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2Q Earnings Results Presentation
The present document consolidates information from Avianca Holdings S.A. and its subsidiaries, including unaudited financial figures, operationalmanagerial indicators, financial indicators and managerial projections of future performance, in line with Avianca Holdings S.A. and its subsidiaries’business plans. References to future behaviors are indicative and do not constitute a guarantee of compliance by the Company, its shareholders ordirectors. Unaudited accounting and financial information and projections presented in this document are based on internal data and calculationsmade by the Company, which may be subject to changes or adjustments. Any change in the current economic conditions, the aviation industry, fuelprices, international markets and external events, among others, may affect the ongoing business results and future projections.
Avianca Holdings S.A. herein after Avianca Holdings and its subsidiaries warn investors and potential investors that future projections are not aguarantee of performance and that actual results may differ materially. Every investor or potential investor will be responsible for investment decisionstaken or not taken as a result of his or her assessment of the information contained herein. Avianca Holdings S.A. is not responsible for any thirdparties’ content. Avianca Holdings may make changes and updates to the information contained herein.
The information, tables and logos contained in this presentation may not be reproduced without the consent of Avianca Holdings S.A.
SAFE HARBOR
Executive Summary
2Q 2017
Source: Company Information1. When indicated the figures exclude the following one-time items: $0.620M: extraordinary projects; 2Q2016 figures exclude one-time expenses disclosed on previous earnings releases and cargo discount.
AVH Network
AvBrasil Network
• Skytrax Awards: Best LatamAirline and best LatamRegional Airline
• Airbus: Operational Excellence Award in America
• Routes:- Bogotá – Montevideo- Bogotá – Boston- San José – México D.F.
• First YoY yield increase since 1Q14
• 2Q17 yields increased 3.18%, to 8.5 cents
• 5.7% Adjusted EBIT1 Margin for 2Q17 +168 bp vs 2Q16
• Strongest 2Q EBIT since 2013• US$8.8 Million of Net Income
• US$1.09 Billion total revenues in 2Q17
• Strongest 2Q revenue result since 2014
• Load Factor (LF) of 82%; +390bps vs. 2Q16
• The highest 2Q LF since 2012• LF above 82% since 3Q16
• PAX +9% YoYincrease during 2Q17
• The RPK growth of 14.5% significantly outpaces capacity growth (ASK) of 9% in 2Q17
H I G H L I G H T S
GUIDANCE UPDATE
O P E R AT I O N A L
F I N A N C I A L
• Transported 12,652 tons of Mother’s Day flowers; +6% vs. 2016
• PAX: from 4%-6% to4.5% – 6.5%
• ASK: from 6.5%-8.5% to 7% – 9%
• EBIT %, from 6.0% – 8.0% to 7% – 9%
FINANCIAL AND OPERATIONAL
RESULTS2Q 2017
6
We executed on our fleet plan
Source: Company Information1 The Airbus A320 Family is comprised of: 10 A318 18 A319, 49 A320, 2 A321, 8 A319S, 12 A320S and 9 A321S2 A320 Family Seating Capacity: A318: 100pax, A319: 120pax, A320: 150pax, A321: 194pax.
100/194 pax2
68 pax
12 pax
250 pax
96 Pax
252 pax
68 tons
40 tons
48 pax
53 tons
Aircraft mar-17 In Out jun-17Airbus A320 Family1 110 - 1 109
ATR – 72 15 - - 15Cessna 208 13 - - 13Boeing 787 11 - - 11
Embraer E190 8 - - 8
Airbus A330 9 - - 9
Airbus A330F 5 - - 5
Airbus A300F 6 - 1 5
ATR – 42 2 - - 2Boeing 767F 2 - - 2
Total 181 0 -2 179
OUT Airbus A319 out of fleet: end of
operating lease
OUT Airbus A300F inactive: Tampa sold the
aircraft to Aerounión.
2Q17 Operating Fleet Status Fleet Status & Capacity
Detail
Source: Company InformationBp: Basics points
9.8
8.2 8.5
2Q14 2Q15 2Q16 2Q17
8.47
8.55
6M16 6M17
2Q ASKs – Millions 2Q RPKs – Millions
2Q Yield - US¢ 2Q Load Factor
7
First year on year yield increase since 2014, +318 bpreaching 8.5 US cents
ASK Quarterly
ASK Annual
+7.5%
RPK Quarterly
RPK Annual
Yield Quarterly
Yield Annual
Load Factor Quarterly
Load Factor Annual
7,756 8,488
9,037
10,346
2Q14 2Q15 2Q16 2Q17
18,098
20,317
6M16 6M17
+12.3%
+98 bp+318 bp
78.2% 78.7%78.1%
82.0%
2Q14 2Q15 2Q16 2Q17
78.4%
81.9%
6M16 6M17
+350 bp
+390 bp
+14.5%+9.0%
9,922 10,780
11,575 12,621
2Q14 2Q15 2Q16 2Q17
23,079
24,801
6M16 6M17
12.0
2Q Revenues1 – US millions 2Q CASK1 ex Fuel - US¢
2Q EBITDAR1 – US millions 2Q EBIT1 – US millions
8
Improved operational performance result in strongest second quarter EBIT margin since 2012
Source: Company Information1. When indicated the figures exclude the following one-time items: $0.620M: extraordinary projects; 2Q2016 figures exclude one-time expenses disclosed on previous earnings releases and cargo discount.2. Q: Quarterly3. A: Annual
CASK
EBITDAR Margin
EBITDAR
EBIT Margin
EBIT
CASK Ex-fuel
Passenger RASK US¢Non-passanger Revenues
1,092
9381,036
1,1441,915 2,160
109.9
133.1
5.7%
6.2%
6M16 6M17
164.3
140.0
178.4
211.914.4%
13.5%
19.0% 19.4%
-
50.000
100.000
150.000
200.000
250.000
2Q14 2Q15 2Q16 2Q17
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
393.3
430.0
20.5% 19.9%
320.00
340.00
360.00
380.00
400.00
420.00
440.00
6M16 6M17
15.0%
16.0%
17.0%
18.0%
19.0%
20.0%
21.0%
932 829
741
875
212 208
197
217
2Q14 2Q15 2Q16 2Q17
1,533 1,737
382 422
6M16 6M17
11.0
9.6
7.8 8.2 7.7
7.0 6.1 6.3
-
2.0
4.0
6.0
8.0
10.0
12.0
2Q14 2Q15 2Q16 2Q17
-
2.0
4.0
6.0
8.0
10.0
12.0
7.8 8.2
6.3 6.3
6M16 6M17
50
5
38
62 4.4%
0.5%
4.0%
5.7%
-
10
20
30
40
50
60
70
11.5
9.6
8.1 8.6 8.3
8.7
*Domestic Market: Colombia, Peru, Ecuador 1 Local Intra-Markets: Colombia, Peru, Ecuador, Salvador, Costa Rica, Guatemala; 2 From Local Markets to North América including México 3 From Colombia, Perú, Ecuador and Costa Rica to Bolivia, Chile, Argentina, Brazil ,Uruguay and Venezuela, 4 Belize, Cuba Curazao, Republica Dominicana, Panamá, Costa Rica, Guatemala, Honduras, Nicaragua
Avianca reports the strongest 2Q Load Factor in company history of 82%, +390bp vs 2Q16
2Q17
ASK Growth
2Q17
Insights
-1.8%
2Q17
RPK Growth
2Q17
Load Factor
22.7%
80.8%
75.5%
83.8%
81.9%
78.1%
85.5%
4.0%
14.3%
14.5%
17.1%
20.3%
Home Markets to
Europe
5.1%
9.4%
16.3%
5.4%
19.1%
Intra Home Markets1
HM to North America2
Central America &
Caribbean4
HM to South America3
Domestic*
Region
Strong capacity expansion outpaced
by traffic growth
Robust position thanks to strong
network and frequencies
Strong competitive position in
strategic markets drives demand
growth
Increase of frequencies and a new
destination (BOS) with traffic and
yield growth
Strong demand growth, support
capacity increases combined with
economic recovery
Broad traffic growth with yield
improvement driven by economic
recovery
TotalRPK Growth
14.5%
Load Factor
82%
ASK Growth
9.0%
*Domestic Market: Colombia, Peru, Ecuador 1 Local Intra-Markets: Colombia, Peru, Ecuador, Salvador, Costa Rica, Guatemala; 2 From Local Markets to North América including México 3 From Colombia, Perú, Ecuador and Costa Rica to Bolivia, Chile, Argentina, Brazil ,Uruguay and Venezuela, 4 Belize, Cuba Curazao, Republica Dominicana, Panamá, Costa Rica, Guatemala, Honduras, Nicaragua
Source: Aeronáutica Civil, MIDT
1
INTRA-HOME MARKETS
1 69%
HOME MARKETSTO NORTH AMERICA
124%
HOME MARKETSTO SOUTH AMERICA
136%
HOME MARKETSTO SPAIN
228.5%
COLOMBIA DOMESTIC1 PERU DOMESTIC2
1 June 20172 May 2017
3
Avianca continues to consolidate its Leadership Position in the colombian domestic market
59.2%
17.4%
13.2%
4.2%
Others4.0% 1.1%
12.0%
58.5%
14.7%
Others11.4%
3.4%
CARGO & OTHER2Q 2017
Source: Company Information;1 5 Airbus 330F, 5 Airbus 300F and 2 Boeing 767F;2 includes Domestic Colombian and Peru
■ Aircraft maintenance, crew training and other airport
services to other carriers
■ Travel-related services to customers
■ In-flight duty-free sales
■ 12 freight aircraft complemented by passenger fleet bellies
■ Deprisa is a leading express courier operation in Colombia
with a broad domestic and international product portfolio;
UPS allied in Colombia
■ Strong brand recognition and reputation in Colombia
■ One of the largest loyalty programs in Latin America
■ 20-year agreement, guaranteed exclusivity and seat
availability from Avianca
■ Solid burn-to-earn ratio
■ 12% YoY growth in 2015 in revenue from
external clients
■ 2,700+ hours of flight simulators
commercialized
■ 12 cargo aircraft(1)
■ 1,286 mm ATKs(2)
■ 685.4 mm RTKs(2)
■ 53.5% | 17.06% market Share Colombia |
Miami
■ 7.3+ mm members
■ 591+ active co-branded credit cards
■ 320 Commercial Partners
Courier
COURIER AND CARGO
SERVICES
LOYALTYBUSINESS
OTHERSERVICES
Business Overview Brands Key Highlights Semester 2017
Avianca Holdings: more than just an airline
123.02
131.75
2Q16 2Q17
53.5%
13.4% 11.8% 11.0% 10.2%
3.9%
33.9%
AVH Atlas Latam UPS Skylease Cargolux Others
Source: Company.(1) On a per trip basis.(2) Includes consolidated revenues from the cargo operation in Mexico / When indicated the figures exclude the following one-time items: $0.620M: extraordinary projects; 2Q2016
figures exclude one-time expenses disclosed on previous earnings releases and cargo discount - 1Q2016 cargo discount: $28.0(3) Includes bellies and excludes Colombia domestic operations. Includes commercial agreements with OceanAir Linhas Aereas, not included in official statistics.(4) International Cargo – Aeronáutica Civil de Colombia (as of June 2017)(5) Miami-Dade Aviation Statistics, by airline group (as of June 2017)
51.36%
53.57%
2Q16 2Q17
306.0
356.8
2Q16 2Q17
Avianca Cargo: financial and operational results
Segment Overview
During 2Q17 Avianca Cargo moved a total of 12,652 tons of Mother’s Day flowers, +6% YoY increase compared to
last year’s Mother’s Day season
Strong performance for first semester 2017, with an increase of +4.2% in transporting tons when compared to same
period in 2016
New A330Fs provide reduced unit costs, higher capacity (up to 40% more than the previous fleet)(1) and improved
reliability
Key Metrics (Cargo and Courier)
RTK (MM)(3) +16.6%
Market Share Colombia (2017)(4) Market Share Miami (2017)(5)
(% Market share by freight carried) (% Market share by freight carried)
Revenue (US$MM)(2) +7.10% ATK (MM) (3)
595.8666.0
2Q16 2Q17
+11.8%
Load Factor +221 bp
17.06% 17.06% 15.87%13.10%
8.73% 7.94%
40.08%
AVH Latam Atlas UPS Amerijet Skylease Others
LIFEMILES LOYALTY PROGRAM
NEW COMMERCIAL PARTNERS & AWARDS
Source: Company information
Colombia
Peru:
Ecuador:
Paraguay:
South America Central America
El Salvador:
• 2Q’17 revenues increased 21.6% vs 2Q´16
• 591K active cobranded credit cards, an increase of 23.0% vs. 2Q’16
• More than 7.3 million members, a 8.2% increase vs. 2Q’16
• 320 commercial partners, +9.6% vs 2Q’16
FLIGHT PLAN2017
Source: Company information.
2Q 2017 U P DAT E D 2 0 1 7 O U T LO O K
PAX
ASK
LF
E B I T ¹
9.0% 4.5% – 6.5%
9.0% 7.0% – 9.0%
82.0% 80.0% – 82.0%
5.7% 7.0% – 9.0%
Source: Company Information1. When indicated the figures exclude the following one-time items: $1.7M: extraordinary projects; 1Q2016 figures exclude one-time expenses disclosed on previous earnings releases and cargo discount - 1Q2016 cargo discount: $28.0
1H 2017
7.2%
7.5%
81.9%
6.1%
4.0% – 6.0%
6.5% – 8.5%
80.0% – 82.0%
6.0% – 7.0%
2 0 1 7O U T LO O K
The Company continues to successfully optimize its cost structure and enhanceprofitability
Strongest second quarter Load Factor in company history of 82%, +390 bp vs 2Q16
First year over year yield increase since 2014, +318 bp reaching 8.5 US¢
In Summary:
5.7% Adjusted EBIT1 Margin for 2Q17, +168 bp vs 2Q16, strongest 2Q EBIT since 2013
US$1.09 Billion total revenues in 2Q17, strongest 2Q result since 2014, +16.5% year onyear
US$ 34.4 Millions Net Income for the first semester of 2017 (US$ 8.8 Millions for 2Q17),a relevant increase vs 1H16
Source: Company Information1. When indicated the figures exclude the following one-time items: $0.620M: extraordinary projects; 2Q2016 figures exclude one-time expenses disclosed on previous earnings releases and cargo discount.
Thank YouContact Information:Investor Relations [email protected]: (57) 1 – 5877700 www.aviancaholdings.com