Aeroflot · RUS:AFLT
Aeroflot — Investor Day (December 2017)
47 slides from Aeroflot's investor day presentation, Dec 21, 2017
Slide 1: Aeroflot Group Capital Markets Day 2017
AEROFLOT GROUP C A P I T A L M A R K E T S D AY 2 0 1 7 Moscow, 21 December 2017
Slide 2: Disclaimer
Disclaimer This document has been prepared by PJSC “Aeroflot” (the “Company”). By attending the meeting where the presentation is made, or by reading the presentation slides, you agree to the following. This document does not constitute or form part of any advertisement of securities, any offer or i
Slide 3: Agenda
Agenda Time Content Speakers 9.30 – 10.00 Registration and Coffee Management Presentations 10.00 – 10.30 Market Update and Strategy Overview Giorgio Callegari (Deputy CEO for Strategy and Alliances) 10.30 – 10.50 Financial Overview Shamil Kurmashov (Deputy CEO for Commerce and Finance) 10.50 – 11.00
Slide 4: Aeroflot – Introduction
AEROFLOT – INTRODUCTION GIORGIO CALLEGARI DEPUTY CEO FOR STRATEGY AND ALLIANCES 4
Slide 5: 2017 - Improvements Across the Board
2017 - Improvements Across the Board + 15.0 % + 16.0 % - 0.1 yrs - 0.4 % + 0.5 p.p. ~50.0 mn ~130.0 bn 4.2 yrs 4.1 yrs >30.0 22.9 22.8 81.5% ~82.0% 43.4 mn 112.1 bn grgr/ /ASK ASK gr / ASK FUEL PASSENGER LOAD PAX RPK FLEET AGE¹ COMSUMPTION² FACTOR 2016 2017Е • In 2017, Aeroflot has continued improvi
Slide 6: Recognized Level of Excellence
Recognized Level of Excellence Four Star Airline Best Airline Strongest Brand in Official carrier 2016 in Eastern Europe Russia and Strongest 2011, 2013-2017 Airline Brand in the World 2017 Five Star Best Major Airline in Europe, Europe’s Leading Airline Brand, Favourite International Global Airline
Slide 7: Market and Strategy Update
MARKET AND STRATEGY UPDATE GIORGIO CALLEGARI DEPUTY CEO FOR STRATEGY AND ALLIANCES
Slide 8: Russian Market Development
Russian Market Development 2000 – 2017 Growth of Russian Market 2018 and Beyond High growth of Russian air transportation market in 2017 is the consequence of: – Low base effect after significant competitor left the market in October 2015. – Materialization of deferred demand for tourist carriages a
Slide 9: Russian Passenger Transportation Market Dynamics
Russian Passenger Transportation Market Dynamics (Air Transportation + Long-haul Rail) Air and Rail Carriage Volumes Dynamics Market1 Shares of Air and Rail Based on passenger traffic, y-o-y comparison 9M 2017, y-o-y comparison in p.p. 29% Air transportation grows 54.6% faster than long-haul rail se
Slide 10: How Does the Russian Market Grow?
How Does the Russian Market Grow? Broad market recovery… …amid changes in Russian market Market Share1 mln PAX mln PAX 9M 2017, % 3.6 3.6 15.9% 8.2 5.4 37.8% 1.1 0.5 0.8 4.9 4.5 21.5% 92.1 92.1 6.6% 11.9% 6.2% 75.8 75.8 Aeroflot Group S7 Group Utair Group Ural Airlines Other Russian Other Russian ca
Slide 11: Identifying Sources of Future Aeroflot Group's Growth
Identifying Sources of Future Aeroflot Group’s Growth Aeroflot Group Traffic Growth Projected Sources of Growth PAX, mn Russian market International transit traffic CAGR: 9.4% ~741 ~24 mn incremental PAX +48% Aeroflot Rossiya ~50 Aurora Pobeda 43.4 Contribution of Growth by Segment PAX, mn 14 10 74
Slide 12: Multi-Brand Strategy
Multi-Brand Strategy 2017 OFFERING: Positioning Premium product Mid-price regional / charter product Low-cost product Product for far east Scheduled flights Scheduled and charter flights Scheduled flights Scheduled flights Network carrier with Optimum relationship between quality and Low cost
Slide 13: Strengthening Position in International Connecting Traffic
Strengthening Position in International Connecting Traffic Key International Transit Markets Key Examples of SVO Competitive Position London - Bangkok Madrid - Shanghai NA EE WE NEA ME SWA SEA London – Hong Kong New York - Delhi International Transit Traffic 10.5% 10.3% 10.6% 11.6% 11.8% 14.0% 13.1%
Slide 14: Fleet Strategy
Fleet Strategy PREMIUM PRODUCT MID-PRICE REGIONAL / CHARTER PRODUCT LOW-COST PRODUCT PRODUCT FOR FAR EAST Manufacturer Number of types Five aircraft types Four aircraft types One aircraft type Three aircraft types Airbus A320 (Family) Airbus A320 (Family) Boeing 737 Airbus A319 Narrow-body
Slide 15: Exploring Additional Revenue Opportunities
Exploring Additional Revenue Opportunities New Markets and Segments Ancillary Revenue New routes in the markets of presence : Partners, including under frequent RUB 12.5 bn flyer programme ancillary revenue in ― Domestic routes: Belgorod, Salekhard, Khanty-Mansiysk 9M 20171 ― International route
Slide 16: Online Ancillary Revenue
Online Ancillary Revenue Aeroflot airline ancillary revenues offered online 2018 plans mn RUB +30% Excess baggage fees 875 opportunity to purchase on our web-site +257% 127 A la carte menu additional meals for economy class passengers +258% Seat selection 65 +110% seat selection for extra fees for s
Slide 17: Infrastructure Expansion to Support Future Growth
Infrastructure Expansion to Support Future Growth Sheremetyevo development program overview Key infrastructure objects to be launched in 2018 Sheremetyevo is set to become a prominent passenger and cargo hub and provide all necessary conditions for long-term cooperation with Aeroflot For this pu
Slide 18: Strengthening customer services with a focus on digitalisation
Strengthening customer services with a focus on digitalisation and development of IT systems Business development priorities Development of IT systems for production Data management Digitalization Cyber-defences Agile and new work methods NDC (New Distribution Capability) – direct distribution for a
Slide 19: Network Overview
NETWORK OVERVIEW GIORGIO CALLEGARI DEPUTY CEO FOR STRATEGY AND ALLIANCES
Slide 20: Aeroflot Group Network Development Strategy
Aeroflot Group Network Development Strategy Relatively Stable Number of … due to Focus on Network Quality … with Further Improvements Destinations … and Frequency … Possible Across Segments. # of destinations Average scheduled flight frequency1 Average scheduled flight frequency1 CAGR: 5.7% 158 2.8%
Slide 21: Aeroflot Airline Network – Plans for 2018
Aeroflot Airline Network – Plans for 2018 Increased Frequencies (per Week) on the Following Routes: Operating Growth by Region PAX growth, y-o-y – for Aeroflot airline Russia Europe CIS 20.6% Khanty-Mansiisk+7 Athens +7 Kaliningrad +4 Barcelona +7 Astana+3 Krasnoyarsk+7 Budapest +7 11.1% Tenerife +1
Slide 22: World Cup Case Study: Brazil 2014 and Germany 2006
World Cup Case Study: Brazil 2014 and Germany 2006 World Cup Air traffic evolution1 Impact on economy Carriers’ operating data million PAX 2013 2014 2015 100.4 480k PAX, million 66.7 67.8 67.8 of foreign World Cup guests 95.6 change, % 3.1% 1.7% 0.0% PLF 80.8% 83.4% 83.1% change, p.p. 2.2 2.6 (0.3)
Slide 23: Aeroflot and FIFA World Cup in Russia
Aeroflot and FIFA World Cup in Russia Routes to World Cup Locations Aeroflot Efforts General preparation sourced by: 1 * Establishment of specially-dedicated working group to coordinate preparation process and day-to-day routes allocation for World Cup 2018 Saint Petersburg (4.5mm from Moscow) 42 Pa
Slide 24: Financial Overview
FINANCIAL OVERVIEW SHAMIL KURMASHOV DEPUTY CEO FOR COMMERCE AND FINANCE
Slide 25: Guidance
Guidance Aeroflot Group – operating targets 2017 and 2018 Indicator 9M 2017 YTD 2017 Updated Targets 2018 Target Passenger +16.8% +14%-15% +11%-12% Traffic (PAX) Passenger +18.0% +15%-16% +9%-10% Traffic (RPK) Capacity (ASK) +16.2% +14%-15% +9%-10% Passenger Load 83.7% > 82.0% 82.0%+ Factor (%) Aero
Slide 26: Questions and Answers Session
QUESTIONS AND ANSWERS SESSION
Slide 27: Aeroflot Group Capital Markets Day 2017 – Rossiya Airlines
Aeroflot Group Capital Markets Day 2017 Dmitry Saprykin Chief Executive Officer Rossiya Airlines
Slide 28: Russia Airlines – Regional Product for Savvy Passengers
Russia Airlines – Regional Product for Savvy Passengers Business Highlights Airport Hubs and Fleet 1 Focus on the mid-price segment (optimal price & quality combination) 41 routes 31 aircraft from LED based at LED 2 Strong position in St. Petersburg - second largest St. Petersburg (LED) market in Ru
Slide 29: St. Petersburg – Second Largest Market in Russia
St. Petersburg – Second Largest Market in Russia Pulkovo – Largest Regional Airport High Market Seasonality million PAX CAGR: 12M 2016, million PAX (3.6%) +24.2% 1.8 14.3 1.6 13.5 13.3 12.6 1.4 7.1 5.0 10.2 1.2 5.6 5.0 1.0 4.0 0.8 0.6 7.2 7.9 8.3 7.7 0.4 6.2 0.2 0.0 2014 2015 2016 9М 2016 9М 2017 Ja
Slide 30: Rossiya Network
Rossiya Network Rossiya Airline’s Network (Winter Schedule 2017/2018) Number of Scheduled Routes Murmansk 46 41 Arkhangelsk Syktyvkar Surgut Saint-Petersburg Magadan Perm Yekaterinburg Kaliningrad Kazan Tyumen Moscow Ufa Krasnoyarsk Hamburg Omsk Novosibirsk Petropavlovsk-Kamchatskiy 18 16 Samara Che
Slide 31: Operating Performance
Operating Performance Passenger Traffic Passenger Capacity Passenger Load Factor million PAX billion ASK % +5.9 p.p. +32.6% +43.7% 92.0% 9.0 26.6 +1.9 p.p. 6.8 +18.5% 86.1% 18.5 +30.2% 85.0% 5.7 (1.9 p.p.) +64.9% 83.2% 4.8 14.7 +66.2% 81.3% 11.9 11.3 3.3 79.4% 7.2 2.0 Total International Domestic To
Slide 32: Charter Segment
Charter Segment Highlights Growing Volumes of Charter Segment… Key partner • Biblio-Globus PAX growth, million Revenue growth, RUB billion Network • Popular international and Russian tourist routes >2.8x >2.6x • 8 Boeing 737-800 narrow-bodies Fleet • 7 Boeing 747-400 wide-bodies 3.1 21.7 • PAX: 3.1
Slide 33: Fleet Composition and 2018 Development Plan
Fleet Composition and 2018 Development Plan Rossiya Airline’s Fleet Breakdown Rossiya’s Fleet by Type of Aircraft 31.12.2017 31.12.2018 Aircraft Type Change (expected) (plan) 23.0% Narrow-body Airbus A319-100 26 23 (3) Wide-body 77.0% Airbus A320-200 5 6 1 Boeing 737-800 16 16 - Narrow-body 47 45 (2
Slide 34: Focus for Rossiya in 2018 and Beyond
Focus for Rossiya in 2018 and Beyond • 1 Further development of the route network in the scheduled and tourist segments, with tactical adjustments: • Increase capacity on domestic routes • Optimisation of a number of flights in the international segment (reopening of Egypt provides opportunities) •
Slide 35: Thank you for your attention!
Thank you for your attention!
Slide 36: Low Cost Carrier - Pobeda
Aeroflot Group Capital Markets Day 2017 Low Cost Carrier - Pobeda Andrey Kalmykov Chief Executive Officer Pobeda Airlines
Slide 37: Pobeda – Russia's First Low-cost Carrier
Pobeda – Russia’s First Low-cost Carrier Network Overview Fleet Overview > 80 routes in total (2017) 12 Boeing 737-800NG¹ 47 routes in Winter Schedule 2017/2018 4 Aircraft delivered in 2017 – 33 domestic destinations < 3y Average age of the fleet – 14 international destinations 14 unique
Slide 38: Pobeda Recognized as One of the Most Efficient LCC in the Industry
Pobeda Recognized as One of the Most Efficient LCC in the Industry CASK 3.0 3.61 5.82 3.13 3.7 4.14 (EUR cents) Single class Yes Yes Yes Yes Yes Yes 13.1 Aircraft utilization rate (15+ in summer 10.4 10.9 13.5 12.1 up to 15.0 (hours) season) Fleet composition & B737-800, A320Neo, B737-800 B737-800 A
Slide 39: Key Development Milestones
Key Development Milestones PLF reaches historical high of 96.8% in Q3 2017 Active development of intra-regional flights as well as international flights from the regions Addition of 4 aircraft in Q4 2017 Pobeda becomes Top-10 airline in Cumulative PAX of c. 4.6 mln expected by the Russia y
Slide 40: Key Operational Highlights (1/2)
Key Operational Highlights (1/2) Number of Flights Capacity & Load Factor 81.2% 88.3% 87.6% 94.5% 27.9% 32.4% 3.9% (5.2%) 25,668 7,606 3,208 20,063 19,690 1,334 48 18,673 5,837 6,062 5,746 18 2,212 3,616 941 1,504 22,460 20,015 6,272 17,478 5,729 15,057 4,896 4,558 2015 2016 9M 2016 9M 2017 2015 201
Slide 41: Key Operational Highlights (2/2)
Key Operational Highlights (2/2) Flight Hours Average Daily Flight Hours per Aircraft 31.4% 4.3% 4.7% 9.2% 53,892 13.1 12.3 12.5 1 11.3 42,949 41,017 41,165 2015 2016 9M 2016 9M 2017 2015 2016 9M 2016 9M 2017 Significant increase in the flight hours due to opening of new For 9M 2017, daily utili
Slide 42: Key Financial Highlights (1/3)
Key Financial Highlights (1/3) Revenue (RUB mln) Operating Expenses (RUB mln) 70.1% 14,697 3.6% 11,585 7.5% 11,791 1.8% 6.1% 10,516 25.0% 10.3% 1.8% 10.0% 7.5% 12.1% 26.7% 21.0% 25.2% 19,131 12.1% 12.9% 12.0% 22.7% 18.6% 23.8% 23.6% 15,723 16,002 28.2% 28.9% 30.4% 30.5% (0.4)% 2015 2016 9M 2016 9M 2
Slide 43: Key Financial Highlights (2/3)
Key Financial Highlights (2/3) RASK (RUB) CASK (RUB) (2.0%) 28.5% 2.02 1.93 1.94 0.12 0.07 0.03 2.69 2.64 1.80 2.52 0.20 0.14 0.20 0.13 0.48 0.41 1.96 0.51 0.48 0.25 0.23 0.22 0.24 0.44 0.46 0.37 0.43 0.57 0.56 0.55 0.59 2015 2016 9M 2016 9M 2017 2015 2016 9M 2016 9M 2017 Fuel Aircraft, Traffic and
Slide 44: Key Financial Highlights (3/3)
Key Financial Highlights (3/3) EBITDAR and EBITDA (RUB mln) Net Income (RUB mln) 23% NM 42% 23% 51% 33% 42% 26% NM 20% 28% 23% 4,339 8,122 8,021 3,747 3,619 6,703 5,214 4,442 4,230 2,587 (328) (80) 2015 2016 9M 2016 9M 2017 2015 2016 9M 2016 9M 2017 EBITDAR, RUB mln EBITDA, RUB mln NI margin, % EBIT
Slide 45: Future Development Plans
Future Development Plans Over the Next Years We Plan To … Resulting in Strong PAX Which Will Allow Us To Expand Our Route Network1 Increase Our Fleet Size… Growth Well Above the Market Current Destinations New Destinations Murmansk 2016 2016 = 12 = 4.3mln Surgut +25% CAGR Saint Petersburg +24% CAGR
Slide 46: Pobeda's Peer Group Overview
Pobeda’s Peer Group Overview LTM, 30.09.2017, in millions EUR (if not indicated otherwise) Year of Incorporation 2014 1985 1995 2003 1990 2003 Passenger traffic (million passengers, 4.4 127.1 80.2 26.9 26.8 8.6 LTM, 30.09.2017) Revenue 298 6,942 5,794 1,799 1,294 912 Net Income 49 1,410 350 281 67 1
Slide 47: Thank you for attention!
pobedaeee ‘4 Thank you for attention!