Japan Airlines Co., Ltd. · TSE:9201
Japan Airlines — Q2 FY2020 Earnings Presentation
25 slides from Japan Airlines's earnings presentation, Oct 30, 2020
Slide 1: Financial Results 2nd Quarter Mar/2021 (FY2020)
JAPAN AIRLINES Co., Ltd. Financial Results 2nd Quarter Mar/2021 (FY2020) October 30, 2020 Boeing 767 (JA613J) Specially Painted Aircraft for Domestic Routes In the midst of a gloomy atmosphere in our society, JAL Group employees (mechanics) wished to cheer up people in Japan and painted the bottom o
Slide 2: Today's Topics
Today’s Topics PERFORMANCE OVERVIEW OF 1st HALF P.3 FY2020 EARNINGS FORECAST FOR FY2020 P.4 LATEST INITIATIVES P.5 TOWARD THE NEW NORMAL P.7 DETAILS OF FINANCIAL RESULTS FOR P.10 1st HALF FY2020 REFERENCES P.19 IFRS is adopted from the fiscal year ending Mar 2021, instead of the previously used Japa
Slide 3: Financial Results for the 1st Half of FY2020
Financial Results for the 1st Half of FY2020 ✓ Large drop in revenue due to the COVID-19 pandemic ✓ Despite the cost reduction efforts, we were unable to cover the decline in revenue and posted a significant loss Revenue(1) EBIT (1)(2)/Profit or Loss (1)(3)/EBIT Margin(1)(4) （JPY Bn） （JPY Bn） Net EB
Slide 4: FY2020 Earnings Forecast
FY2020 Earnings Forecast ✓ Based on IATA's demand forecast, we assume demand recovery within a certain range, taking into account the recent passenger demand trends, the current status of COVID-19 and the gradual lifting of immigration restrictions ✓ Full-year EBIT for the fiscal year ending March 3
Slide 5: Cost and CAPEX Reduction Initiatives
Cost and CAPEX Reduction Initiatives Cost Reduction CAPEX Reduction Fixed Cost We are targeting 90 Bn JPY reduction by adding 10 Bn JPY to the previous forecast of 80 Bn JPY ◼ We are targeting 100 Bn JPY reduction by adding reduction compared to the original plan 10 Bn JPY to the previous target (90
Slide 6: Bolstering Liquidity
Bolstering Liquidity ✓ Secured 346.6 Bn JPY cash at hand as of the end of September by prompt financing and reducing cash outflows ✓ Plan to set up additional 100 Bn JPY credit facility to secure further liquidity ✓ Cash burn keeps steadily declining in Q2 Cash Balance & Credit Facility Cash Burn(1)
Slide 7: Passenger Demand Assumption toward the New Normal
Passenger Demand Assumption toward the New Normal ✓ Based on IATA's demand forecast, we have set the passenger demand assumptions considering the characteristics of our home market and other factors ■Int’l Passenger: Assumed recovery to approx. 80% of the pre-COVID-19 level by the end of FY2022 and
Slide 8: Strategic Direction Toward New Normal
Strategic Direction Toward New Normal Path to Recovery of Enterprise Value Our Structural Restructuring Outcome Responsibilities Safety and Restructuring the Comfort Business Structure Reconstruction of Endure COVID-19 Improve profitability / a strong financial Pandemic / take initiatives for SDGs p
Slide 9: Structural Review for the New Normal
Structural Review for the New Normal Restructuring of the Business Structure Take initiatives for Growth and Improve Profitability / Take Initiatives for SDGs Risk Tolerance ◼ FSC Business ◼ LCC Business Flexible adjustments of fleets and retirement of aged aircrafts Strengthen LCC business to captu
Slide 10: Financial Results (Details)
FINANCIAL RESULTS (DETAILS) ©Japan Airlines, ALL rights reserved. 10
Slide 11: Consolidated Financial Results for 1st Half FY2020
Consolidated Financial Results for 1st Half FY2020(1) 1st Half 1st Half 2nd quarter （JPY Bn） Diff. y/y Diff. y/y FY2019 FY2020 FY2020(6) Revenue 748.9 194.7 ▼554.1 ▼74.0% 118.4 ▼281.7 ▼70.4％ International 272.9 9.1 ▼263.7 ▼96.6% 6.4 ▼135.8 ▼95.5％ Passenger Domestic 285.8 69.6 ▼216.1 ▼75.6% 50.6 ▼108
Slide 12: Changes in EBIT (Revenues/Expenses)
Changes in EBIT（Revenues／Expenses）(1) （JPY Bn） (2) ASK y/y： ▼73.5% ＋ stands for profit increase (revenue increase, cost decrease) ▼ stands for profit decrease (revenue decrease, cost increase) RPK y/y： ▼89.2％ ▼306.9 82.9 1st Half FY2019 ▼263.7 ▼223.9 Int’l Passenger Other Others(4) Expenses ▼96.6％ ▼
Slide 13: International/Domestic Passenger Operations
International/ Domestic Passenger Operations ✓ Significantly reduced the capacity for international passengers as demand falls rapidly in COVID-19 ✓ Domestic demand have gradually recovered since September after a temporary dip in August due to an increased cases of COVID-19. Unit price was down due
Slide 14: Cargo / Mail
Cargo / Mail ✓ Despite a significant decrease in volume, revenue exceeded the previous year (+18% yoy) due to price hike ✓ Tight supply-demand situation continues as capacity is being reduced worldwide ✓ Cargo flights utilizing passenger aircrafts totaled at 7,228 in 1 st half of FY2020 ✓ ZIPAIR als
Slide 15: Major Operating Expense Items
Major Operating Expense Items (1) ✓ Reduced revenue- and capacity-linked costs, equivalent of approximately 40% of reduced revenue (217.8 Bn JPY) ✓ Fixed costs has also decreased more than estimated（Details on P.5） 2nd 1st Half 1st Half （JPY Bn） Diff. y/y quarter Diff. y/y FY2019 FY2020 FY2020(4) Re
Slide 16: Summary of Consolidated Statement of Financial Position and Cash Flow
Summary of Consolidated Statement of Financial Position and Cash Flow(1) ✓ Have secured sufficient long-term funding with the cash balance of 346.6 Bn JPY and the credit BS facility of 300 Bn JPY, while the repayment within one year is only 50.9 Bn JPY ✓ D/E Ratio is still at a sound level of 0.6x i
Slide 17: Current Outlook (COVID-19 Impact)
Current Outlook（COVID-19 Impact) ✓ International passenger business is showing signs of recovery backed by ease of travel restrictions mainly for business trips among some countries ✓ Domestic passenger business is steadily recovering as a mood of self-restraint in traveling has been eased since lat
Slide 18: Approach Toward Demand Recovery
Approach Toward Demand Recovery New Type of Trip Under “New Normal” / the revitalization of local communities Reasonable JAL Online Trip Regional Vitalization Division Self-PCR Test (Workation） (Homeland Ambassador) LCC：ZIPAIR Leverage Talent ✓ Launched passenger services to/from Tokyo-Seoul and fro
Slide 19: References
REFERENCES ©Japan Airlines, ALL rights reserved. 19
Slide 20: Operation Performance by Geographic Segment
《Reference》 Operation Performance by Geographic Segment Passenger Revenue Revenue Passengers Carried (1) (2) 1st Half 2nd quarter 1st Half % 1st Half 2nd quarter (%) % (‘000) y/y y/y FY2019 FY2020 FY2019 FY2020 y/y FY2020 y/y America ▼96.7% ▼95.0% 28% 28% 30% America 819 29 ▼96.4% 21 ▼95.0% Europe ▼
Slide 21: Fleet Information
《 Reference 》 Fleet Information End of FY2019 End of 2nd Quarter FY2020 (March 31, 2020) (June 30, 2020) Diff. Owned Leased Total Owned Leased Total Airbus A350-900 4 1 5 2 4 6 +1 Boeing 777-200 11 0 11 9 0 9 ▼2 Boeing 777-200ER 11 0 11 11 0 11 - Boeing 777-300 4 0 4 4 0 4 - Boeing 777-300ER 13 0 13
Slide 22: Accounting Impact by IFRS Adoption
《Reference》 Accounting Impact by IFRS Adoption Profit/Loss Statement ◼ Due to changes in accounting rules for mileage points, revenue allocated to mileage points is deferred as a liability, and recognized when miles are redeemed (The impacts to Profit/loss are limited) ◼ Our main index for performan
Slide 23: Anti-COVID-19 Measures
Anti-COVID-19 Measures Appeal of Flysafe Environment ◼ In-cabin air is replaced in two to three Cabin in Cabin minutes ◼ Air flows from top to bottom In-cabin Air Flow Image ◼ Passengers do not get on/off during the flight ◼ Passengers face to the same direction ◼ HEPA Filter is equipped HEPA Filter
Slide 24: Fly into tomorrow.
Fly into tomorrow. Finance & Investor Relations, Japan Airlines ©JapanAirlines, ©Japan Airlines, ALL ALL rights rightsreserved. reserved.
Slide 25: Disclaimer
Disclaimer This content contains descriptions of the future expectations, outlooks, objectives and plans etc. of Japan Airlines Co., Ltd. (hereafter "the company") and related Group companies (hereafter "the Group"). These are based on information available at the time when these materials were crea