Aeroflot · RUS:AFLT
Aeroflot — Q1 2020 Earnings Presentation
43 slides from Aeroflot's earnings presentation, Jun 2, 2020
Slide 1: Aeroflot Group Q1 2020 IFRS Results
AEROFLOT GROUP Q 1 2 0 2 0 I F R S R E S U LT S 2 June 2020 Speakers: Andrey Chikhanchin – Deputy CEO for Commerce and Finance Andrey Panov – Deputy CEO for Strategy, Service and Marketing Ivan Batanov – Head of Revenue Management
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: Aeroflot Group Q1 2020 Highlights
Aeroflot Group Q1 2020 Highlights PAX Yield Adjusted Net Loss1 External Factors Million PAX RUB / RPK Billion RUB - 12.3 % + 3.3 % + 0.2 % COVID-19 3.67 3.56 (15.7) (15.8) 12.8 mln 11.2 mln Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 • In Q1 2020 Aeroflot Group performance was significantly affe
Slide 4: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 4
Slide 5: Overview of the Russian Market
Overview of the Russian Market Passenger Traffic: Market vs Aeroflot Group Key Market Players Russian Air Transportation Market (million PAX) Change in PAX million incl. PAX of Russian and Foreign Carriers and intl. transit PAX -1.6 7.5% International Routes 11,2 Domestic Routes 147,2 137,0 +0.1 +0.
Slide 6: Material Impact of COVID-2019 Starts from March
Material Impact of COVID-2019 Starts from March Monthly PAX Traffic (Russian Carriers) Capacity (Russian Carriers) and PLF Million PAX Billion ASK, PLF in % January February March April January February March April 30,5 8,9 8,0 26,7 79% 79% 23,5 6,4 69% 4,0 0,7 39% 6.6% 6.4% (28,1)% (92.1)% 10.0% 8.
Slide 7: Domestic Segment Showed Resilience vs. International
Domestic Segment Showed Resilience vs. International PAX Traffic of Russian Airports in March and early April April – International Segment PAX dynamics based on 33 key Russian airports International flights suspended 20% excluding special repatriation flights Total PAX Domestic International -10% O
Slide 8: Aeroflot Group Multi-Brand Strategy Provides for Flexibility in Difficult Times
Aeroflot Group Multi-Brand Strategy Provides for Flexibility in Difficult Times Brand Business Model Q1 2020 PAX Contribution1 and Dynamics April 2020 • Flagship carrier -18.0% 8,5 • Premium product (4 Stars) 6,9 -95% PAX Premium • High income and middle class 6.9 61,9% • Hub and spoke model -89% AS
Slide 9: Pobeda LCC: Timely Value Proposition
Pobeda LCC: Timely Value Proposition Overview Total Traffic an PLF by Month 2.5 January February March mm PAX transported in Q1 2020 (+22.2% y-o-y) PAX, y-o-y 34% 32% 91.2% PLF remained high despite ongoing pressure in March 3% 30 B737NG aircraft with single class cabin (189 seats) PLF 94.4% 94.4% 8
Slide 10: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 10
Slide 11: Aeroflot Group Scheduled Flights Revenue Units
Aeroflot Group Scheduled Flights Revenue Units RUB RUB Q1 Yield (PAX Revenue / RPK) 0.7% Q1 RASK (PAX Revenue 1.1% / ASK) 3.2% RUB / RPK RUB / ASK 6.2% (3.2)% 2,84 (6.0)% 3,97 3.2% 2,77 2,75 3,74 (9.1)% 3,72 0.1% 3,60 2,66 2,60 3,39 3,40 2,42 Domestic International Total Domestic International Total
Slide 12: Aeroflot Group Network Adjustments
Aeroflot Group Network Adjustments Stockholm Helsinki Oslo Murmansk Tallinn Arkhangelsk Salekhard New Urengoy Riga Saint Petersburg Syktyvkar Khanty Mansiysk Yakutsk Surgut Nizhnevartovsk Copenhagen MOSCOW Nizhnekamsk Ekaterinburg Perm Magadan Hamburg Kaunas Minsk MOSCOW Nizhny Novgorod Tyumen Samar
Slide 13: Operating Numbers in Q1 and Q2
Operating Numbers in Q1 and Q2 Total + Domestic International Jan Feb Mar Apr Jan Feb Mar Apr Jan Feb Mar Apr 2% 4% (20)% 6% 6% 5% 0% 2% (35)% (90)% (76)% (99)% 15,0 13,8 ASK 12,1 9,0 8,3 6,0 5,5 6,0 6,1 1,6 1,5 0,1 ASK, bn %, y-o-y ASK, bn %, y-o-y ASK, bn %, y-o-y Jan Feb Mar Apr Jan Feb Mar Apr J
Slide 14: Domestic Segment Reopening: China Case
Domestic Segment Reopening: China Case Domestic Number of Seats Offered in China and Hong Kong Gradually Increases With the Economic Reopening Number of seats offered on domestic routes in China and Hong Kong, thousand seats 2 500 2020 2019 2 000 -25% -40% 1 500 -70% 1 000 500 0 15-Jan 30-Jan 14-Feb
Slide 15: Increased Focus on Cargo
Increased Focus on Cargo Domestic International Comments Tones of cargo and mail Tones of cargo and mail 12,2 14,3 18 WB aircraft 11,2 13,5 deployed for cargo transportation1 9,9 11,5 c30% increase in 6,1 cargo capacity measured vs. normally offered belly 2,7 time and cost- wise efficient Jan Feb Ma
Slide 16: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 16
Slide 17: Fleet Update
Fleet Update Actual and expected additions 2020 Fleet Plans Type of Q1 2020 Fleet as at aircraft Delivery Phase out 31.03.2020 In Q1 2020 Aeroflot Group Wide-body (long-haul) 1 (2) 58 operated 361 aircraft vs 371 A-330 - (2) 19 aircraft in Q1 2019 A-350 1 - 1 B-777 - - 29 B-747 - - 9 Narrow-body (me
Slide 18: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 18
Slide 19: Financial Highlights: Q1 2020
Financial Highlights: Q1 2020 Million RUB (where applicable) Q1 2019 Q1 2020 Change Passenger Traffic (mln PAX) 12,764 11,196 (12.3)% Revenue 138,041 123,894 (10.2)% PAX Traffic Revenue 119,255 106,608 (10.6)% Operating Costs 143,940 137,050 (4.8)% Operating Loss (5,899) (13,156) +2.2x EBITDA 21,333
Slide 20: Revenue Growth Decomposition
Revenue Growth Decomposition Revenue by Key Factors Revenue by Business Segments Million RUB Million RUB 138 041 (17 057) 138 041 (11 252) 10 781 (4,495) 123 894 (3 376) (1 395) 631 (2 131) 123 894 Q1 2019 Volume Currency Pricing Other Q1 2020 Q1 2019 Scheduled Charter Cargo Other Q1 2020 Passenger
Slide 21: Operating Costs
Operating Costs Operating Expenses Breakdown Capacity vs. OpEx Operating Expense Change Change % of OpEx (RUB mln if not stated Q1 2019 Q1 2020 y-o-y ex. FX (Q1 2020) otherwise) Fuel 43,700 38,604 (11.7)% (11.7)% 28.2% Capacity (ASK) : -5% Opex (ex. Fuel) 100,240 98,446 (1.8)% (2.2)% 71.8% Aircraft
Slide 22: Fuel Cost Management
Fuel Cost Management Aeroflot Airline Jet Fuel Price Fuel Efficiency Thousand RUB per tonne of jet fuel (gramme / ASK) (0.8)% 50,0 22,5 22,1 45,0 43,8 Q1 2019 Q1 2020 40,0 41,4 Average fuel price per tonne 35,0 Aeroflot Airline: 33.5 • Q1 2020: 41.4 thousand RUB (-5.5% y-o-y). 30,0 31.1 • March 2020
Slide 23: Pobeda Financial Results
Pobeda Financial Results PAX Traffic and Other Operating Metrics Pobeda Statement of Profit and Loss (IFRS, standalone) Million PAX, Q1 2020 dynamics y-o-y 2,5 2,0 Million RUB Q1 2019 Q1 2020 Change PAX +22% Revenue 8,351 11,114 33.1% ASK +23% Q1 2019 Q1 2020 PLF -1 p.p Operating Expenses 9,396 10,4
Slide 24: Leverage and Liquidity
Leverage and Liquidity Debt Profile1 Net Debt / EBITDA Million RUB 31-Dec-2019 31-Mar-2020 Change 4,4 4,2 Borrowings 15,792 46,397 +2.9x 3,2 Lease Liabilities 557,124 698,979 25.5% Pension Liabilities 784 771 (1.7)% Total Debt 573,700 746,147 30.1% Cash and Short-Term 25,861 37,375 44.5% Investments
Slide 25: Aeroflot's Steps to Navigate COVID-19 Crisis
Aeroflot’s Steps to Navigate COVID-19 Crisis Work stream Comments Results Optimize key fixed cost lines and CAPEX Suspension of non-key spending Special terms with Negotiations with partners and suppliers lessors + ongoing negotiations Restructuring deliveries of the fleet Aircraft deliveries moved
Slide 26: Optimizations with Liquidity in Focus
Optimizations with Liquidity in Focus Optimizing monthly cash outflow1 Reducing 2020 CAPEX State support Billion RUB, Including VAT, monthly average Billion RUB ~65 ~8bn state subsidy ~10-11 Aeroflot is in the list of key companies of the economy - Up to 3x eligible for extra help decrease Down ~ 2x
Slide 27: Agenda
1. Market Update and Operating Results 2. Network and Schedule Overview 3. Fleet Overview 4. Financial Performance 5. Appendix 27
Slide 28: Russian Air Transportation Market: Room for Growth
Russian Air Transportation Market: Room for Growth Russian Total Passenger Traffic Growth, mln PAX1 Trips per Capita2 Total CAGR 8.2% International – 7.9% | Domestic – 8.6% 3,7 147,2 50,0 137,0 123,7 107,3 102,8 2,5 68,1 74,1 00,0 61,1 54,7 46,4 1,1 50,0 0,8 68,8 73,1 0,5 0,3 52,6 56,4 62,6 0,0 2015
Slide 29: Operating Data – Q1 2020
Operating Data – Q1 2020 Indicators Aeroflot Airline Aeroflot Group Unit Q1 2019 Q1 2020 Y-o-Y Q1 2019 Q1 2020 Y-o-Y Passenger Traffic th PAX 8,453 6,930 (18.0%) 12,764 11,196 (12.3%) International Routes th PAX 4,380 3,438 (21.5%) 5,731 4,514 (21.2%) Domestic Routes th PAX 4,073 3,493 (14.2%) 7,033
Slide 30: Operating Data of Subsidiary Airlines – Q1 2020
Operating Data of Subsidiary Airlines – Q1 2020 Indicators Rossiya Pobeda Aurora Q1 2020 Y-o-Y Q1 2020 Y-o-Y Q1 2020 Y-o-Y Passenger Traffic th PAX 1,491 (23.1%) 2,493 22.2% 281 (15.2%) International Routes th PAX 560 (17.4%) 447 (22.8%) 69 (25.1%) Domestic Routes th PAX 931 (26.2%) 2,045 40.1% 212
Slide 31: Aeroflot Domestic and International Transit
Aeroflot Domestic and International Transit Growing Connectivity of Aeroflot Airline’s Flights1 ... … Results into a Flexible Approach to Transit Flows 21,2x 22,0x 23,6x 24,1x 24,2x 0.9 mln 25,9 13.5% 25,5 25,3 25,2 4.3 mln 24,2 62.2% 18,0 18,2 17,8 17,2 17,0 0.9 mln 13.2% 13,1 13,9 14,1 13,6 12,1 0
Slide 32: Q1 2020 Operating Data by Region (Scheduled Routes)
Q1 2020 Operating Data by Region (Scheduled Routes) Americas Russia CIS 6,9 % 5,7 % (8,6)% (9,3)% (4,9)% (4,0)% (7.2) p.p. (6.6) p.p. (13.0) p.p. Passengers RPK ASK PLF Passengers RPK ASK PLF (23,0)% carried carried (29,7)% (32,8)% Passengers RPK ASK PLF carried Europe Middle East Asia (4.9) p.p. (6
Slide 33: Aeroflot Group Fleet Breakdown
Aeroflot Group Fleet Breakdown Aeroflot Group Fleet Overview Breakdown by Aircraft Operated by Total as of Total as of Change vs. Aircraft Type Wide-body Aeroflot Subsidiaries 31-Mar-20 31-Dec-19 31-Dec-19 Narrow-body 16% (medium- Wide-body 39 19 58 59 (1) haul) 65% Airbus A330 19 - 19 21 (2) Narrow
Slide 34: Aeroflot Group Fleet Evolution
Aeroflot Group Fleet Evolution Aeroflot Group Fleet in Operation Average Age of the Fleet 1 Aircraft Average Age Malta Air 3.6 6,9 7.0 Frontier Airlines 4,2 6,4 6,5 6,2 6,2 5,0 366 359 361 IndiGo 5,8 325 289 Hainan Airlines 5,9 247 Wizz Air 5,9 Qatar Airways 6,1 Spirit Airlines 6,1 2015 2016 2017 20
Slide 35: Traffic Revenue Analysis – Q1 2020
Traffic Revenue Analysis – Q1 2020 Traffic Revenue Breakdown by Type Revenue from Scheduled Passengers (RUB mln)1 Q1 2020 Sheduled Passenger Region Q1 2019 Q1 2020 Y-o-Y Flights 91,7% % of sch. revenue Russia 43,133 41,438 (3.9)% 40.6% Europe 29,479 25,208 (14.5)% 24.7% Cargo 4,3% Charter Passenger
Slide 36: Aeroflot Group Blended Flights Revenue Units
Aeroflot Group Blended Flights Revenue Units RUB RUB Q1 Yield (Scheduled + Charter 0.7% PAX Revenue / RPK) Q1 RASK (Scheduled + Charter 1.1% PAX Revenue / RPK) 3.2% RUB / RPK RUB / ASK 6.2% 3,87 3.3% (3.1)% (5.8)% (9.2)% 3,64 3,67 2,82 (0.2)% 2,77 3,56 2,73 2,69 3,42 3,41 2,61 2,44 Domestic Internat
Slide 37: Group Unit Costs
Group Unit Costs Unit Costs Dynamics Capacity: ASK adjustment Billion ASK Operating Expense per ASK (CASK), RUB Q1 2019 Q1 2020 Change (5.1)% Fuel 1.02 0.94 (6.9)% CASK (ex. Fuel): 2.33 2.41 3.5% 43,0 Aircraft and Passenger Servicing 0.67 0.67 0.1% D&A and Customs Duties 0.63 0.64 1.4% 40,9 Staff 0.
Slide 38: EBITDA Evolution
EBITDA Evolution Total effect on revenue Total effect on costs ∑=(14,147) RUB mln ∑=5,868 RUB mln (17 057) 1 521 (2 924) 10 781 (4 496) 1 585 314 (789) 1 471 5 094 21 333 (3 376) Net volume and price effect (404) ∑=6,272 RUB mln 13 054 Net volume and price effect Net FX effect ∑=(10,771) RUB mln ∑=(
Slide 39: Operating and Free Cash Flows
Operating and Free Cash Flows 1 943 (7 016) 33 158 6 533 3 935 (1 286) 746 (736) 11 126 13 818 11 875 10 197 26 022 (31 070) Loss Before D&A Interest Unrealized Other Adj. Cash Flows Working Net Cash Purchase of Deposit Net Pre- Net Lease Free Cash Free Cash Income Tax Expense Net FX Before From Cap
Slide 40: Headcount Overview
Headcount Overview Aeroflot Group Headcount Headcount by Category 31-Dec-2019 31-Mar-2020 % Other non-airline Flight crew personnel 11,3% Flight crew 4,359 4,676 7.3 % 17,4% Cabin crew 12,494 12,756 2.1 % Cabin crew Other airline personnel (incl. airlines’ head office) 19,190 16,642 (13.3)% 30,9% Ot
Slide 41: Board of Directors
Board of Directors Corporate Governance Board of Directors Personnel and Audit Strategy Name Remuneration General Meeting of Audit Committee Committee Committee Committee Shareholders (3 members) Evgeny Ditrich Chairman Mikhail Deputy Chairman Poluboyarinov Personnel and Remuneration Vitaly Saveliev
Slide 42: Aeroflot Group Structure
Aeroflot Group Structure PJSC Aeroflot Airlines Ancillary Companies JSC Rossiya Airlines 75%-1 sh. JSC Aeromar 51% On-board sales/catering LLC Pobeda Airlines 100% LLC Aeroflot-Finance 100% Financial services JSC Aurora Airlines 51% JSC Sherotel 100% Hotel services Aeroflot Aviation School 100% Educ
Slide 43: Investor Relations Contacts
Investor Relations Contacts Address: 119019, Russia, Moscow, Arbat St. 1 E-mail: ir@aeroflot.ru Website: www.aeroflot.ru