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TRANSCRIPT
Information contained in our presentation is intended solely for your personal
reference and is strictly confidential. Such information is subject to change without
notice, its accuracy is not guaranteed and it may not contain all material
information concerning the Company. Neither we nor our advisors make any
representation regarding, and assumes no responsibility or liability for, the
accuracy or completeness of, or any errors or omissions in, any information
contained herein.
In addition, the information contains projections and forward-looking statements
that reflect the Company’s current views with respect to future events and
financial performance. These views are based on current assumptions which are
subject to various risks and which may change over time. No assurance can be
given that future events will occur, that projections will be achieved, or that the
Company’s assumptions are correct. Actual results may differ materially from
those projected.
This presentation is strictly not to be distributed without the explicit consent of
Company’s management under any circumstances.
DISCLAIMER
2
3
1. Growth, Growth, GROWTH!
2. Strong Earnings and Performance
3. Founders Capital Injection - RM1 billion
4. Dividend Policy
5. Value in the Balance Sheet
6. World’s Lowest Cost Airline
7. Ancillary Target of RM60 per pax
8. The Digital Airline
WHY AIRASIA?
• Built Asean Powerhouse.
• All associates performing excellently, not just Malaysia.
[1] Includes two aircraft leased to a 3rd party
Group fleet as at end-2016:
174
A320neo deliveries:
+19
3rd party leases:
+10[1]
Lease retirements:
-3
Group fleet at end-2017:
203
4
A320ceo deliveries:
+3
169 179 176 173 170 157
524 57 84 109 141
614
25
174203
233263
293323
2016 2017 2018 2019 2020 2021
A320ceo A320neo A321neo
[2] AA Msia– 14 (including for replacement of older acft), AA Thailand - 5
ESTIMATED AIRASIA GROUP FLEET IN
THE NEXT 5 YEARS
2017 NET AIRCRAFT ADDITION
STRONG LOAD FACTOR TREND TO
CONTINUE
1. GROWTH, GROWTH , GROWTHTo Cater to the Underserved Market – ASEAN +2
90 89
82
928890
8386 88 87
AAB AAT IAA AAP AAI
1Q17 2Q17
+5ppts
YoY+3ppts
YoY+2ppts
YoYFlat
YoY
-3ppts
YoY
+5ppts
YoY+3ppts
YoY+2ppts
YoY
Flat
YoY
+1ppts
YoY
[1][2]
29Aircraft for
growth
• Malaysia – 7• Thailand – 6• Indonesia – 2• Philippines – 5• India – 6• Japan – 3
WHAT WORRIES THE MARKET?COMPETITION.
World’s lowest-cost airline. Lowest CASK in the industry allows AirAsia to focus on generating revenue, regardless of the yield trend.
Ancillary income machine. Additional stream of income other competitors don’t have and can’t scale up as quickly.
Long track record of profitability. Able to turn a profit in lean times and when oil was over US$100/barrel.
Unbeatable frequencies.
Route thickness is a barrier to entry and gives AirAsia the privilege as the price setter.
Low expansion cost. Operating to over 125 destinations in Asia. Able to start new routes fast with low set-up costs.
Strong brand in all home markets. Built up a strong brand over the years, a key to success that other LCCs neglect.
First mover advantage. The first LCC to new markets in ASEAN and operating 66 unique city pairs system-wide, more than any other competitor in the region.
ASEAN advantage. Operate as one airline with a network spread over 18 hubs across a potential market of 625 million people.
Only Malaysian LCC. Malindo has upgraded to a full-service carrier leaving the LCC space in Malaysia wide open for AirAsia.
Profitable and competitive. Profitable in Indonesia despite small market share. Lower CASK in India than the “giant” Indigo despite a small fleet.
Digital Airline. Investing heavily in digitalisation and the future of aviation and travel – ahead of the rest!
5
2. STRONG EARNINGS & PERFORMANCESAirAsia Group Recorded Profit Before Tax RM2.13 Billion in FY2016
• Group Passengers Carried: 56.59 million (+12%)
• Group Load Factor: 86% (+6 ppts)
• Group Revenue: RM12.02 billion (+11%)
• Group Operating Profit: RM2.15 billion (+24%)
• Group Net Operating Profit: RM1.65 billion (+58%)
• Group Profit Before Tax: RM2.13 billion (12.1x)
• Group Cash Position: RM2.97 billion
• Group Net Gearing: 1.30x
6Refer to appendix for segment breakdown
AIRASIA GROUP: FULL YEAR 2016 PRO-FORMA CONSOLIDATED RESULTS
14.81
15.71
12.65
11.70
10.50
11.50
12.50
13.50
14.50
15.50
16.50
4Q15 4Q16
sen/A
SK RASK UP 6%
- Strong demand for air travel
- Load factor up by 2 ppts to 87%
- Higher average fare of RM186 (+5%)
CASK DOWN 8%
- Decrease in average fuel price of
20% to US$59/barrel jet kerosene
- Fuel consumption flat despite 2%
capacity increase
AirAsia Malaysia FY2016
• Passengers Carried: 26.41 million (+9%)
• Load Factor: 87% (+6 ppts)
• Revenue: RM6.92 billion (+10%)
• Operating Profit: RM2.05 billion (+29%)
• Net Operating Profit: RM1.67 billion(+63%)
• Profit After Tax: RM2.03 billion(+276%)
AIRASIA MALAYSIA: 4Q16 & FY2016 PERFORMANCE
2. STRONG EARNINGS & PERFORMANCESAirAsia Malaysia Recorded Profit After Tax RM2.03 Billion in FY2016
7
AIRASIA’S GROWING FOOTPRINT OVER THE LAST 15 YEARS
2001 2010 2013 2016
COUNTRIES 1DESTINATIONS 5ROUTES 5ASK (in Mil) 586
COUNTRIES 18DESTINATIONS 65ROUTES 145ASK (in Mil) 37,935
COUNTRIES 17DESTINATIONS 83ROUTES 182ASK (in Mil) 52,710
COUNTRIES 23DESTINATIONS 125ROUTES 255ASK (in Mil) 103,080
We expanded our footprint extensively into key markets whilst keeping an eye on underserved routes with high yields, enabling us to grow to 23 countries, 125 destinations and 255 routes in just 15 years.
AIRASIA’S FOOTPRINT GROWTH OVER 15 YEARS
Countries +22 + 23% CAGR
Destinations +120 + 24% CAGR
Routes +250 + 30% CAGR
ASK (in Mil) +102,494 + 45% CAGR
IN 9 YEARS IN 3 YEARS IN 3 YEARS
Source: Annual Report, Quarterly Reports and Internal data. 8
2. STRONG EARNINGS & PERFORMANCES
Confidence
• RM1bil injection shows founders confidence and commitment towards AirAsia
growth and expansion.
Increased Shareholdings
• Combined shareholding of 32.3%
Net Gearing
• 4Q2016 - 1.30x down to 1Q2017 – 1.0x (est.)
Continuity of policy since 2013
• Committed to pay dividend up to 20% of the net operating profit p.a.
Dividend payments
• FY2015 - RM0.04 (2.20%) paid on 29 June 2016
• FY2014 - RM0.03 (1.20%) paid on 2 July 2015
• FY2013 - RM0.04 (1.40%) paid on 3 July 2014
9
3. FOUNDERS’ CAPITAL INJECTION
4. DIVIDEND STOCK
INVESTMENTS WORTH RM5.8 BILLION
Monetisation
• Realising approximately
USD900 - USD1.2 billion
from Asia Aviation Capital
• IPO for training centre,
AACE
• Potential full disposal of
AirAsia Expedia (AAE
Travel)
• Ground Team Red (GTR):
Set up ground handling
teams in Indo-China and
China
Asia Aviation Capital -
Updates
• Deadline for final bidding
submission 27 Mar 2017
(indicative)
• SPA & SSA execution to
start 7 April 2017
(indicative)
Note: Refer to appendix for private equity performance FY201610
5. VALUE IN THE BALANCE SHEET
Value of Unwinding Hedges
• If we unwind all hedges, we could
have a net gain of MYR 936 million:
1. FX hedges
• Total gains approx MYR923mil
2. Fuel hedges
• Total gains approx MYR184mil
3. IRS hedges
• Out of the money. Total loss is
MYR 171mil
• However, much smaller than
gains from FX and Fuel hedges
Source: Bloomberg
AirAsia figures based on full year 2016 results, USD/MYR = 4.14 (full year average)
Jetstar’s CASK breakdown unavailable
CASK (US¢) based on latest available results
11
2.26 2.29 2.21 2.77 3.00 3.41 3.023.82 3.73 3.54
4.52 4.02
5.90 5.750.84 1.07 1.421.36
1.50 1.24 1.671.09 1.38 1.68
1.19 1.79
1.25 1.54
3.11 3.36 3.634.13
4.50 4.64 4.68 4.91 5.02 5.11 5.215.71 5.80
7.15 7.29
Air
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CASK ex fuel CASK Fuel
6. WORLD’S LOWEST COST AIRLINE
THE POWER OF ONEDRIVE GROWTH & REDUCE COST FURTHER
• ASEAN Holding Co to be listed
• Branding by sending consistent messaging across the Group
• Culture cultivated by more internal marketing: One Voice, One Vision, One with our People
• Centralisation of functions and processes to extract group synergy, leverage scale & reduce cost
• Regionalisation of more departments at Group
• Standardisation and Streamlining SOPs, Standardise Document Control Management System and Station
Audit Checklists across the Group, implementing best practices across stations, One Pricing for inflight meals
Total Cost Saving Initiatives ~ USD23m annuallyShared Service
Savings of ~US$3m annually
AGSS & Treasury
AGSS (savings of US$2m)
• Automation
–Improve system & workflow
• Centralize Payment release–
payment below RM 1.5 M approve
by AGSS, strengthen and
empowered AGSS
Treasury - Cash Pooling (savings of
US$1m)
• Cash & Liquidity Optimization
• Cash centralization
• Optimize Returns
RegionalisationSavings of ~US$5m annually
Control Center + Localised Coordination
• Legal
• CFO
• Procurement
• People Department
• Internal Audit
• Corp Finance
• ICT
• Network Planning
• Engineering
• Customer Care
Best practices sharing
Share resources
Eliminate duplication work
Consolidation
• CapEx Group purchase, ICT, GSE,
Inflight
• Consolidate media purchase –
Commercial
• Group sourcing Lowest costs
through scale benefits – Inflight,
crew, GS
Procurement Savings of ~US$15m annually
12
Baggage45.1%
Cargo9.6%
F&B6.9%
Assigned seat6.1%
Connecting fees5.7%
Insurance5.6%
Duty free & merchandise
1.6%
Others19.4%
7. ANCILLARY RM50 per pax; Onward to RM60
Ancillary
Revenueper pax
FY2016 – AirAsia Malaysia
• Total ancillary revenue increased +10.4%
• ancillary income per pax +1.4%; RM47.02 to RM47.68
(approx. revenue RM118.9mil)
• Biggest contributors:
• Baggage up 16% (contributes 45% of total ancillary
revenue) and
• Cargo (9.6% of total ancillary revenue)
• Highest growth:
• Assigned seat (+13.6%), Flythru (+34%)
• Inflight merchandise (+82.7%), Inflight Duty Free
(+116%) and Aircraft Advertising (+191%)
• Core ancillary – FY2016 vs FY2015 achievements:
F&B
• Revenue +10%. Introduced Santan combo meals for RM10.
• Bought over T&CO (Barista in the sky for LCC).
Baggage
• Revenue +16% (RM24.4mil)
Fly-thru
• Connecting fee +34%. AA Grp recorded 2.2mil FlyThru traffic for FY2016 (+36% vs FY2015).
• AAB FY16 connecting fees +RM0.78 per pax from RM1.95 to RM2.73 (+40%) revenue of RM72.1m vs RM47.3m
• Top 3 Routes: S’pore–Tiruchirappalli (+19%), Incheon–S’pore (+88%), Jeddah–Surabaya (pilgrimage route) (+72%)
13
7. ANCILLARY TARGET – RM60 PER PAX
Separate branding and
drive pre-book
Enable ROKKI at all
AOCs
Maximize take up
rate
Enforcement and demand
based pricing to optimize
revenue
Focus on dynamic pricing,
product innovation and
bundling
Product innovation and
demand based pricing to
optimize revenue
To increase number of
users and online
conversion via one-click
payment solution
Centralization, rationalize
catalogue and drive
ecommerce conversion
14
Priority By Category
Enforcement
Seamless user experience
Maximize touch points
Revenue management
Technology & Data
Awareness & product education
Ancillary Revenue Growth 2017
Strategies
Cabin baggage and checked baggage
Self-service kiosks, simplified booking, BIG Pay for one click payment solution
Cabin crew as sales agents, kiosk, MMB for anonymous booking
Demand based pricing for seats and baggage
EPOS, Big data for personalized marketing
Initiatives
Set product value proposition, drive pre-book & standardise branding
Timelines
On-going
Q2 2017 onwards
Q3 2017
On-going
On-going
Q2 onwards
15
7. ANCILLARY – KEY STRATEGIES
Buying
Perfumes & Cosmetics
Watches
Liquor
Jewellery & Gifts
Strategic Focus
Buy Direct from Brand Principals
Margin Optimization
Increase Product Range by Customers Profiling
Introducing Major Brands In All Categories
Health & Gadgets
Cigarettes
CATEGORIES
New catalogue differentiator
Desirable but non-mainstream counter brands
16
Duty Free Buying Strategy
7. ANCILLARY – KEY STRATEGIES
Think of our plane as a thing, a big part of our information network.
Building a platform so all data
related to aircraft is in one place.
Guests Operations Maintenance Cabin• experience
• interests
• profiling
• Experience
• Communication
• Fuel management
• Crewing
• Ground & Flight Ops
Info
• AIMS
• aircraft servicing
• Response
management
• in-flight sales
• time
management
8. THE INTERNET WAY OF AIRASIA
17
8. THE DIGITAL AIRLINE
Improve performance Reduce Costs
Create Innovative ServicesNew Revenue Stream
• BigPay’s e-Wallet – cashless/ hassle free travel
• Mobile facilitates seamless travel
• Platform for future development of e-commerce
travel
• Big Duty Free
• BigPay - Fx wallet with 5 foreign currencies (USD,
GBP, SGD, EUR, AUD)
• Reduction of distribution cost/ channels by direct
customer acquisition
• Increase share of sales through mobile device
• Paperless travel
• Increase productivity with automation
• Offer personalised services to customer’s travel
needs at no additional cost
• Increase conversion by 2ppt equals to approx.
RM2bil in sales (FY2016 5%)
• Increase ancillary sales through target marketing
18
0.03 1 25 7
1215
1924
2832
37
4650
5457
2 3 717
2742
6578 84
101 108127
169
196 201 204
-50
0
50
100
150
200
10.00
20.00
30.00
40.00
50.00
60.00
70.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F
Passengers Flown (in mil)
No. of Aircraft
21
AIRASIA’S GROWTH STORY
FROM MALAYSIA TO ASEAN TO ASIA
All figures refer to AAB, AAT, IAA, AAP, AAI, AAX1 As of end-2016 AAB, AAT, IAA, AAP, AAI, AAX
225 202143
108 84 78 75 60 47 46 35 30 23
Lion Air AirAsia Group GarudaIndonesia
SingaporeAirlines
VietnamAirlines
MalaysiaAirlines
Thai Airways PhilippineAirlines
Cebu Pacific Citilink VietJet Air Nok Air Tigerair
LARGEST LCC IN ASIA BY PASSENGERS
((million))
Source: Airlines’ Financials and CAPA
AirAsia fleet notes: Includes AAX, excludes two aircraft leased to PIA and two aircraft delivered to AirAsia Japan but yet to commence operations
SECOND LARGEST AIRCRAFT FLEET IN ASEAN
22
51 ATR turboprops
114.6 101.7 96.6
61.3 47.4 41.1 40.7 35.0 34.3 31.2
19.1 18.2 14.7 13.5 5.1
ChinaSouthern
ChinaEastern
Air ChinaAirAsiaGroup
All NipponAirways
IndigoJapanAirlines
GarudaIndonesia
CathayPacific
SingaporeAirlines
CebuPacific
THAIChinaAirlines
PhilippineAirlines
Tigerair
*includes AirAsia X
FROM ASEAN TO ASIAAssociate Structure
AirAsia INDIA (Associate Co - 49% owned)
• Population base: 1.3b
• Years in Operation : 2
MALAYSIA AirAsia• Population base: 32m
• Years in Operation: 15
• Listed on Bursa Malaysia (AirAsia Bhd)
THAI AirAsia (Associate Co - 45% owned)• Population base: 68m
• Years in Operation: 12
• Listed on SET under Asia Aviation PCL
INDONESIA AirAsia (Associate Co - 49% owned)• Population base: 261m
• Years in Operation : 12
PHILIPPINES AirAsia (Associate Co - 40% owned)
• Population base: 102m
• Years in Operation : 4
AirAsia JAPAN (Associate Co - 49% owned)
• Population base: 126m
• Years in Operation : To start in 2017
Note: AirAsia Berhad owns 13% of AirAsia X Berhad (long-haul operations) which is listed on
Bursa Malaysia 23
Single ClassOne Class Configuration
Same specification on all aircraft
Point to Point Point to point routes
Single Aircraft
Type
All Airbus A320 (AirAsia)
Single pool of professionals training, spare parts inventory,
tools
Modern & Efficient
Fleet with Good
Maintenance
Young fleet with average age of 5 yrs
Sharklets (4% more fuel efficient) A320neo (15%)
Long term engine programme with GE
Operational
Excellence25 minutes turnaround time (AirAsia)
Interest
Rate Low interest rate on all aircraft financing
PeopleNo Unions
High productivity and deep management
High Aircraft
Utilisation12.5 hours a day (AirAsia)
Low Distribution Cost 70% sales via internet
Favorable termsDiscount on aircraft and engine purchase
Tax incentives on purchase of aircraft
Economies of scale Cost Savings among AOC when operating same destination
Simplified Model No dedicated cargo fleet, catering, MRO, etc.
THE AIRASIA BUSINESS MODEL
24
Network• 125 destinations
• 27 countries
• 258 routes
• 60 unique routes
• 28 new routes
introduced in 2016
• 5 new routes
introduced so far in
2017
Allstars• 16,067k
Allstars
comprising
44
nationalities
Key Milestones• Voted The World’s Best Low-
Cost Airline for the eighth
consecutive year (Skytrax
World Airline Awards 2016)
• Voted Asia’s Leading Cabin
Crew (World Travel Awards)
• Largest LCC in Asia – 57 million
guests carried in 2016
174 Airbus A320’s
AirAsia Malaysia– 77 (+2 leased to PIA)
AirAsia Thailand - 51
AirAsia Indonesia – 22 (+5 A320 under IAAX)
AirAsia Philippines - 14
AirAsia India - 8
AirAsia Japan- 2
21 hubs
5 : KUL, JHB, BKI, KCH, PEN
6 : DMK, HKT, CNX, KBV, UTP, HDY
4 : CGK, SUB, KNO, DPS
3 : MNL, CEB, KLO
2 : BLR, DEL
1 : NGO
25
4Q16 load factor
87%
82%
83%
85%
86%
Market ShareDOM INT
Malaysia 48% 45%
Thailand 29% 14%
Indonesia 3% 24%
Philippines 13% 5%
India 2% 3%
-
Aircraft as of 28h Feb ’17. Network as of Dec ’16. Allstars as of Dec’ 16. Market share as of Dec’ 2016.
AIRASIA – FACTS AT A GLANCE
UNDERSERVED MARKETFOR ASEAN, INDIA, CHINA & THE REST OF ASIA
Source: World Bank, IEMS, Kharas and Gertz, 2010
North America
pop. 357 mil.
2.5 flights per capita
European Union
pop. 509 mil.
1.3 flights per capitaASEAN +2
pop. 3.3 billion
0.3 flights per capita
2009 2020 2030
Rest of World
North America & Europe
Asia-Pacific
Expanding global middle class
28% 54% 66%
26
Note: All provided figures based on latest reported quarter of4QCY16, unless otherwise stated.1 Malaysia Airlines figures based on the latest available auditedfinancial statement as at 31 December 20132 Nok Air figures based on latest reported financials for FY20163 Garuda Indonesia figures based on latest reported financials for9M16
COST ADVANTAGE OVER PEERSAirAsia
Malaysia
Malaysia
Airlines1 Ryanair AirAsia
ThailandNok Air2
Staff costs 0.66 0.97 0.44 0.67 0.86
Depreciation 0.28 0.36 0.36 0.17 0.04
Aircraft fuel expenses 0.93 2.44 1.29 1.14 1.24
Aircraft operating lease expense 0.05 0.48 0.06 0.66 1.63
Maintenance and overhaul 0.16 0.84 0.11 0.37 1.74
User charges and related expenses 0.54 0.56 1.06 0.71 0.71
Other operating expenses 0.18 0.55 0.22 0.26 0.84
Finance costs 0.20 0.18 0.04 0.07 0.05
Finance income (0.12) (0.05) 0.00 (0.02) (0.02)
Other income (0.21) (0.24) (0.00) (0.03) (0.29)
ASK (million) 10,275 14,983 37,236 5,208 1,566
CASK (US cents) 2.67 6.09 3.59 4.00 6.82
AirAsia
Indonesia
Garuda
Indonesia3AirAsia
Philippines
Cebu
Pacific
AirAsia
IndiaIndiGo
Staff costs 0.43 0.24 0.69 0.37 0.70 0.54
Depreciation 0.06 0.11 0.08 0.50 0.02 0.12
Aircraft fuel expenses 1.06 1.84 1.28 1.61 1.06 1.72
Aircraft operating lease expense 0.60 1.50 0.63 0.33 0.35 0.84
Maintenance and overhaul 0.47 0.63 0.88 0.47 0.32 0.15
User charges and related expenses 0.63 1.04 0.47 0.53 0.59 0.52
Other operating expenses 0.19 0.97 0.48 0.12 0.23 0.69
Finance costs 0.09 0.12 0.08 0.09 0.14 0.08
Finance income - (0.01) 0.00 -0.01 -0.07 -
Other income (0.08) (0.07) 0.56 0.00 -0.08 (0.18)
ASK (million) 2,661 14,638 1,473 6,399 990 14,390
CASK (US cents) 3.45 6.37 5.15 4.02 3.26 4.48
Cost reduction initiatives
- New A320neo & A321neo
• Added 5 A320neo in 2016 and a further 17 planned for 2017
• A321neo to be introduced in 2019
• 15% - 20% fuel burn reduction
- Fuel saving
• One engine taxi
• Required Navigation Performance
• Engine wash & tyre pressure check
- Innovation
• Self Bag drop & e-boarding pass
• Enhanced mobile and web booking
• Digitalisation and One AirAsia
- Others
• Renegotiating lower airport charges
AirAsia X Berhad Tune Protect Group Berhad
• Est Valuation: RM 234m (Our Stake 13.76%)
• FY2016 vs FY2015Rev: RM4.0b (+31%)Net Op Profit: RM250.9m (vs net op. loss - RM101.7mil)PAT: RM230.5m vs LAT -RM349.6m
• Est Valuation: RM 149m(Our Stake: 13.65%)
• FY2016 vs FY2015: Rev: RM126.08mPAT: RM15.34m
roKKi.com
• Est Valuation: RM 29m(Our Stake: 73%)
• FY2016 vs FY2015: Rev RM22m (-18%)PAT RM2.6m (+392.5%)Margins: EBIT = 12.8%, EBITDAR = 12.8%
BIG Loyalty
• Est Valuation: RM 292m(Our stake: 69.33%)
• FY2016 vs FY2015: Rev RM50.4m (+37%)LAT –RM10.3m (vs -RM15.5m)
• Active members increased to 5.5m from 31.m.
Asian Aviation Centre of Excellence
• Est Valuation: RM 355m(Our Stake 50%)
• FY2016 vs FY2015: Rev RM130.7m (+21%)EBITDA RM78.9m (+22%)PAT RM48.6m (+46% against budget)Margins: EBIT 44%, EBITDA 60%10 Full Flight Simulators (FFS)
AirAsia Expedia
• Est Valuation: RM 354m(Our Stake 25%)
• FY2016 vs FY2015 Rev USD208.9m (+30%)PAT USD27.8m (+35%)Margins: EBIT 13.9% EBITDAR 14.2%
T & Co.
• Est Valuation: RM 914k (Our stake: 80%)
• FY2016 vs FY2015:Rev RM3.1m (+12%)
INVESTMENTS WORTH RM5.8 BILLION
Asia Aviation Capital
• Est Valuation: RM 4.5 bil• (Our Stake 100%)• FY2016 vs FY2015:
Revenue: US223.96m ( +140%)EBITDAR: USD57.2mPAT: USD70.9m (+515%)Normalised Profit Margin for
4Q2016: EBIT 27% Total acft:63
28
PRIVATE EQUITY PERFORMANCE FY2016
2017 FLEET STATISTICS
[1] Includes aircraft operating under IAAX flight code
Owned Op. Lease Owned Op. Lease Owned Op. Lease
Malaysia 2 2 71 2 - - 7
Thailand 12 16 2 - 16 5 6
Indonesia1 9 7 - - 5 1 2
Philippines 2 6 2 - - 4 3
India 2 1 5 - - - 6
Japan - 2 - - - - 3
Pakisan 2 - - - - - -
TOTAL 29 34 80 2 21 10 27
Net
growth in
2017
OperatorAAC MAA TAA / IAA / PAA
29
5
29
DURABLE COMPETITIVE ADVANTAGECURRENCY, HEDGING & COST
USD borrowings Associates' a/c,natural hedged
MAA a/cunhedged
MAA a/c hedged
Only 35% of
USD
borrowings
is totally
unhedged:
35%
50%
• Loans by currency: USD (90%), MYR (7%), SGD (2%) and EUR (1%)
15%
Bought planes at low cost. Negotiated best prices for
aircraft by ordering early and ordering big.
Fixed interest rates. All loans are either fixed rate
loans or have fixed interest rates via interest rate
swaps.
Most of fuel for 2017 is fixed. Hedged 75% of FY2017 fuel requirements at
USD59 per barrel.
Currency hedges. USD operating expenditure 50% hedged up to May 2017.
Able to pass on currency risk to passengers via increasing average fare.
30
OUR PERFORMING ASEAN AIRLINES FULL YEAR 2016 RESULTS
Malaysia Thailand Indonesia Philippines
+10% +10%+18%
Malaysia Thailand Indonesia Philippines
REVENUE
RM6.92
bilTHB32.5
bil
IDR3,854
bilPHP10.8
bil
Malaysia Thailand Indonesia Philippines
OPERATING
PROFIT +29%+35%
+125%Reduced
operating loss to 188%1
RM2.05
bil
THB3.8
bilIDR190
bil
-PHP0.9 bil2
planned capacity
reduction
1 Reported2 Less one-off charges
31
4Q2016 SEGMENT PERFORMANCEAIRASIA GROUP: PRO-FORMA CONSOLIDATED RESULTS
-23%
Elimination
Malaysia Thailand Indonesia Philippines India Japan Adjustments Total
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Segment results
Revenue 1,936,769 933,122 318,813 276,280 174,412 - (401,048) 3,238,348
Operating expenses - - - - - - -
- Staff costs (314,032) (152,818) (50,148) (44,595) (30,460) (17,567) - (609,619)
- Depreciation of property, plant and equipment (192,431) (38,085) (7,359) (5,207) (985) 634 - (243,432)
- Aircraft fuel expenses (420,484) (261,671) (83,832) (82,922) (69,128) (1,622) - (919,659)
- Maintenance and overhaul (72,369) (85,754) (48,104) (56,850) (18,926) (1,775) 126,489 (157,290)
- User charges and other related expenses (245,473) (161,704) (63,949) (30,263) (24,669) (4,504) - (530,562)
- Aircraft operating lease expenses (135,519) (151,463) (47,165) (40,563) (29,689) (8,264) 271,798 (140,865)
- Other operating expenses (109,570) (60,110) (22,175) (30,675) (10,885) (5,622) 18,500 (220,538)
Other income 143,549 6,857 33,642 (36,442) 3,706 59 (15,739) 135,633
Operating profit/(loss) 590,440 28,375 29,723 (51,236) (6,625) (38,661) 0 552,016
Finance income 80,940 3,693 399 14 919 0 - 85,964
Finance costs (126,792) (16,473) (11,257) (4,886) (111) (16) - (159,535)
Net operating profit/(loss) 544,588 15,594 18,866 (56,108) (5,817) (38,677) 0 478,446
Foreign exchange (losses)/gains 54,120 (17,857) (95,285) (68,981) (4,063) (4,117) - (136,184)
Impairment of investment in associate (163,750) - - - - - - (163,750)
Share of results of joint ventures 6,108 - - - - - - 6,108
Share of results of associates (91,870) - - - - - 103,985 12,115
Profit/(loss) before taxation 349,196 (2,263) (76,420) (125,089) (9,881) (42,794) 103,985 196,735
32
AIRASIA BERHAD: 4Q16 and FY2016 PERFORMANCEAIRASIA MALAYSIA: INCOME STATEMENT AND PERFORMANCE INDICATORS
4Q15 4Q16
MRF adj. +0.12+0.11 1.94
REVENUE(RM billion)
Passenger
seat sales
Other
revenue
Topline revenue declined year-on-year due to recognition of one-off Maintenance
Reserve Fund (MRF) adjustment in 4Q15 of RM457 million. Leaving out the one-off gain,
revenue increased by 15%.
NET OPERATING
PROFIT (RM million)
EBITDAR
MARGIN
EBIT
MARGINLOAD
FACTORAVERAGE
FARE
47% 30%
4Q16
87%(+2 ppts)
544.6
724.5RM186
(+5%)
Total passengers carried at 6.76 mil for 4Q16, up 5%, exceeding capacity growth of 2%
year-on-year.
Net Operating Profit down 25% by due to payout of staff bonuses and wet-lease
charges
Ancillary income per passenger of RM47.
4Q16
1.71
0.46
4Q15 4Q16
-25%
33
157
90
4Q15 4Q16
Operating Profit
1,091971
4Q15 4Q16
Revenue
34
4Q16 – ASSOCIATES’ PERFORMANCE
AIRASIA THAILAND (THB MIL)
7,678 7,559
4Q15 4Q16
Revenue
585
229
4Q15 4Q16
Operating profit
-2%
-61%
Revenue held steady at THB7.56
bil. Lower operating profit from
tour operator crackdown and
national mourning period
AIRASIA INDONESIA (IDR BIL)
-11%
-43%
Revenue 11% lower due to planned
capacity reduction as part of the
turnaround plan
Load factor up 3 ppts to 83%.
CASK down by 25%
Second consecutive profitable
quarter with operating profit of
IDR90.6 million
-110
-576
Operating loss
35
AIRASIA INDIA (INR MIL)
2,077
2,695
4Q15 4Q16
Revenue
-256
-102
4Q15 4Q16
Operating loss
+30%
Reduced op. loss by 60%
Revenue up 30% from 56%increase in pax.
CASK down 10%
2,285
3,106
4Q15 4Q16
Revenue
+36%
-421%
Revenue up 36% on 19% higher
passenger volume and 17%
increase in average fare
RASK up 5% and CASK down 18%
Smaller operating loss after
excluding the one-off charge of
PHP493.7 million from the
disposal of last remaining legacy
aircraft
AIRASIA PHILIPPINES (PHP MIL)