Air France-klm Sa · EURONEXT:AF
Air France-klm Sa — Conference Presentation (September 2019)
36 slides from Air France-klm Sa's conference presentation, September 2019
Slide 1: Conference & Roadshow deck
Air France-KLM Conference & Roadshow deck O U P R G - K L M August / September 2019 E A N C R F A I R 1
Slide 2: Content
Content 1. Strategic orientations 2. First half 2019 results 3. Outlook 4. Appendix
Slide 3: Strategic Orientations
3 A I R F R A N C E - K L M G R O U P STRATEGIC ORIENTATIONS
Slide 4: A strong position in the competitive airline marketplace
A strong position in the competitive airline marketplace 548 aircraft 2,000 aircraft maintained for 200+ clients 318 destinations 88,800 full-time employees+ 74 new routes in 118 countries added in 2018 101m+ passengers 1.1m tons of cargo carried in 2018 transported in 2018
Slide 5: A strong position in the competitive airline marketplace
A strong position in the competitive airline marketplace Outstanding professionalism and commitment of the Group employees Paris-CDG & Amsterdam- Schiphol: Strong presence 2 of the largest connecting in all major markets hubs in Europe Leverage The European pillar our powerful of the leading global
Slide 6: Strong brands benefiting from exceptional reputations
A strong position in the competitive airline marketplace… …relying on strong brands benefiting from exceptional reputations • The Group’s low-cost business • Globally recognized as • An efficient network airline • Point-to-point flights to premium airline • Primarly focused Europe from the Netherlan
Slide 7: Three priorities laying the foundation to regain the leading position in Europe
Three priorities laying the foundation to regain the leading position in Europe Conclusion of new, • Representing a major step towards rebuilding confidence balanced labor and trust agreements at Air • Enabling necessary flexibility to implement future France commercial strategy Simplified • Key goa
Slide 8: Simplifying and strengthening Air France-KLM's offer through network optimization
Simplifying and trengthening Air France-KLM’s offer through network optimization From several over-lapping brands to a simplified brand portfolio Objective: provide greater clarity for customers and more consistency with the Group's global commercial product offer • Decision to integrate Joon employ
Slide 9: Delivering the best product offer to our clients
Delivering the best product offer to our clients • Right-sized cabins and more efficient aircraft interior configurations, to serve each market segment with appropriate gauge and product • Aircraft retrofit to latest cabin standards to be accelerated • All aircraft retrofit completed at KLM • Flight
Slide 10: Simplifying and optimizing the fleet
Simplifying and optimizing the fleet LONG-HAUL MEDIUM-HAUL FLEET FLEET • Fuel efficient aircraft: • Firm orders for 60 Airbus 6 Boeing 787 and 3 Airbus 350 to enter the A220 combined fleet in 2019, more to come in the following years REGIONAL • Swap orders between Air France and KLM: the 6 FLEET Boe
Slide 11: Boosting our competitiveness
Boosting our competitiveness The strategy of upgrading and simplifying the product offer and optimizing the fleet aims to reinforce the Group’s competitiveness, and we will go further: • Achieve Air France profitability in order to increase its margin to industry standards • Improve the operational
Slide 12: Results presentation
Air France-KLM Results presentation O U P R G - K L M FIRST HALF 2019 31 JULY 2019 E A N C R F A I R 1 2
Slide 13: Increased operating result and improved passenger unit revenue
Increased operating result and improved passenger unit revenue O U P Passengers Passenger unit revenue(1) R Long-haul driving the improvement of unit +5.1% +0.8% G revenue as anticipated - K L M 26m 28m E Operating result increase reflecting unit cost A N C Q2 2018 Q2 2019 Q2 2018 Q2 2019 improvemen
Slide 14: Financial Review
Financial O U P Review R G Frédéric Gagey - K L M E A N C R F A I R RESULTS AT 30 JUNE 2019 14
Slide 15: Operating result at €400 million with unit revenue and unit cost improvement
Operating result at €400 million with passenger unit revenue and unit cost improvement Change Q2 2019 Q2 2018 Change at constant currency O U P Revenues (€ bn) 7.05 6.63 +6.4% +4.5% R G Fuel expenses (€ bn) 1.40 1.18 +18.6% +10.3% - K L M EBITDA (€ m) 1,147 1,049 +9.3% +11.6% E Operating result (€ m
Slide 16: Positive unit revenue trend in Passenger airlines and Maintenance drive margin improvement
Positive unit revenue trend in Passenger airlines and Maintenance drive margin improvement at Group level O U P Operating Operating Capacity Unit Revenue Revenues Q2 2019 (1) Constant Curr.(2) (€ m) Change Result Change Margin Change (€ m) R G - K L M +3.9% +0.9% E A N C Network 6,016 +5.6% 291 +55m
Slide 17: Long-haul driving the improvement of unit revenue as anticipated
Long-haul driving the improvement of unit revenue as anticipated Unit revenue Revenue share Q2 2019 O U P ex-currency long-haul Yields and load factors for all long haul R G Q2 2019 H1 2019 networks, except Latin American: - K L M North America +2.6% +0.4% 32% North American network positive unit
Slide 18: Unit revenue growth in both premium and economy
Unit revenue growth in both premium and economy Total RASK ex currency O U P Q2 2019 3.9% 5.7% 0.9% Premium Economy R ASK RPK RASK ex cur. 1.8% 0.7% G - K L M Medium-haul point-to-point Medium-haul hubs Total medium-haul 4.6% 5.8% E 6.1% 8.2% 0.2% A N C -2.5% -5.9% -9.1% -1.9% ASK RPK RASK ex cur. A
Slide 19: Unit cost down in line with the full year guidance
Unit cost down in line with the full year guidance Q2 2019 underlying unit cost O U P R Lower customer compensation, notably linked to a G high base because of last year strike in Air France - K L M +1.0% -2.0% E A N C New cost reduction actions for Air France, -2.3% following external consultation
Slide 20: Air France operational performance improvement continuing
Air France operational performance improvement continuing Air France On Time Performance (A14) ranking Air France Net Promoter Score trend O U P R 6th G 7th - K L M 11th 12th 39 12th KLM 13th 14th E 15th A N C 16th 22nd 21st 23 24 25 31st R 18 19 F A I R JUL18 AUG18 SEP18 OCT18 NOV18 DEC18 JAN19 FEB
Slide 21: Non-fuel unit cost improvement partly offset by fuel bill increase
Non-fuel unit cost improvement partly offset by fuel bill increase Q2 2019 O U P Operating result development in € m R G - K L M E A N C R F A I R Passenger 53 Hedging delta -154 Revenue 123 Cargo -54 Fuel price delta 78 Fuel -89 Cost -52 Q2 2018 Activity change Unit revenue Unit cost Fuel price Cur
Slide 22: Air France improvement explained by last year strike, KLM impacted by fuel
Air France improvement explained by last year strike, KLM impacted by fuel Operating Operating Capacity Revenues Change Change Change Q2 2019 change (€ m) YoY Result YoY Margin YoY O U P (€ m) R +6.4% 4,284 +9.1% 143 +130 3.3% +3.0 pt G - K L M +2.1% 2,899 +3.7% 258 -70 8.9% -2.8 pt E +4.5% 7,050 +6
Slide 23: Net debt down, leverage ratio improved slightly further
Net debt down, leverage ratio improved slightly further, on track for full year guidance of below 1.5x First half 2019 Net Debt evolution Net debt/EBITDA(2) O U P Free cash flow evolution In € m R In € m G (H1 2018: +833) 1.5x 1.4x 787 (H1 2018: -1,488) - K L M 31 Dec 2018 30 Jun 2019 E A N C (H1 20
Slide 24: Outlook
Outlook O U P R Results at 30 june 2019 G - K L M E A N C R F A I R 24
Slide 25: Revenue Outlook
Revenue Outlook Long-haul forward booking load factor Based on the current data O U P (change vs previous year) for Passenger network: R G - K L M +3 pt +3 pt E +2 pt July 2019 load factor stable A N C +1 pt R Long-haul forward booking load factors from F August to December are on average higher A I
Slide 26: Fuel bill increase by €550 million in 2019
Fuel bill increase by €550 million in 2019, explained by lower positive hedge impact compared to 2018 (1) (1) 2018: 2018 $ bn 6.3 (1) 1.7 O U P (1) (1) 6.2 (1) 1.6 1.6 Fuel bill €4.9bn(2) 1.4 R 2019: 2019 G (1) Fuel bill €5.5bn(2) 5.8 - K L M 2020: 2020 E Fuel bill €5.5bn(2) A N C 2018 2019 2020 Q1
Slide 27: Full year guidance update
Full year guidance update O U P Previous guidance Guidance 2019 Passenger +2.0% to +3.0% +2.0% to +3.0% R Capacity G growth Transavia +9% to +11% +7% to +9% - K L M Fuel +€650m +€550m E A N C R Currency Neutral effect Neutral effect F A I R Unit cost (1) Ex-currency at -1% to 0% -1% to 0% constant f
Slide 28: Appendix
Appendix Results at 30 june 2019 28
Slide 29: Operating result at €97 million, further net debt reduction
Operating result at €97 million, further net debt reduction thanks to positive free cash flow €351 million H1 2019 H1 2018 Change Change at constant currency O U P Revenue (€ bn) 13.04 12.43 +4.9% +3.3% R Fuel expenses (€ bn) 2.61 2.25 +16.0% +8.2% G - K L M EBITDA (€ bn) 1,571 1,670 -5.9% -2.0% Ope
Slide 30: Revenue growth for all businesses in first half 2019
Revenue growth for all businesses in first half 2019 Operating Operating Unit Revenue Revenues H1 2019 Capacity(1) Constant Curr. (2) (€ m) Change result Change margin Change (€ m) O U P +3.2% -0.2% R G Network 11,191 +3.8% 12 -138m 0.1% -1.3 pt - K L M +2.1% -5.7% E A N C R Transavia +10.0% -0.4% 7
Slide 31: Long-haul offsetting the negative performance in medium-haul
Long-haul offsetting the negative performance in medium-haul Total RASK ex cur. O U P H1 2019 3.2% 3.8% Premium Economy -0.2% R ASK RPK RASK ex cur. +0,6% -0,5% G - K L M Medium-haul point-to-point Medium-haul hubs Total medium-haul E 4.4% 5.9% 3.1% 4.3% A N C -2.7% -0.7% -4.0% -6.2% -2.1% ASK RPK R
Slide 32: Fuel bill sensitivity for full year 2019
Fuel bill sensitivity for full year 2019 O U P $10 Bln $9 Bln Market 64.5 $/bbl R G AFKL price 2018 63.9 $/bbl $8 Bln Hedge gain + 0.6 $/bbl - K L M $7 Bln E A N C $6 Bln Fuel bill $5 Bln R F A I R $4 Bln $3 Bln $2 Bln Price before hedge (in $/bl) without ITP $1 Bln Price after hedge (in $/bl) witho
Slide 33: Currency impact on operating result
Currency impact on operating result Currency impact FY 2019 guidance O U P on revenues and costs Currency impact FY 2019: no effect, based on spot €/$ 1.13 R In € m G Net operational exposure hedging for 2019: -62 - K L M USD ~60% JPY ~50% GBP ~75% 141 E 122 A N C 108 Revenues and costs per currency
Slide 34: Adjusted net income of the Group
Adjusted net income of the Group Q2 2019 O U P In € m R G - K L M E A N C R F A I R Unrealized foreign exchange result: -12 Net income Discontinued No current Value of hedging Balance sheet Depreciation of shares Adjusted net Group part operations result portfolio valuation available for sale income
Slide 35: Pension details at June 2019
Pension details at 30 June 2019 In € m O U P R G 31 Dec 2018 30 Jun 2019 - K L M -1,767 -2,111 E Net balance sheet situation by airline Net balance sheet situation by airline A N C -81 R -250 F -1,686 -1,861 A I R Air France Air France end of service benefit plan (ICS): pursuant to French regulation
Slide 36: Debt reimbursement profile at June 2019
Debt reimbursement profile at 30 June 2019 Debt reimbursement profile(1) O U P In € m R G - K L M 650 E 400 600 A N C 400 1,450 R 850 800 F 550 600 400 A I R 250 2019 2020 2021 2022 2023 2024 2025 and beyond Bonds issued by Air France-KLM Air-France KLM Other Long-term Debt : AF and KLM June 2021: M
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