Qantas Airways Limited · ASX:QAN
Qantas Airways — H1 2016 Earnings Presentation
25 slides from Qantas Airways's earnings presentation, Feb 23, 2016
Slide 1: Qantas Airways Limited 1H16 Results Supplementary Presentation
For personal use only Qantas Airways Limited 1H16 Results Supplementary Presentation 23 February 2016 ASX: QAN US OTC: QABSY
Slide 2: Group Performance
For personal use only Group Performance
Slide 3: Key Metrics
Key Metrics For personal use only KEY GROUP FINANCIAL METRICS 1H16 1H15 VLY%5 Underlying PBT1 ($M) 921 367 >100 Statutory profit before tax ($M) 983 289 >100 Statutory earnings per share (c) 31.9 9.2 >100 12 Month ROIC (%) 22.8 4.1 18.7pts 6 Month Year to Date ROIC (%) 13.1 6.6 6.5pts Revenue ($M) 8
Slide 4: Underlying Income Statement Summary
Underlying Income Statement Summary For personal use only $M 1H16 1H15 VLY2 % Unit revenue improvement of 2% driven by network Net passenger revenue 7,307 6,947 5.2 optimisation across the domestic and international markets and capacity growth from increased aircraft utilisation Freight fuel surchar
Slide 5: Other Items Not Included in Underlying PBT
Other Items Not Included in Underlying PBT1 For personal use only $M 1H16 1H15 Total ineffectiveness of and non-designated derivatives 14 31 relating to other reporting periods Redundancy, restructuring and other costs as part of the $2b Transformation costs 48 42 Qantas Transformation program Gain
Slide 6: Reconciliation to Statutory PBT
Reconciliation to Statutory PBT For personal use only $M 1H16 1H15 Underlying1 Ineffectiveness Other items Statutory Underlying1 Ineffectiveness Other items Statutory relating to other not included in relating to other not included in reporting Underlying reporting Underlying periods PBT periods PBT
Slide 7: Revenue Detail
Revenue Detail For personal use only Revenue ($B) Net passenger revenue up 5% • Group unit revenue improved 2% 5% 8.5 • Network optimisation across domestic and international, additional 8.1 flying activity with the introduction of new routes and seasonal flying • Favourable impact of FX Net freight
Slide 8: Expenditure Detail
Expenditure Detail For personal use only Fuel costs down 21% • 22% reduction in effective AUD fuel price1 • Improvement in fuel efficiency from Qantas Transformation fuel initiatives Expenditure ($B) Manpower and staff-related up 5% • 3.8% increase in flying activity; cabin crew recruitment 7.6 (2)%
Slide 9: Cash Flow
Cash Flow For personal use only $M 1H16 1H15 VLY % • Strong operating cash flows of $1.4 billion Operating cash flows 1,373 703 95 – Includes $185m future income deferred on balance sheet from the sale of Sydney Investing cash flows (excluding aircraft operating Airport Terminal Three (603) (509) (1
Slide 10: Invested Capital Calculation
Invested Capital Calculation For personal use only Invested Capital ($M) 1H16 FY15 1H15 • Refinanced 24 operating leased aircraft to unencumbered owned aircraft3 Receivables (current and non-current) 967 1,093 1,199 – Decrease in capitalised operating leased Inventories 337 322 306 assets Other asse
Slide 11: Improvement in Total and Ex-Fuel Unit Cost
Improvement in Total and Ex-Fuel Unit Cost For personal use only • Total Unit Cost improvement driven by reduction in fuel expense • Ex-fuel unit cost1 improvement of 0.4% from Qantas Transformation benefits C/ASK 1H16 1H15 VLY % Total Unit Cost2 7.23 7.79 7.2 Excluding: • Fuel (2.30) (3.01) • Chang
Slide 12: Group Operational Information
For personal use only Group Operational Information
Slide 13: Fleet at December 2015
Fleet at 31 December 2015 For personal use only Aircraft Type 1H16 FY15 Change A380-800 12 12 - • Net addition of 1 aircraft in 1H16 B747-400 5 6 (1) B747-400ER 6 6 - – 4 aircraft deliveries: A330-200 18 17 1 3 x B787-8, 1 x F100 A330-300 10 10 - – 1 aircraft retired: B737-800NG 75 75 - 1 x B747-400
Slide 14: Focus on Utilisation for Cost Efficient Growth
Focus on Utilisation for Cost Efficient Growth For personal use only • Qantas Domestic reduced turn times Qantas Domestic Utilisation1 Jetstar Narrowbody Utilisation1 – Rollout of dual door boarding +5% +7% – Improved cabin baggage management – Operating and capital efficiency benefits • Qantas Inte
Slide 15: Supplementary Segment Information
For personal use only Supplementary Segment Information
Slide 16: Jetstar Group
Jetstar Group For personal use only Jetstar Group 1H16 1H15 VLY % Revenue $M 1,913 1,773 7.9 5 Underlying EBIT $M 262 81 >100 6 Operating Margin1 % 13.7 4.6 9.1pts ASKs M 24,622 23,591 4.4 RPKs M 20,234 18,939 6.8 Passengers ‘000 11,791 11,261 4.7 4 Seat factor % 82.2 80.3 1.9pts 2 OWNERSHIP2 LAUNCH
Slide 17: Jetstar Domestic
Jetstar Domestic For personal use only • Record 1H16 result1 underpinned by strong yield performance Jetstar Domestic 1H16 1H15 VLY % − 10% unit revenue2 improvement with strong low fares demand ASKs M 9,750 9,474 2.9 − Ancillary revenue per passenger growth of 6% driven by new RPKs M 8,273 7,889 4.
Slide 18: Jetstar International
Jetstar International For personal use only • Record 1H161 result despite negative impact of Indonesian Jetstar International 1H16 1H15 VLY % volcanoes: (excl. Jetstar Asia & Jetstar New Zealand) ASKs M 9,769 9,182 6.4 – B787-8 widebody fleet in place; increased seats, cost benefits and improved cus
Slide 19: Jetstar Asia (Singapore)
Jetstar Asia (Singapore) For personal use only • Profitable1 in 1H16 despite aggressive competitor activity Jetstar Asia 1H16 1H15 VLY % ─ Unit revenue challenged with significant market capacity growth ASKs M 4,337 4,203 3.2 • Increased network connectivity, leveraging scale of brand RPKs M 3,480 3
Slide 20: Jetstar Japan
Jetstar Japan For personal use only • First time profitable1 with improvement in all key metrics Jetstar Japan 1H16 1H15 VLY % ─ Strong unit revenue2 up 6% on 22% capacity growth ASKs M 3,002 2,463 22 ─ Ancillary revenue up 12%3 RPKs M 2,526 1,843 37 ─ Controllable unit cost4 improvement Passengers
Slide 21: Jetstar Pacific (Vietnam)
Jetstar Pacific (Vietnam) For personal use only • Strong growth in network with fleet increase to 12 aircraft Jetstar Pacific 1H16 1H15 VLY % ─ Domestic: 6 new routes plus additional frequencies ASKs M 1,975 1,333 48 ─ International: Hong Kong added, expansion of Chinese RPKs M 1,649 1,177 40 charte
Slide 22: Qantas Loyalty
Qantas Loyalty For personal use only • 11.2 million members – 6% growth 1H16 1H15 VLY % • 93,000 Aquire members – 93% growth1 Revenue $M 734 669 9.7 • Growth in member redemptions Underlying EBIT $M 176 160 10 − +7% Qantas International Classic redemptions1 Deferred Revenue $M 40 68 (41) Growth3 − +
Slide 23: Qantas Assure
Qantas Assure For personal use only • Health insurance joint venture with nib, combining leading insurance products with distribution reach, marketing and loyalty expertise of Qantas − Targeting 2-3 per cent share of Australian private health insurance market on a revenue basis − Value shared equall
Slide 24: Overview of Qantas Loyalty Value Chain
Overview of Qantas Loyalty Value Chain For personal use only Business Model Sources of Value _Coalition Loyalty_ _Adjacent Businesses_ Marketing Revenue: percentage of price per point recognised upfront for the service Loyalty provides its Core earnings stream Leveraging core to Earn Partners. An a
Slide 25: Disclaimer & ASIC Guidance
Disclaimer & ASIC Guidance For personal use only 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 23 Febr