Air France-klm Sa · EURONEXT:AF
Air France-klm Sa — Q1 2024 Earnings Presentation
24 slides from Air France-klm Sa's earnings presentation, Apr 29, 2024
Slide 1: Results Q1 2024
RESULIS OQ} 2024
Slide 2: Q1 2024 Highlights
Q1 2024 HIGHLIGHTS Benjamin Smith – Chief Executive Officer Air France-KLM 2
Slide 3: Q1 2024 Results
Passengers carried Group revenue Q1 2024 RESULTS +6% +5% 20.9m €6.7bn • Group revenue up 5% compared to last year, slightly 19.7m €6.3bn higher than capacity deployment • Group passenger unit revenue up +2.1% versus last year Q1 2023 1 Q1 2024 2 Q1 2023 1 Q1 2024 2 • Operating result stood at -€489m
Slide 4: Sustained social dialogue across the entire Group
DESPITE STRONG EXTERNAL PRESSURES WE SUSTAINED THE SOCIAL DIALOGUE ACROSS THE ENTIRE GROUP Sustained high-quality social dialogue: • >40 multi-year1 labor agreements signed across all employee groups • Company-wide salary raises, in line with industry trends Dynamic EPS2 across the Group Great place
Slide 5: Q1 2024 Financial Results
Q1 2024 FINANCIAL RESULTS Steven Zaat – Chief Financial Officer Air France-KLM 5
Slide 6: Disruption costs and cargo unit revenue reduction weighed on the operating result
DISRUPTION COSTS AND CARGO UNIT REVENUE REDUCTION WEIGHED ON THE OPERATING RESULT Incidentals • c. €50m one-time payment Operating result evolution salary at KLM In € m • c.€50m disruption costs Q1 2024 Q1 2023 Change -183 Revenues (€ m) 6,654 6,329 +5.1% -100 Operating expenses (€ m) 6,478 6,043 +7
Slide 7: Positive unit revenue performance from passenger network and Transavia
POSITIVE UNIT REVENUE PERFORMANCE FROM PASSENGER NETWORK AND TRANSAVIA 1 Unit Revenue2 Revenues Operating result Operating Q1 2024 vs Q1 2023 Capacity Change Change Change Constant Curr. (€ m) (€ m) margin +3.7% +1.7% 5,096 +3.9% Network -356 -206m -6.3% -3.6 pt 3 +5.0% -26.1% 562 -16.5% Transavia +
Slide 8: Revenue outperforming capacity growth, challenging operations for both airlines
REVENUE OUTPERFORMING CAPACITY GROWTH CHALLENGING OPERATIONS FOR BOTH AIRLINES Capacity Revenues Change Operating Change Operating Change Q1 2024 vs Q1 2023 change (€ m) YoY result YoY margin YoY (€ m) +3% 4,032 +3% -249 -68 -6.2% -1.6 pt +7% 2,735 +8% -290 -163 -10.6% -5.6 pt Miles1 196 47 24.0% +5
Slide 9: Sustained demand translating in solid unit revenue development
SUSTAINED DEMAND TRANSLATING IN SOLID UNIT REVENUE DEVELOPMENT FOR NETWORK AND STRONG YIELD FOR TRANSAVIA Q1 2024 vs Q1 2023 Total Long-Haul Short & Medium-Haul1 Transavia Total 86% 87% 82% 89% 11.1% 12.0% 4.5% 0.6 pt 1.5% 4.1% 2.1% 1.2 pt 2.6% 0.5 pt 0.4% -1.7 pt Premium1 North America Caribbean &
Slide 10: Positive free cash flow supported by promising summer ticket sales
POSITIVE FREE CASH FLOW SUPPORTED BY PROMISING SUMMER TICKET SALES Exceptionals: Solid Cash at hand • €610m one-time payment to the Air - at end March €9.9bn Q1 2024 Free cash flow evolution France flight crew pension fund (CRPN) In € m • €120m deferred social charges and wages taxes Stable leverage
Slide 11: Outlook
OUTLOOK Steven Zaat – Chief Financial Officer Air France-KLM 11
Slide 12: Unit cost outlook confirmed at +1-2% compared to 2023
UNIT COST OUTLOOK CONFIRMED AT +1-2% COMPARED TO 2023 2024 Quarterly unit cost1 per ASK evolution Cost control measures In % year-over-year • Accelerated transformation initiatives on top +4.0% of the 700 existing ones to further increase cost savings both at Group and airline level Disruption 0.8%
Slide 13: Continued solid trend in bookings while capacity is ramping up
CONTINUED SOLID TREND IN BOOKINGS WHILE CAPACITY IS RAMPING UP Long-Haul Short and Medium-Haul Transavia 76% 75% 74% 71% Q2 66% 65% 2023 2024 2023 2024 2023 2024 Q2 2024 +3% +3% +10-15% Capacity (vs. 2023) Forward booking load factor 2023 Forward booking load factor 2024 Snapshot of the 25 of April
Slide 14: New hedging policy in place reducing exposure to upward risks in 2024
NEW HEDGING POLICY IN PLACE REDUCING EXPOSURE TO UPWARD RISKS IN 2024 7.7 7.6 Fuel bill after hedge ($bn) FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Market Brent ($ per bbl) 82 82 87 84 82 84 price Jet fuel ($ per metric ton) 962 946 918 917 911 922 FY 2025 22% hedged Jet fuel ($ per metric ton
Slide 15: Outlook 2024 confirmed
OUTLOOK 2024 CONFIRMED FY 2024 Group Capacity +5% vs. 2023 +1% to 2% Unit cost1 (Q2: +2%) Net Capex €3bn 1) At constant fuel price including SAF, constant currency and excluding Emission Trading Scheme cost (ETS) against 2023 15
Slide 16: Update & Outlook
UPDATE & OUTLOOK Benjamin Smith – Chief Executive Officer Air France-KLM 16
Slide 17: Air France-KLM Group sustainability tracks advance according to plan
AIR FRANCE-KLM GROUP SUSTAINABILITY TRACKS ADVANCE ACCORDING TO PLAN Our sustainability commitment Delivery of 79 new generation aircraft in 2023-2024 in unwraps according to plan… line with our sustainability trajectory and positively affecting our Unit Cost 80% • Delivered in 2023: 7 A350, 3 787-1
Slide 18: Steady ramp up in preparation for ambitious peak summer season
STEADY RAMP UP IN PREPARATION FOR AMBITIOUS PEAK SUMMER SEASON, WITH RIGHT LEVERS IN PLACE Capacity development in line with trajectory to meet peak season demand, supported by strong bookings Reinforced robustness of operations across all segments Fleet Crew Infrastructure Ressources Ensuring a fle
Slide 19: Focus Paris 2024 Olympic and Paralympic Games: Air France official partner
FOCUS PARIS 2024 OLYMPIC AND PARALYMPIC GAMES: AIR FRANCE IS A PROUD OFFICIAL PARTNER CUSTOMER & • Optimized end-to-end journey with proactive OPERATIONS communication • Fluid Hub operations with dedicated tracks & task forces NETWORK & • Agile commercial strategy with dedicated program for COMMERCI
Slide 20: To conclude
TO CONCLUDE • Despite the challenging start of the year marked by continued geopolitical tensions, operational disruptions and headwinds on our cargo business, we remain on track for a resilient trajectory for the coming quarters • We’re actively gearing up for a busy and promising Summer for all of
Slide 21: Appendix
APPENDIX 21
Slide 22: Currency impact on operating result
CURRENCY IMPACT ON OPERATING RESULT Currency impact on revenues and costs In € m -26 Revenues and costs per currency FY 2023 -40 REVENUES COSTS -66 US dollar (and related US dollar Q1 2024 currencies) 30 35 Currency impact on revenues 50 65 20 Currency impact on costs, including hedging Euro Other O
Slide 23: Debt redemption profile at 31 March 2024
DEBT REDEMPTION PROFILE AT 31 MARCH 2024 Debt reimbursement profile(1) In €m 500 500 750 2,600 350 650 650 850 600 600 2024 2025 2026 2027 2028 and beyond Bonds issued by Air France-KLM Other long-term Debt: AF and KLM Sustainability-Linked Bonds Secured Debt, mainly “Asset-backed” 2026: 7.250% (€50
Slide 24: Investor Relations department
Investor Relations department Michiel Klinkers Marouane Mami Michiel.klinkers@airfranceklm.com Marouane.mami@airfranceklm.com