Virgin Australia Holdings Limited · ASX:VGN
Virgin Australia — 1H19 Earnings Presentation
21 slides from Virgin Australia's earnings presentation, February 2019
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Slide 2: Summary of 1H19 Group Outcomes
SUMMARY OF 1H19 GROUP OUTCOMES S t r o n g f i r s t h a l f p e r f o r ma n c e • 1H19 $112.3m up $30.4m on 1H18 UNDERLYING PROFIT ✓ BEFORE TAX (UPBT) • Highest 1H underlying result in 11 years • Delivered despite $88.2m fuel and FX headwinds • Statutory profit after tax of $73.8m up $69.4m on 1H1
Slide 3: Summary of 1H19 Group Outcomes
SUMMARY OF 1H19 GROUP OUTCOMES S t r o n g f i r s t h a l f p e r f o r ma n c e CASH GENERATED FROM • $276.4m for 1H19 representing $5.8m (+2.1%) ✓ OPERATING ACTIVITIES improvement on 1H18 • $67.8m Free Cash Flow improvement on 1H18 IMPROVED FREE CASH ✓ FLOW GENERATION − Driven by improved earning
Slide 4: 1H19 Summary Group Results
1H19 SUMMARY GROUP RESULTS Record 1H underlying result despite higher fuel costs and s u p p o r t e d b y t h e c o r e VA D o me s t i c b u s i n e s s PROFIT AND LOSS Measure 1H18 1H19 Change Group Revenue ($m) 2,791.0 3,071.0 +10.0% EBITDAR ($m) 534.9 560.6 +4.8% EBITDA ($m) 334.1 369.9 +10.7%
Slide 5: 1H19 Summary Group Results
1H19 SUMMARY GROUP RESULTS B e t t e r B u s i n e s s p r o g r a m d r i v i n g s u s t a i n a b l e i mp r o v e me n t KEY BALANCE SHEET AND CASH FLOW METRICS Measure 1H18 1H19 Change Cash Generated from Operating Activities ($m) 270.6 276.4 +2.1% Free Cash Flow ($m) (97.5) (29.7) +69.5% Finan
Slide 6: Better Business Program
BETTER BUSINESS PROGRAM C o n t i n u e d i mp r o v e me n t i n k e y me t r i c s d e s p i t e w e a k e r A U D ADJUSTED NET DEBT ($M) ROLLING 12 MONTH EBITDA ($M) BBP BBP 4,376 4,222 590.2 4,077 3,935 3,475 494.9 411.3 441.9 197.6 1H15 1H16 1H17 1H18 1H19 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 FIN
Slide 7: 1H19 Summary Group Results
1H19 SUMMARY GROUP RESULTS C o n t i n u e d s t r e n g t h i n VA D o me s t i c p e r f o r ma n c e d r i v i n g r e c o v e r y o f increased fuel costs 1H19 GROUP UNDERLYING PROFIT PERFORMANCE ($M) + 30.4 112.3 3.1 (0.7) 13.0 81.9 22.9 (88.2) 80.3 1H18 UPBT Fuel & FX VA Domestic1 VA Tigerair
Slide 8: Virgin Australia Domestic
VIRGIN AUSTRALIA DOMESTIC R e c o r d U n d e r l y i n g E B I T p e r f o r ma n c e f o r c o r e o p e r a t i n g s e g me n t KEY UNDERLYING METRICS Measure 1H18 1H19 Change Key financial and operational milestones • Record EBIT performance Revenue ($m) 1,887.5 2,082.3 +10.3% • Record Yield an
Slide 9: Virgin Australia International
VIRGIN AUSTRALIA INTERNATIONAL S t r o n g Yi e l d a n d p a s s e n g e r g r o w t h w i t h n e w r o u t e s a n d i n c r e a s e d t r a n s - Ta s m a n f r e q u e n c i e s KEY UNDERLYING METRICS Measure 1H18 1H19 Change Continued investment in the Greater China strategy Revenue ($m) 578.0
Slide 10: Tigerair Australia
TIGERAIR AUSTRALIA S t r o n g Yi e l d a n d u n i t r e v e n u e p e r f o r ma n c e a mi d f l e e t s i mp l i f i c a t i o n KEY UNDERLYING METRICS Measure 1H18 1H19 Change Key financial and operational milestones • Significant improvement in EBITDA despite Revenue ($m) 302.3 302.6 +0.1% $12
Slide 11: Velocity Frequent Flyer
VELOCITY FREQUENT FLYER R e v e n u e g r o w t h f r o m a c o mb i n a t i o n o f n e w me mb e r s a n d p a r t n e r s KEY UNDERLYING METRICS Measure 1H18 1H19 Change Focus on strengthening member engagement Revenue ($m) 191.3 208.9 +9.2% • Record redemption levels for rewards EBITDA ($m) 59.2
Slide 12: Hedging Update and Outlook
HEDGING UPDATE AND OUTLOOK Hedging providing effective protection across FY19 and FY20 against higher fuel costs and lower AUD relative to the USD Hedging Update FY19 Group Outlook • Based on forward bookings, Group revenue in Input Remaining FY19 FY20 3Q19 is expected to grow by at least 7% on the
Slide 13: Supplementary Financial Slides
SUPPLEMENTARY \p FINANCIAL SLIDES wus
Slide 14: Group Financial Summary
GROUP FINANCIAL SUMMARY C o n t i n u e d i mp r o v e me n t i n U n d e r l y i n g P r o f i t B e f o r e Ta x a n d s t a t u t o r y p r o f i t me t r i c s Group Financial Summary ($m) 1H18 1H19 Change Revenue and income 2,791.0 3,071.0 280.0 Statutory profit after tax 4.4 73.8 69.4 Add back
Slide 15: Cash Flow Summary
CASH FLOW SUMMARY Highest cash generated from operating activities since FY08 Cash Flow Statement ($m) 1H18 1H19 Change Cash generated from operating activities 270.6 276.4 5.8 1 Transformation and net finance costs (79.2) (82.7) (3.5) Net cash from operating activities 191.4 193.7 2.3 Net cash used
Slide 16: Balance Sheet Summary
BALANCE SHEET SUMMARY Balance Sheet and Liquidity ($m) FY18 1H19 Change Cash and cash equivalents 1,415.5 1,251.5 (164.0) Other current assets 564.0 440.6 (123.4) Property, plant and equipment 3,031.0 3,179.5 148.5 Other non-current assets 1,177.9 1,179.2 1.3 Total assets 6,188.4 6,050.8 (137.6) Cur
Slide 17: Financing Overview
FINANCING OVERVIEW Debt refinance program well progressed DEBT CURRENCY MIX 5-YEAR DEBT MATURITY PROFILE 700 30 Jun 15 31 Dec 18 600 500 20% 400 28% 300 72% 200 80% 100 0 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 AUD Debt USD Debt FY19 FY20 FY20 FY21 FY21 FY22 FY22 FY23 FY23 FY24 Senior Unsecured Bank Syndicate
Slide 18: Virgin Australia Group Operating Fleet
VIRGIN AUSTRALIA GROUP OPERATING FLEET R e f l e c t s o n - g o i n g f l e e t s i mp l i f i c a t i o n i mp r o v e me n t s Group operating fleet1 As at 31 As at 31 Dec 2018 As at 30 As at 30 Dec 2018 June 2018 June 2017 Leased Owned B737-700/800 81 38 43 82 77 E190 - - - - 7 A330 6 6 - 6 6 B7
Slide 19: Disclaimers, Definitions and ASIC Guidance
DISCLAIMERS, DEFINITIONS AND ASIC GUIDANCE Disclaimer The non-IFRS information has not been audited or reviewed by KPMG. This presentation has not been audited or reviewed by KPMG; however, IFRS data has been derived from the Virgin Australia Holdings Limited Interim Financial Report for the half-ye
Slide 20: Disclaimers, Definitions and ASIC Guidance
DISCLAIMERS, DEFINITIONS AND ASIC GUIDANCE Definitions (continued) Underlying Earnings Before Interest, Tax, Depreciation and Amortisation Margin or EBITDA Margin1,2: is a non-statutory measure derived from Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (as defined above) di
Slide 21: Disclaimers, Definitions and ASIC Guidance
DISCLAIMERS, DEFINITIONS AND ASIC GUIDANCE Forward Looking Statements This document contains certain forward looking statements. Forward looking statements can generally be identified by the use of words such as ‘project’, ‘foresee’, ‘plan’, ‘expect’, ‘aim’, ‘potential’, ‘goal’, ‘target’, ‘intend’,
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