide 9: ROIC calculation
ROIC calculation FY19 $M FY20 (Restated)1 Underlying PBT 124 1,326 Add back: Underlying net finance costs 271 282 Add back: Lease depreciation under AASB 16 402 351 Less: Notional depreciation2 (108) (114) Less: Cash expenses for non-aircraft leases (225) (187) ROIC EBIT 464 1,658 FY19 $M FY20 (Rest
Slide 10: Net debt target range
Net debt target range • Net debt target range = 2.0x – 2.5x ROIC EBITDA where EBITDA achieves a fixed 10% ROIC • At current Invested Capital of $6.0b, optimal net debt range is $4.5b to $5.6b • Targeting net debt to be within the range on a forward looking basis $b Invested Capital 6.0 Invested Capi
Slide 11: Net debt movement consistent with Financial Framework
Net debt movement consistent with Financial Framework FY19 • The Financial Framework considers aircraft leases as part of $M FY20 (Restated)1 net debt Opening Net Debt (4,710) (4,903) — Aircraft leases are recognised in net debt at fair value Net cash from operating activities 1,083 3,164 Less: Leas
Slide 12: FY20 Australian Government COVID-19 packages
FY20 Australian Government COVID-19 packages The Coronavirus and government border restrictions had a $4.0 billion impact on the Group’s revenue for FY20. Qantas Domestic, Qantas International, Qantas Freight and Jetstar provided services for vital passenger and freight services during the pandemic,
Slide 13: Fleet as at 30 June 2020
Fleet as at 30 June 2020 Aircraft Type FY20 FY19 Change • Group fleet7 of 314 aircraft as at 30 June 2020 A380-800 12 12 – 747-4001 – 1 (1) • Movements in FY20 include: 747-400ER 4 6 (2) — Addition of three 787-9 A330-200 18 18 – A330-300 10 10 – — Disposal of one 747-400 737-800NG 75 75 – 787-92 11
Slide 14: Supplementary Segment Information
Supplementary Segment Information
Slide 15: 2H20 Group and Group Domestic Traffic Statistics
2H20 Group and Group Domestic Traffic Statistics 3Q20 3Q19 Change (%) 4Q20 4Q19 Change (%) 2H20 2H19 Change (%) Qantas Group Operations Passengers carried (‘000) 11,353 13,670 (17) 246 13,643 (98) 11,599 27,313 (58) Revenue Passenger Kilometres (m) 26,350 31,290 (16) 240 31,244 (99) 26,590 62,534 (5
Slide 16: 2H20 Group International Traffic Statistics
2H20 Group International Traffic Statistics 3Q20 3Q19 Change (%) 4Q20 4Q19 Change (%) 2H20 2H19 Change (%) Qantas International Passengers carried (‘000) 1,840 2,224 (17) 1 2,170 (100) 1,841 4,394 (58) Revenue Passenger Kilometres (m) 12,522 15,008 (17) 0 14,756 (100) 12,522 29,764 (58) Available Se
Slide 17: Qantas Domestic
Qantas Domestic1 FY19 1H19 1H 2H19 2H FY20 VLY % 1H20 2H20 (Restated) (Restated) Variance% (Restated) Variance% Revenue $M 4,672 6,098 (23) 3,218 3,230 (0.4) 1,454 2,868 (49) Underlying EBIT $M 173 778 (78) 465 478 (2.7) (292) 300 (>100) Operating Margin % 3.7 12.8 (9.1pts) 14.4 14.8 (0.4pts) (20.1)
Slide 18: Qantas International and Freight
Qantas International and Freight1 FY19 1H19 1H 2H19 2H FY20 VLY % 1H20 2H20 (Restated) (Restated) Variance% (Restated) Variance% Revenue $M 6,077 7,420 (18) 3,843 3,693 +4.1 2,234 3,727 (40) Underlying EBIT $M 56 323 (83) 122 119 +2.5 (66) 204 (>100) Operating Margin % 0.9 4.4 (3.5pts) 3.2 3.2 - (3.
Slide 19: Jetstar Group
Jetstar Group1 FY19 1H19 1H 2H19 2H FY20 VLY % 1H20 2H20 (Restated) (Restated) Variance% (Restated) Variance% Revenue $M 3,006 3,961 (24) 2,120 2,048 +3.5 886 1,913 (54) Underlying EBIT $M (26) 400 (>100) 220 253 (13.0) (246) 147 (>100) Operating Margin % (0.9) 10.1 (11.0pts) 10.4 12.4 (2.0pts) (27.
Slide 20: Jetstar Group as at June 2020
Jetstar Group as at 30 June 2020 6 Business Ownership1 Launch Aircraft2 5 ❶Jetstar Australia 100% 2004 49 x A320s/A321s ❷Jetstar International 100% 2006 11 x 787-8s ❸Jetstar New Zealand3 100% 2009 9 x A320s ❹Jetstar Asia (Singapore) 49% 2004 18 x A320s ❺Jetstar Japan 33% 2012 25 x A320s 4 ❻Jetstar P
Slide 21: Jetstar in Asia
Jetstar in Asia1 • Jetstar continues to evolve its presence in Asia in response to the impact of COVID-19 — All airlines moved into losses • Jetstar Japan focused on maintaining strong domestic position, reducing costs and maintaining flexibility to adapt to the impact of COVID-19 — Resumed most dom
Slide 22: Qantas Loyalty
Qantas Loyalty1 FY19 1H19 2H19 FY20 VLY % 1H20 V1H19% 2H20 V2H19% (Restated) (Restated) (Restated) Revenue $M 1,224 1,654 (26) 872 809 +7.8 352 845 (58) Underlying EBIT $M 341 376 (9.3) 196 175 +12 145 201 (28) Operating Margin % 27.9 22.7 +5.2pts 22.5 21.6 +0.9pts 41.2 23.8 17.4pts QFF Members M 13
Slide 23: Diversification and growth at Qantas Loyalty
Diversification and growth at Qantas Loyalty One of the world’s most diverse airline loyalty programs • 4% growth1 in Qantas Frequent Flyer membership; ~20% growth in QBR2 membership with >300,000 SME members3 • >550 Coalition Partners4; 20 new Qantas Business Rewards partners onboarded • BP / Qanta
Slide 24: Margin is only generated on 'external points sales'
Margin is only generated on ‘external points sales’ Core points sales – generates pointsmargin Margin is only generated on ‘externalpoints’ (unique compared to other airline loyalty programs) Creating value for ourpartners ~40% Internal Qantas,Jetstar • Customeracquisition Price =cost • Customerrete
Slide 25: Glossary
Glossary Available Seat Kilometres (ASK) – Total number of seats available for passengers, Net Working capital – Net total of the following items disclosed in the Group’s Consolidated multiplied by the number of kilometres flown Balance Sheet: receivables, inventories and other assets reduced by pay
Slide 26: Disclaimer and ASIC Guidance
Disclaimer and ASIC Guidance This Presentation has been prepared by Qantas Airways Limited (ABN 16 009 661 901) (Qantas). Summary information This Presentation contains summary information about Qantas and its subsidiaries (Qantas Group) and their activities current as at 20 August 2020, unless othe
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