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A E R O F L O T G R O U PQ2 AND 6M 2019 IFRS R ESULTS
30 August 2019
Speakers:
Andrey Chikhanchin – Deputy CEO for Commerce and Finance
Andrey Panov – Deputy CEO for Strategy, Service and Marketing
Ivan Batanov – Head of Revenue Management
2
This document has been prepared by PJSC “Aeroflot” (the “Company”). By attending the meeting where the presentation is made, or by reading the
presentation slides, you agree to the following.
This document does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to
purchase or subscribe for, any securities of the Company in any jurisdiction, nor shall it or any part of it nor the fact of its presentation or distribution form
the basis of, or be relied on in connection with, any contract or investment decision.
No reliance may be placed for any purpose whatsoever on the information contained in this document or on assumptions made as to its completeness.
No representation or warranty, express or implied, is given by the Company, its subsidiaries or any of their respective advisers, officers, employees or
agents, as to the accuracy of the information or opinions or for any loss howsoever arising, directly or indirectly, from any use of this presentation or its
contents.
This document may include forward-looking statements. These forward-looking statements include matters that are not historical facts or statements
regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial
condition, liquidity, prospects, growth, strategies, and the market in which the Company operates. By their nature, forwarding-looking statements involve
risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you
that forward-looking statements are not guarantees of future performance and that the Company’s actual results of operations, financial condition and
liquidity and the development of the market in which the Company operates may differ materially from those made in or suggested by the forward-
looking statements contained in this document. The Company does not undertake any obligation to review or confirm expectations or estimates or to
update any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation.
Disclaimer
3
Aeroflot Group 6M 2019 Highlights
91.9 bn
80.0 bn24.9 mln
PAX
+ 13.4 %
ASK
+ 14.9 % + 17.2 %
266 bn311 bn
Revenue (RUB)
6M 2018 6M 2019
¹ Immaterial deviations throughout the presentation are explained by rounding
• In 6M 2019 Aeroflot Group has continued operational development via expanding capacity onthe back of opportunities provided by the market.
• Notwithstanding double-digit capacity growth which allowed the Group to significantlyincrease number of passengers transported, Aeroflot managed to improve yields and boostrevenues y-o-y.
28.2 mln
+ 2.6 %
3.633.73
Blended Yield (RUB)
4
1. Market Update and Operating Results
2. Network and Schedule Overview
3. Fleet Overview
4. Financial Performance
5. Appendix
5
28.2
8.24.2 3.9
8.5
13.2
AeroflotGroup
S7 Group Ural Airlines UTair Group ForeignCarriers
Others
7.7 8.5
6.27.0
13.915.4
Q2 2018 Q2 2019
17.2 18.4
18.0 19.7
35.238.1
Q2 2018 Q2 2019
International Routes
Domestic Routes
30.7 33.2
30.1 33.0
60.8 66.2
6M 2018 6M 2019
13.8 15.5
11.112.7
24.928.2
6M 2018 6M 2019
Source: TCH, Company estimates. Figures include foreign carriers’ traffic.
Passenger Traffic: Market vs Aeroflot Group Change in Airlines’ Passenger Numbers
mln PAX, 6M 2019
6M 2018
Growing Market Share (PAX)
6M 2019
+3.3
+1.0
+0.2
+1.3
Change in PAX million
Source: TCH, Rosaviatsia, Company estimates / 1 UTair Group calculation in 2019 includes Utair and Utair-
Cargo, in 2018 includes UTair, Utair-Cargo and Turukhan
Foreign Airlines Other Russian Airlines
+1.7 p.p.
11.2%
10.1%
12.6%
7.2%
9.1%
5.7% Total Market 6.2%
6.8% International 7.2%
4.5% Domestic 4.8%
Russian Air Transportation Market (million PAX)
incl. PAX of Russian and Foreign Carriers and intl. transit PAX
Aeroflot Group (million PAX)
8.1%
9.7%
12.4%
14.7%
Market Dynamics Net of Aeroflot Group
• Aeroflot Group continued to deliver growth increasing PAX by 13.4% in 6M 2019 expanding market share.
8.9%
“Clean” Market Share of Aeroflot Group (Net of Intl.-Intl. Transit Traffic)
38.7% Aeroflot Group 40.3%
1
+0.3-0.8
8.2%
13.4%
Competitive Dynamics
40.9%
11.8%6.5%5.9%
15.3%
19.6%
42.6%
12.3%6.4%
5.8%
12.8%
20.0%
6
Aeroflot Group Multi-Brand Strategy
0.7 0.7
63.1%
• Flagship carrier
• Premium product (4 Stars)
• High income and middle class
• Hub and spoke model
• Scheduled network operated
under SU (Aeroflot) code
• Scheduled flights from
Moscow are integrated in
Aeroflot network in SVO
• Charter operations
Premium
Regional and Charter
Regional / Far-East
Low Cost
Business Model Focus Airport PAX Contribution1Brand PAX Growth
6M 2019
16.2 17.8
17.8
+9.7%
4.8 5.1
3.2
4.6
7.2%
+44.7%
+2.3%
6M 2018 6M 2019
6M 2018 6M 2019
6M 2018 6M 2019
6M 2018 6M 2019
18.1%
16.2%
2.6%
5.1
4.6
0.7
• Moscow
(Sheremetyevo)
• Saint-Petersburg
(Pulkovo)
• Moscow
(Sheremetyevo,
Vnukovo)
• Vladivostok,
Khabarovsk,
Yuzhno-Sakhalinsk
• Moscow (Vnukovo)
• Flights from the
regions
• Short and mid-haul flights
• Focus on domestic
segment,
• Popular underserved
international routes
• Point-to-point carriage
• The Far East airline flying on
short- and mid-haul direct
international and domestic
routes
• Flights to remote cities (local
flights)
• Multi-brand product offering to capture customers in every market segment: from premium to low-cost.
• Aeroflot and Pobeda – key engines of the Group – increased traffic by 1.6 and 1.4 million PAX respectively.
1 PAX contribution as of 6M 2019. Absolute number of passengers in million in green circle.
7
3.74.4
4.8
2.12.5
2016 2017 2018 6М 2018 6М 2019
Aeroflot Airline Domestic and International Transit
Share of international-international transit in total traffic of Aeroflot Airline
13.1% 13.6% 13.6% 12.8% 14.2%
Increase in International – International Traffic
Average weekly frequency per route – Aeroflot airline Considerable share of transit of Aeroflot airline in SheremetyevoGrowth
6M 2019
… Results into a Flexible Approach to Transit FlowsGrowing Connectivity of Aeroflot Airline’s Flights1 ...
Total Aeroflot airline int. – int. transit traffic, million PAX (Aeroflot flights only)
21.2%
Key International Transit Markets
Connectivity ratio
2.0%
1.2%
2.7%
Total 6M 2019
traffic:
17.8 million pax
NEA
SWA
SEA
ME
WE
EE
NA
Source: Company data.1 Data for Aeroflot airline’s own flights
• Increasing flight frequency improves connectivity and supports Aeroflot’s traffic growth in Sheremetyevo airport.
• Advantageous geographical positions and Group’s efforts support traffic growth on key European and Asian
destinations.
13.7 13.9
24.325.0
17.6 17.9
22.3x 23.8x
6М 2018 6М 2019
12.5 13.113.9
23.124.2
25.5
16.217.0
18.0
19.1x 21.2x 22.0x
2016 2017 2018
International Domestic Combined
11.0 mln
61.3%
2.5 mln
14.2%2.5 mln
14.5%
1.8 mln10.0%
Point-to-pointInternational - InternationalInternational - Domestic / Domestic - InternationalDomestic - Domestic
8
92.5% 92.6% 92.5%
Q1 Q2 6M
1,401.71,754.7
3,156.4
2,039.62,527.0
4,566.6
Q1 Q2 6M
2018 2019
62
Krasnodar
Rostov
NazranMakhachkala
Astrakhan
Volgograd
KazanPerm
Chelyabinsk
Ekaterinburg
Surgut
Novosibirsk
Bergamo
Bratislava
Cologne
Memmingen
Girona
Samara
Cheboksary
Larnaca
Tivat
Saint Petersburg14
Nizhnekamsk
Moscow
Vladikavkaz
Network • Operating from Vnukovo airport (3rd Moscow airport by PAX)
• Network comprising 108 routes (62 unique for the Group)
Fleet• 30 Boeing 737-800 NG (30.06.2019)
• Single class cabin with 189 seats per plane
Key features
and
achievements in
6M 2019
• 4.6 million PAX in 6M 2019 (+44.7% y-o-y)
• 6M 2019 PLF of 92.5%
• International RPK is 30% of total Pobeda traffic
• Intra-region and international flights from the regions development
2023 Goals• Accelerated expansion in domestic and international segments
• c25-30 mln PAX annually
Strong Passenger Load Factor
Overview of Pobeda
• Pobeda, the only Russian LCC, is a timely value proposition to cost conscious passengers.
Growing Passenger Flows
thousand PAX
Pobeda’s Network (Summer 2019)
PLF, %
Tbilisi
Krasnoyarsk
Pisa
Base cities with >10 routes served from city
(number of routes in circle)
Baden-Baden
Ulan-Ude
45.5%
44.0%
44.7%
Karlovy VaryLeipzig
Venice
Kaliningrad
Eindhoven
Helsinki
Innsbruck
Kemerovo
Salzburg
Berlin
Rome
Kirov
Min.Vody
Petrozavodsk
Tomsk
XXCities with <10 routes served from city
Cities where the airline operates to
Anapa
AntalyaBodrum
Bari
Cagliari
CataniaDalaman
Gelendzhik SochiGenova
Gazipaşa
Istanbul Gyumri
Omsk
Ostende
Palermo
Riga
Rimini
TyumenUlyanovsk
Varna
Batumi
Magnitogorsk
12
Pobeda Airline: Acceleration of Growth
9
1. Market Update and Operating Results
2. Network and Schedule Overview
3. Fleet Overview
4. Financial Performance
5. Appendix
10
12.610.7
14.613.2
7.9
13.8
11.1
16.914.5
8.1
Total scheduled International Domestic Medium-haul Long-haul
6M 2018 6M 2019
Aeroflot routes
Rossiya routes
Aurora routes
Average Scheduled Flight Frequency per Route (Aeroflot Group ex-Pobeda)
• Accelerated growth of destinations, sustained focus on increase in frequencies on scheduled routes.
• Aeroflot Group operates flights to 187 unique destinations in 57 countries (in 2019 summer schedule, incl. Russia).
(6M 2019, y-o-y)
Note: 1 Scheduled flights of Aeroflot Group (excluding Pobeda LCC)
9.1%3.9%
15.8%9.9%
1.9%
# of Flights Evolution by Region1
Increase in Group frequencies by 9.1% was mainly supported by expansion of the number of frequencies in domesticsegment (+15.8%) and in the sector of medium-haul routes (+9.9%).
Los Angeles
MOSCOW
Malaga
Alicante
Amsterdam
Brussels
Stockholm
AthensAntalya
Barcelona
Belgrade
Bologna
BudapestParis
Copenhagen
DresdenDusseldorf
Rome
Frankfurt
Geneva
Hannover
Hamburg
Helsinki
Heraklion
Istanbul
Larnaca
London
Lyon
Madrid
Munich
MilanNice
Oslo
Bucharest
Prague
Riga
Thessaloniki
SofiaSplit
Stuttgart
Berlin
Tbilisi
Tenerife
Tivat
Tallinn
Venice
Vienna
Valencia
Kaunas
Warsaw
Zagreb
Zurich
Lisbon
Havana
Washington
New York
Miami
Male
Phuket
Ho Chi Minh City
Geographic Network
MOSCOW
Anapa
Abakan
Adler
Arkhangelsk
Astrakhan
Barnaul
Chelyabinsk
Belgorod
Magadan
Gelenzhdik
Khanty Mansiysk
Irkutsk
Kemerovo
Kaliningrad
Khabarovsk
Krasnoyarsk
Krasnodar
SamaraKazan
Saint Petersburg
Murmansk
Magnitogorsk
Mineral Waters
NizhnekamskNizhny Novgorod
Nizhnevartovsk
Novokuznetsk
New Urengoy
Novosibirsk
Perm
P. Kamchatsky
Orenburg
Rostov
Saratov
SyktyvkarSurgut
Simferopol
Salekhard
Stavropol
EkaterinburgTyumen
TomskUfa
Yu. Sakhalinsk
Volgograd
Voronezh
Vladivostok
Yakutsk
Aktobe
Almaty
Shymkent
Yerevan
Bishkek
Atyrau
Baku
KaragandaChisinau
KostanayMinsk
Aktau
SamarkandTashkent
Astana
Beirut
Dubai
Teheran
Tel Aviv
Bangkok
HanoiHong Kong
Guangzhou
Delhi Shanghai
Tokyo
Beijing
Seoul
Ulan Bator
Sochi
Frankfurt
Dalian
Harbin
Busan
Antalya
BarcelonaBurgas
Paris
Dusseldorf
Rome
Hamburg
Varna
Larnaca
Munich
MilanNice
Prague
Rimini
Berlin
TivatIstanbul
Vienna
Makhachkala
Orly
Omsk
Minsk
Chisinau
Aeroflot Group Network
9.6 %
16.5 %
5.8 %
(10.3)%
15.7 %
12.1 %
8.1 %
Total
Middle East & Africa
CIS
North & Central America
Asia
Europe
Russia
11
2.71
3.08
2.922.88
3.032.97
Domestic International Total
2.92
3.35
3.163.07
3.20 3.15
Domestic International Total
3.33
4.00
3.713.58
3.943.79
Domestic International Total
3.51
4.29
3.933.72
4.133.95
Domestic International Total
• Competitive positioning, adjustment of fuel surcharges, changing mix of operations at subsidiaries’ level due to
rapid expansion of LCC and high base of previous year affected RUB yields in 6M 2019.
Note: Data presented based on management accounting figures, scheduled flights revenue is used for calculations.
% Y-o-Y increase 2018 2019
Q2 Yield (PAX Revenue / RPK)
RUB
Q2 RASK (PAX Revenue / ASK)
RUB
0.4%
5.4%
(0.4)%
(3.7)%(4.4)%
6.1%
Aeroflot Group Scheduled Flights Revenue Units
6M Yield (PAX Revenue / RPK)
RUB
6M RASK (PAX Revenue / ASK)
RUB
2.2% 6.6%1.5%
(1.4)%(1.9)%
7.4%
12
9.4%
5.4%4.6%
5.8%
7.9%
(5.8)%
Jan Feb Mar Apr May Jun
Aeroflot Airline Total Yield, 2019
Aeroflot Airline Yield Dynamics (Monthly)
RUB/RPK, Change y-o-y in %
Aeroflot Airline Total Yield, 2018
• Aeroflot airline yields showed significant improvement on a monthly basis throughout both first half of 2018 and
2019 (y-o-y).
• Having grown by an impressive 17.2% in June 2018 the level of yields represented high base for further yield
increases in 2019 and resulted into adjustment of June 2019 yield by 5.8%.
• July 2019 yields are also affected by high base effect of World Cup in 2018, which is exacerbated in international
segment by exchange rate dynamics of 2019.
RUB/RPK, Change y-o-y in %
Source: Company calculations, data presented based on management accounting figures for Aeroflot airline standalone; immaterial deviations vs. historical data may occur due to
adjustments in Revenue Management System (RMS)
0.4%
4.4%
7.7%
5.1%
6.2%
17.2%
Jan Feb Mar Apr May Jun Jan Feb Mar Apr May
Jun
13
1. Market Update and Operating Results
2. Network and Schedule Overview
3. Fleet Overview
4. Financial Performance
5. Appendix
14
1 Excluding planes not operated by the airlines of the Group.
• Well-balanced fleet structure in line with Group’s strategy
Breakdown by Company 1
Breakdown by Aircraft 1
Narrow-body
(medium-haul)67%
Narrow-body
(regional) 17%
Wide-body16%
Aeroflot69%
Rossiya17%
Aurora6%
Pobeda8%
Aircraft TypeOperated by Total as of Total as of Change vs.
Aeroflot Subsidiaries 30-June-19 31-Dec-18 31-Dec-18
Wide-body 41 19 60 58 2
Airbus A330 22 - 22 22 -
Boeing 777 19 10 29 27 2
Boeing 747 - 9 9 9 -
Narrow-body (medium-haul) 160 83 243 244 (1)
Airbus A319 - 31 31 35 (4)
Airbus A320 78 6 84 85 (1)
Airbus A321 35 - 35 37 (2)
Boeing 737 47 46 93 87 6
Narrow-body (regional) 49 13 62 64 (2)
DHC 8 - 10 10 11 (1)
DHC 6 - 3 3 3 -
SSJ 100 49 - 49 50 (1)
Total fleet1 250 115 365 366 (1)
Aeroflot Group Fleet Overview
Aeroflot Group Fleet Breakdown
15
12/31/2018 2019E 2020E 2021E 2022E 2023E
• Aeroflot Group continues to intelligently manage capacity additions and develop its fleet taking into account market
trends and opportunities.
Aeroflot Group Fleet as at Year-end2
Number of aircraft
Delivery/Phase-out Schedule1
Type of 6M 2019 Fleet as at
30.06.20191
Q3-Q4 2019E
aircraft Delivery Phase out Delivery Phase out
Wide-body (long-haul) 2 - 60 - (3)
A-330 - - 22 - (3)
B-777 2 - 29 - -
B-747 - - 9 - -
Narrow-body (medium-haul) 7 (8) 243 3 (7)
A-319 - (4) 31 - (1)
A-320 1 (2) 84 - (4)
A-321- (2) 35 - (2)
B-7373
6 - 93 3 -
Narrow-body (regional) - (2) 62 10 (1)
SSJ-1004 - (1) 49 10 -
DHC-8 - (1) 10 - (1)
DHC-6 - - 3 - -
TOTAL 9 (10) 365 13 (11)
1 As of 30.06.2019, not including aircraft leased or subleased to other operators.2 According to existing strategy. Not including aircraft leased or subleased to other operator. Number of planes in 2023 is average for the year.3 Deliveries of 3 737 MAX are likely to be delayed to 2020.4 Additions are subject to corporate approval.
366
~520
Fleet Expansion Strategy
16
1. Market Update and Operating Results
2. Network and Schedule Overview
3. Fleet Overview
4. Financial Performance
5. Appendix
17
Financial Highlights: 6M 2019
• Financial results of 6M 2019 are impacted by high base of previous year as well as continuing fuel and
aircraft and passenger servicing costs pressure.
• IFRS 16 implementation also resulted in major changes on the EBITDA, Operating and Net Loss lines.
• Restated bottom line figure in 6M 2018 is connected with FX revaluation of operating lease liabilities on the
balance sheet as hedge accounting has been implemented prospectively starting from January 1, 2019.
1 Restated financial results presented based on IFRS 16 full retrospective application where applicable. Q2 and 6M 2019 presented based on IFRS 16 full retrospective application.
Q2 2018
restated1 Q2 2019 ChangeRUB mln
(where applicable)
6M 2018
restated1 6M 2019 Change
13,871 15,431 11.2% Passenger Traffic (mln PAX) 24,856 28,195 13.4%
153,880 173,399 12.7% Revenue 265,822 311,440 17.2%
135,456 152,456 12.6% PAX Traffic Revenue 232,352 271,711 16.9%
41,431 46,963 13.4% EBITDA 59,014 68,296 15.7%
26.9% 27.1% 0.2 p.p. EBITDA margin 22.2% 21.9% (0.3) p.p.
20,649 20,517 (0.6)% Operating Income 17,453 14,618 (16.2)%
(19,963) 6,933 n/a Net Income/(Loss) (30,379) (8,784) (71.1)%
(28,944)Loss on FX (Operating Lease Aircraft
Liabilities Revaluation) After Tax(27,498)
8,980 6,933 (22.8)% Adjusted Net Income/(Loss) (ex. Loss on FX) (2,881) (8,784) >3x
18
265,822
38,752 607 554 5,705 311,440
6M 2018 ScheduledPassenger
Flights
CharterPassenger
Flights
Cargo OtherRevenue
6M 2019
265,822
29,815 10,631 3,165 2,006 311,440
6M 2018 Volume Currency Pricing Other 6M 2019
• Positive contribution of volume and pricing as well as support from FX were the main factors influencing revenue.
• Primary driver of revenue growth was expansion of scheduled passenger flights across all segments, notably in
Russia, Europe and Asia
Revenue by Key Factors
RUB mln
17.2% 17.2%
Revenue by Business Segments
RUB mln
14.6% 0.2% 0.2% 2.1%+ + +
Growth in operating metrics:RPK + 14.0%PAX + 13.4%
Depreciation ofRUB in 6M 2019y-o-y by c10%vs. USD and byc3% vs. EUR Growth across geographies:
Russian revenue +20.8%International revenue +16.1%
Currency effect on other revenue
Domestic yieldup by 6.9%,internationalyield flat y-o-y
11.2% 4.0% 1.2% 0.8%+ + +
Revenue Growth Decomposition
19
Operating Costs
Q2 2018
restated1 Q2 2019Change
y-o-y
Change
ex. FX
Operating Expense
(RUB mln If not stated
otherwise)
6M 2018
restated1 6M 2019Change
y-o-y
Change
ex. FX
% of Total OpEx
(6M 2019)
43,843 49,008 11.8% 10.2% Fuel 77,885 92,708 19.0% 15.4% 31.2%
89,388 103,874 16.2% 15.1% Opex (ex. Fuel) 170,484 204,114 19.7% 17.4% 68.8%
26,725 32,294 20.8% 20.5%Aircraft and passenger
servicing48,633 61,165 25.8% 23.5% 20.6%
20,782 26,446 27.3% 27.3% D&A and customs duties 41,561 53,678 29.2% 29.2% 18.1%
20,080 22,215 10.6% 9.9% Staff 41,298 44,794 8.5% 8.1% 15.1%
6,932 7,534 8.7% 7.9% SG&A2 13,092 14,203 8.5% 5.4% 4.8%
5,992 7,813 30.4% 26.1% Maintenance 10,101 13,987 38.5% 29.2% 4.7%
1,953 2,135 9.3% (0.7)% Short-term and immaterial lease 2,724 3,309 21.5% 10.4% 1.1%
6,924 5,437 (21.5)% (25.3)% Other expenses3 13,075 12,978 (0.7)% (8.4)% 4.4%
133,231 152,882 14.7% 13.5% Total Opex 248,369 296,822 19.5% 16.8% 100.0%
• In 6M 2019 operating costs were significantly impacted by expansion of operations with fuel and aircraft and passenger
servicing being the key contributors to growth.
• Lease, amortization, maintenance and other lines have been affected by IFRS 16 implementation.
1 Restated financials presented based on IFRS 16 full retrospective application. Q2 and 6M 2019 presented based on IFRS 16 full retrospective application.2 Includes sales and marketing expenses and administration and general expenses.3 Other expenses include Global Distribution Systems cost, reserves accrual and reversal, catering expenses, banks’ commissions and other operating income and loss.
20
3.11
0.04 0.06
0.06 (0.03) (0.01) 0.03 0.00 (0.02)
3.23
(0.07)
3.16 3.11
Restated CASK6M 2018
Fuel Aircraft andPassengerServicing
D&A and CD* Staff SG&A Maintenance Short-term andImmaterial Lease
Other Expenses CASK 6M 2019 FX CASK 6M 2019ex. FX
Restated CASK6M 2018
Group Unit Costs
* Customs duties
• Cost per ASK increased by 4.0% from RUB 3.11 in 6M 2018 to RUB 3.23 in 6M 2019 on the back of fuel, aircraft and
passenger servicing and maintenance growth.
Q2 2018
restated1 Q2 2019 Change Operating Expense per ASK (CASK), RUB6M 2018
restated1 6M 2019 Change
1.01 1.00 (0.8)% Fuel 0.97 1.01 3.6%
2.06 2.13 3.2% Opex (ex. Fuel): 2.13 2.22 4.2%
0.62 0.66 7.3% Aircraft and Passenger Servicing 0.61 0.67 9.5%
0.48 0.54 13.0% D&A and Customs Duties 0.52 0.58 12.4%
0.46 0.45 (1.8)% Staff 0.52 0.49 (5.6)%
0.16 0.15 (3.5)% SG&A 0.16 0.15 (5.6)%
0.14 0.16 15.8% Maintenance 0.13 0.15 20.5%
0.05 0.04 (3.2)% Short-term and Immaterial Lease 0.03 0.04 5.7%
0.16 0.11 (30.2)% Other Expenses 0.16 0.14 (13.6)%
3.07 3.13 1.9% Total Opex 3.11 3.23 4.0%
1.7%(2.3)%4.0%
1 Restated financials presented based on IFRS 16 full retrospective application. Q2 and 6M 2019 presented based on IFRS 16 full retrospective application.
21
44.2
42.3
40.0
50.0
45.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 6M(WA)
2019 2018
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019
66.8 65.8 65.2 64.5 64.9 64.1 - - - - - - USD/RUB
60.0 64.4 67.0 71.6 70.3 63.0 - - - - - - Brent (USD)
• Efficient fuel procurement: 1-year supply contracts in
airports across Russia
• Majority of fuel purchased in Russia and almost all
fuel at international airports supplied at formula-
linked price - Jet fuel priceIntl = NW Europe (FOB
Rotterdam) price x Discount x FX rate2 x (VAT)3 +
Storage/Fuelling/Supply fees (if any of these applicable)
• Increasing average fuel price per tonne.
Aeroflot Airline:
• Q2 2019: 44.5 thousand RUB (-0.4% y-o-y).
• 6M 2019: 44.2 thousand RUB (+4.5% y-o-y).
• Aeroflot Group:
• Q2 2019: 44.9 thousand RUB (+0.1% y-o-y).
• 6M 2019: 44.6 thousand RUB (+4.5% y-o-y).
• Aeroflot is achieving efficiency gain in fuel costs as new aircraft are put into operation.
• Oil price and RUB fluctuations led to upward pressure on jet fuel price in 6M 2019.
Fuel Consumption per ASKAeroflot Airline Jet Fuel Price
(gr/ASK)(thousand RUB per tonne of jet fuel)
1
Source: Bloomberg, Company data1 Weighted average price for 6M
Comments
2 USD/RUB exchange rate as per the Central Bank of Russia3 Assuming current VAT rate
(0.6)%
12%8%
11%
Fuel Cost Management
8%
(7)%
22.5 22.3
6M 2018 6M 2019
22
59,014
29,815 3,165
2,006
10,631 (6,746)
(11,971)
(3,340)(11,433)
(282) (2,948)(711) 1,095
68,296
Restated
EBITDA 6M
2018
Volume Pricing Other FX benefit on
revenue
FX drag on
costs
Fuel* Staff* Aircraft and
PAX*
Leases* Maintenance* Admin & Sales
& Marketing*
Other OPEX* EBITDA 6M
2019
EBITDA Evolution
(RUB mln)
* Excluding currency impact
** Restated EBITDA presented based on IFRS 16 full retrospective application. 6M 2019 EBITDA presented based on IFRS 16 full retrospective application.
• Positive FX impact was observed on revenue side on the back of weakening RUB, which outpaced pressure on
operating costs.
• Key drivers of EBITDA adjustment along with the growth in size and scale of operations were increase in jet
fuel price and aircraft and passenger servicing costs.
Net volume and price effect
∑=(29,590) RUB mln
Total effect on revenue
∑=45,618 RUB mlnTotal effect on costs
∑=(36,336) RUB mln
Net volume and price effect
∑=34,987 RUB mlnNet FX effect
∑=3,885 RUB mln
****
23
Pobeda Financial Results
Increasing PAX Traffic RASK dynamics
Increasing ASK CASK dynamics
2.28 2.42
6M 2018 6M 2019
3.2
4.6
6M 2018 6M 2019
Million passengers RUB
Pobeda Statement of Profit and Loss (Standalone)
2.272.45
6M 2018 6M 2019
PAX up by 44.7% in 6M 2019 RASK up by 6.5% in 6M 2019
ASK up by 46.7% in 6M 2019 CASK up by 7.9% in 6M 2019
Q2 2018
restated2 Q2 20192 Change RUB mln6M 2018
restated2 6M 20192Change
8,657 13,108 51.4% Revenue 13,736 21,459 56.2%
7,688 11,717 52.4%Operating
Expenses13,679 21,655 58.3%
968 1,391 43.7%Operating
Income / (Loss)56 (196) n/a
(1,228) 371 n/aFinance
Income/expenses
(net)3
(1,318) 1,644 n/a
(143) 1,796 n/aNet Income /
(Loss)(984) 1,503 n/a
1,706 3,022 77.1% EBITDA 1,296 2,668 >2x
19.7% 23.1% 3.4 p.p. EBITDA margin 9.4% 12.4% 3.0 p.p.
Note: based on managerial accounts transformed under IFRS principles1 Calculation based on Total Revenue of the Company2 Restated financials presented based on IFRS 16 full retrospective application. Q2 and 6M 2019 presented based on IFRS 16 full retrospective application.3 Including net FX gain from lease liabilities revaluation in the amount of 2.9 bn RUB in 6M 2019; eliminated in consolidated financials due to hedging of FX-denominated liabilities with FX-
denominated revenues (effectively non-cash income).
• Pobeda has demonstrated solid results backed by strong demand and active expansion of the fleet
in 6M 2019.
Billion ASK RUB
1
6.0
8.9
6M 2018 6M 2019
24
Leverage and Liquidity
RUB mln 31-Dec-2018 30-Jun-2019 Change
Borrowings 3,486 3,359 (3.6)%
Lease Liabilities 655,9312 596,084 (9.1)%
Pension Liabilities 908 916 0.9%
Total Debt 660,325 600,359 (9.1)%
Cash and Short Term
Investments30,148 48,031 59.3%
Net Debt 630,177 552,328 (12.4)%
• Total debt decreased by 9.1% on the back of lower finance lease liabilities while Net Debt decreased by 12.4%.
• Cash position of RUB 48.0 billion and undrawn credit lines of RUB 63.5 billion.
1 Based on financial data under IFRS 16; 30-Jun-2019 exchange rate - 63.08 RUB per USD , 31-Dec-2018 exchange rate - 69.47 RUB per USD.2 Lease liabilities updated versus previously reported figure of 661,182 million RUB due to refinement of judgments & estimates. Net debt / EBITDA adjusted due to amendment of Lease liabilities in ratio numerator.
Debt Profile1 Net Debt / EBITDA (management accounting)
Borrowings breakdown by currency
Source: management accounting. Q1 and 6M 2019 EBITDA used in the calculation is based on data under IFRS 16; 2018 data is based on previously reported EBITDAR (pre-IFRS 16).
5.14.5
3.8
31-Dec-2018 31-Mar-2019 30-Jun-2019
2,931
428
RUB USD
2
25
Adoption of IFRS 16 – Lease Liabilities Revaluation
• Hedge accounting is applied to finance lease liabilities from 30-Sep-14, to operating leaseliabilities – from 1-Jan-2019.
• Prospective introduction of hedge accounting for operating leases from 2019 explains FX lossesin restated figures for 2018.
• In 6M 2018 RUB devaluation of 9% vs USD since the beginning of the year resulted in 28 billionRUB paper loss on FX.
million RUB6M 2018
reported16M 2018
restated2 Difference
EBITDA 6,622 59,014 + 52,392
D&A and Customs Duties 6,901 41,561 + 34,660
EBIT (Operating Profit) (279) 17,453 + 17,732
Net Loss (5,228) (30,379) - 25,151
Loss on FX (Operating Lease
A/с Liabilities Revaluation)
After Tax
(27,498)
Adjusted Net Loss (5,228) (2,881) + 2,347
Finance Lease
(IAS 17)
RUB/USD
Effect on Profit & Loss Exchange rate dynamics
1 Reported financial results represent 6M 2018 data reported in August 2018.2 Restated financial results presented based on IFRS 16 full retrospective application.
55
57
59
61
63
65
67
69
Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18
+9.0% (31-Dec-17 – 30-Jun-18)
393,090
million RUB
Lease Liabilities (1-Jan-18)
Operating Lease
(IFRS 16)
Total Lease
Liabilities
100,688
million RUB
493,778
million RUB
Hedge accounting
applied from
30-Sep-14
Hedge accounting
not applied for 2018
26
1. Market Update and Operating Results
2. Network and Schedule Overview
3. Fleet Overview
4. Financial Performance
5. Appendix
27
46.3 52.6
56.4 62.6
68.8
2014 2015 2016 2017 2018
103.1 97.9 101.4 102.3 110.0
2014 2015 2016 2017 2018
46.3 52.6 56.4 62.6 68.8
65.5 54.7 46.461.1
68.1
111.8 107.3 102.8
123.7137.0
0.0
50.0
100.0
150.0
2014 2015 2016 2017 2018Domestic Routes International Routes
0.31
1.78
0.50 0.34 0.36 0.35
3.73
2.50
1.13 0.69
0.46 0.46
UK USA Turkey Russia China Brazil
… from airlines on domestic routesRailways facing increasing competition…
Notes: (1) Total local and foreign carriers’ traffic
Sources: FAVT, Aeroflot estimates
Total CAGR 5.2%
International – 1.0% | Domestic – 10.4%
Despite fast growth of the recent years,Russian airline industry still haspromising growth prospects
ChangeFY17-18
11.5%
10.0%
(6.9)% 3.6%
10.9%
17.9%
RZD long-haul rail traffic (mln PAX) Domestic air traffic (mln PAX)
(2) Airline O&D per capita per year, as of 2018
Sources: Oxford Economics, Aeroflot estimates
0.31
Domestic PAX per capita
1.78
0.50 0.34
x.xx
(5.0)%
13.6%
10.7%
• Russian market is well positioned for long-term growth on the back of still low penetration, additional potential from
ongoing structural changes and increasing propensity to travel by air as well as advantageous geographical
location.
Russian Total Passenger Traffic Growth, mln PAX(1) Trips per Capita (2)
0.8%
7.3%
Long-distance rail routes facedvolatile passenger traffic dynamics inthe recent years and lost over10 mln PAX over a decade
Domestic air traffic grew at a much higherpace than other means of transportation
0.36 0.35
7.9%
10.0%
Russian Air Transportation Market: Room for Growth
28
Passenger Traffic (Russian and Foreign Carriers) Capacity (Russian and Foreign Carriers)
Change in PAX traffic y-o-y, % Change in ASK y-o-y, %
• In 2019 market continues to grow on the back of higher demand in both international and domestic segments.
• Capacity additions are mostly carried out by Russian carriers with foreign airlines cutting their exposure
to Russian market in Q2 2019.
Source: SRS for foreign carriers, TCH for domestic carriers, Company calculations.Source: TCH, Company calculations
Total market
Market Return to Growth
30.2 %
18.6 %
11.0 %
0.6 %
(14.8)%
9.0%7.5%
11.9%13.8% 14.4%
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Foreign carriers Russian carriers
14.4 %
7.9 %
10.9 %10.6 %
9.1 %
9.9%
9.1%
10.5%
9.4%
7.2%
12.2% 8.5% 10.7% 10.0% 8.2%
Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
International Domestic
29
Operating Data – Q2 & 6M 2019
Indicator Unit
Aeroflot airline Aeroflot Group
Q2
2018
Q2
2019Y-o-Y
6M
2018
6M
2019Y-o-Y
Q2
2018
Q2
2019Y-o-Y
6M
2018
6M
2019Y-o-Y
Passenger Traffic th PAX 8,829 9,343 5.8% 16,223 17,796 9.7% 13,871 15,431 11.2% 24,856 28,195 13.4%
International Routes th PAX 4,452 4,938 10.9% 8,351 9,318 11.6% 6,171 6,952 12.6% 11,059 12,683 14.7%
Domestic Routes th PAX 4,377 4,405 0.6% 7,872 8,477 7.7% 7,699 8,479 10.1% 13,797 15,513 12.4%
Passenger Turnover mn pkm 23,951 25,534 6.6% 44,926 48,820 8.7% 35,244 39,383 11.7% 63,987 72,925 14.0%
International Routes mn pkm 15,427 17,471 13.2% 29,752 33,396 12.2% 20,364 22,966 12.8% 37,932 43,531 14.8%
Domestic Routes mn pkm 8,524 8,064 (5.4%) 15,175 15,424 1.6% 14,880 16,417 10.3% 26,055 29,393 12.8%
Passenger Capacity mn ASK 30,206 32,472 7.5% 57,625 63,188 9.7% 43,358 48,842 12.6% 79,982 91,885 14.9%
International Routes mn ASK 19,906 22,662 13.8% 38,818 43,725 12.6% 25,457 29,024 14.0% 47,961 55,571 15.9%
Domestic Routes mn ASK 10,300 9,810 (4.8%) 18,807 19,463 3.5% 17,901 19,818 10.7% 32,020 36,314 13.4%
Passenger Load Factor % 79.3% 78.6% (0.7) p.p. 78.0% 77.3% (0.7) p.p. 81.3% 80.6% (0.7) p.p. 80.0% 79.4% (0.6) p.p.
International Routes % 77.5% 77.1% (0.4) p.p. 76.6% 76.4% (0.3) p.p. 80.0% 79.1% (0.9) p.p. 79.1% 78.3% (0.8) p.p.
Domestic Routes % 82.8% 82.2% (0.6) p.p. 80.7% 79.2% (1.4) p.p. 83.1% 82.8% (0.3) p.p. 81.4% 80.9% (0.4) p.p.
Tonne-Kilometres mn tkm 2,410 2,547 5.7% 4,522 4,849 7.2% 3,482 3,866 11.0% 6,340 7,154 12.8%
International Routes mn tkm 1,566 1,761 12.4% 3,018 3,343 10.8% 2,023 2,271 12.3% 3,775 4,291 13.7%
Domestic Routes mn tkm 843 787 (6.7%) 1,504 1,506 0.1% 1,460 1,595 9.3% 2,565 2,863 11.6%
Revenue Flights flights 67,149 72,427 7.9% 127,381 142,563 11.9% 102,477 112,826 10.1% 191,013 215,284 12.7%
International Routes flights 32,758 35,913 9.6% 63,017 70,104 11.2% 43,070 47,827 11.0% 79,939 91,053 13.9%
Domestic Routes flights 34,391 36,514 6.2% 64,364 72,459 12.6% 59,407 64,999 9.4% 111,074 124,231 11.8%
Flight Hours hours 190,834 208,037 9.0% 365,411 410,164 12.2% 279,971 310,389 10.9% 521,923 593,926 13.8%
30
Indicator UnitRossiya Airline Pobeda Airline Aurora Airline
6M 2019 Y-o-Y 6M 2019 Y-o-Y 6M 2019 Y-o-Y
Passenger Traffic th PAX 5,091 7.2% 4,567 44.7% 742 2.3%
International Routes th PAX 2,026 10.4% 1,136 64.6% 202 10.1%
Domestic Routes th PAX 3,065 5.1% 3,430 39.1% 541 (0.4%)
Passenger Turnover mn pkm 14,853 20.6% 8,196 45.3% 1,057 (4.1%)
International Routes mn pkm 7,384 14.6% 2,470 67.9% 282 5.5%
Domestic Routes mn pkm 7,468 27.1% 5,726 37.3% 775 (7.1%)
Passenger Capacity mn ASK 18,237 23.6% 8,856 46.7% 1,604 2.8%
International Routes mn ASK 8,611 20.1% 2,783 76.0% 452 16.0%
Domestic Routes mn ASK 9,626 26.9% 6,075 36.3% 1,152 (1.6%)
Passenger Load Factor % 81.4% (2.0) p.p. 92.5% (0.9) p.p. 65.9% (4.7) p.p.
International Routes % 85.8% (4.1) p.p. 88.8% (4.3) p.p. 62.3% (6.2) p.p.
Domestic Routes % 77.6% (0.1) p.p. 94.3% 0.7 p.p. 67.3% (4.0) p.p.
Flight Hours hours 99,053 7.8% 62,809 46.8% 21,901 0.4%
Key Operating Data of Subsidiary Airlines – 6M 2019
31
• Strong operating performance on scheduled routes supported by route network development.
Source: Data presented based on management accounting for scheduled flights of Aeroflot Group (excluding charter flights)
Americas Russia CIS
Europe Middle East Asia
Performance of North and Central Americanmarket was influenced by reduction of capacity toJFK (two daily flights instead of three for Winterseason) as well as some other destinations.
Capacity have been increased to key domesticmarkets as well as smaller regional cities.Additional contribution from new services toCaucasus, Ulyanovsk and Izhevsk.
Positive contribution to regions’ KPIs comes fromincreased frequencies of Aeroflot airline andstronger demand to local destinations.
European markets performance benefited fromlaunching of additional frequencies as well asnew flights to Slovenia, Dublin, Naples, Verona,Marseille and Palma.
Operating performance of the region significantlyaffected by increased frequencies to Istanbul,Antalya and Dubai backed by strong demand.
More traffic on key scheduled destinations(Beijing, Tokyo) as well as popular leisuredestinations (Phuket, Male) amid increase infrequencies supportive for overall performance ofthe region.
6M 2019 Operating Data by Region (Scheduled Routes)
(5.1)% (4.9)% (11.7)%
5.9 p.p.
Passengerscarried
RPK ASK PLF
12.2 % 12.4 % 13.3 %
(0.6) p.p.Passengers
carriedRPK ASK PLF
14.1 % 17.1 %18.4 %
(0.9) p.p.
Passengerscarried
RPK ASK PLF
17.1 % 17.8 % 19.0 %
(0.8) p.p.
Passengerscarried
RPK ASK PLF
22.8 %26.7 % 24.8 %
1.1 p.p.
Passengerscarried
RPK ASK PLF
18.4 %
24.3 % 28.3 %
(2.5) p.p.
Passengerscarried
RPK ASK PLF
32
150 165189
224 253 250
4.14.4 4.2 4.1 4.2
4,6
2014 2015 2016 2017 2018 6/30/2019
Aircraft Average Age
251 247289
325366 365
7.06.4 6.5 6.2 6.2
6,5
2014 2015 2016 2017 2018 6/30/2019
Aircraft Average Age
• Aeroflot operates the youngest fleet in the industry among airlines with active fleet of 100+ aircraft
• Aeroflot achieved significant progress in fleet renewal both for Aeroflot airline and for the Group
Aeroflot Group Fleet in Operation 1
Aeroflot Airline Fleet in Operation 1
Average Age of the Fleet 2
1 Excludes plane out of operation 2 Average Fleet Age of Selected Airlines with Active Fleet of 100+ Aircraft according to FlightGlobal data (as of July 2019, data by legal entity)
4.6
5.1
5.3
5.6
5.6
5.6
5.8
5.9
6.1
6.1
6.2
6.3
6.4
6.4
6.7
6.7
7.0
7.1
7.1
7.2
7.3
Hainan Airlines
Wizz Air
Etihad Airways
IndiGo
Sichuan Airlines
Spirit Airlines
Qatar Airways
Shandong Airlines
Xiamen Airlines
Azul
Saudia
China Eastern Airlines
Emirates Airline
Avianca
Vueling Airlines
Singapore Airlines
EasyJet Europe
Shenzhen Airlines
China Southern Airlines
Air China
Aeroflot Group Fleet Evolution
33
Traffic Revenue Analysis
Q2 2018 Q2 2019 Y-o-Y Region 6M 20186M 2019 Y-o-Y6M 2019, % of
sch. revenue
50,832 59,289 16.6% Russia 84,791 102,422 20.8% 40.2%
35,958 38,763 7.8% Europe 61,310 68,242 11.3% 26.8%
17,127 20,021 16.9% Asia 34,592 43,626 26.1% 17.1%
6,289 7,320 16.4% CIS 10,753 12,881 19.8% 5.1%
8,115 8,208 1.1%North and Central
America13,280 13,539 2.0% 5.3%
6,541 7,728 18.1%Middle East and
Africa11,243 14,011 24.6% 5.5%
124,862 141,329 13.2% Total 215,969 254,721 17.9% 100.0%
1 Data presented based on management accounting2 Data presented based on management accounting for Aeroflot airline and routes of subsidiary airlines under commercial management of Aeroflot
6M 2019
6M 20192
Traffic Revenue Breakdown by Type
Scheduled Traffic Revenue by POS
Revenue from Scheduled Passengers (RUB mln)1
• In 6M 2019 revenue from scheduled passengers grew by 17.9% mainly driven by revenue growth on Russian,
European and Asian markets.
Total Passenger Revenue (Scheduled + Charter, RUB mln)
Q2 2018 Q2 2019 Y-o-Y Segment 6M 20186M 2019 Y-o-Y6M 2019, % of
revenue
52,750 61,175 16.0% Domestic 87,529 105,522 20.6% 38.8%
82,706 91,280 10.4% International 144,823 166,189 14.8% 61.2%
135,456 152,455 12.5% Total 232,352 271,711 16.9% 100.0%
Sheduled Passenger Flights
90.8%
Charter Passenger Flights 6.1%
Cargo 3.1%
Sales abroad29.4%
Online34.3%
Call center and own branches
3.4%
Sales in Russia32.9%
34
3.55
4.063.84
3.733.97 3.87
Domestic International Total
3.36
3.823.633.59
3.823.73
Domestic International Total
2.95
3.253.123.09 3.14 3.12
Domestic International Total
2.73
3.022.912.91
2.99 2.96
Domestic International Total
Note: Data presented based on management accounting figures, scheduled and charter flights revenue is used for calculations
• Competitive positioning, adjustment of fuel surcharges and changing mix of operations at subsidiaries’ level due to
rapid expansion of LCC as well as high base of previous year affected RUB yields in 6M 2019.
% Y-o-Y increase 2018 2019
Q2 Yield (Scheduled + Charter PAX Revenue / RPK)
RUB
Q2 RASK (Scheduled + Charter PAX Revenue / RPK)
RUB
0.7% 4.8% (0.1)%(2.1)% (3.2)%
5.1%
6M Yield (Scheduled + Charter PAX Revenue / RPK)
RUB
6M RASK (Scheduled + Charter PAX Revenue / RPK)
RUB
2.6% 6.3%1.8%0.0% (1.0)%
6.9%
Aeroflot Group Blended Flights Revenue Units
RUB RUB
35• Improvement in labour productivity has resulted in increase of key performance indicators in 6M 2019.
• Aeroflot Group headcount increased by 1.3% vs. June 30, 2018.
Traffic Revenue / Average Airlines’ Headcount PAX Traffic / Average Airlines’ Headcount
9.9%
(million RUB per employee, annualized to 30.06.2019) (passengers per employee, annualized to 30.06.2019)
Aeroflot Group Headcount by Category
13.2%
1 Aeroflot Group headcount table excludes Aeroflot Aviation School headcount amounting to 196 employees as at 30.06.2018 and 224 employees as at 30.06.2019.
30-Jun-2018 30-Jun-2019 %
Cabin crew 11,821 12,751 7.9 %
Airport services 7,163 5,447 (24.0)%
Technical maintenance and repair 5,068 5,444 7.4 %
Flight crew 3,981 4,434 11.4 %
Tickets and services sales, advertising 1,918 1,966 2.5 %
Other airline personnel (inc. airlines’ head office) 5,582 5,378 (3.7)%
Other non-airline subsidiaries’ personnel 4,968 5,625 13.2 %
Total1 40,501 41,045 1.3 %
Headcount Overview
Flight crew10.8%
Cabin crew31.1%
Technical maintenance and
repair13.3%
Tickets and services sales, advertising
4.8%
Airport services13.3%
Other airline personnel
13.1%
Other non-airline personnel
13.7%
14.8
16.7
30.06.2018 (LTM) 30.06.2019 (LTM)
1,514
1,664
30.06.2018 (LTM) 30.06.2019 (LTM)
36
79,022 88,506
(10,466)
53,305
26,843 275 (5,369)
64,588
32,185
96,773
(9,436)3,764 (1,447) (9,649)
(983)
Profit BeforeIncome Tax
D&A InterestExpense
UnrealizedNet FX Loss
Other Adj.Before
WorkingCapital
Changes
Cash FlowsFrom
OperatingActivitiesBefore
WorkingCapital
Changes
WorkingCapital
Changes andIncome Tax
Net CashFlows FromOperatingActivities
Purchase ofPPE &
CapitalizedExpenses
ProceedsFrom Sale of
PPE
DepositPlacementand Return
Net Pre-delivery
Payments forAircraft
Net LeasingDeposits for
a/c inOperatingLease and
Other
Free CashFlow 6M
2019
RestatedFree CashFlow 6M
2018
Operating and Free Cash Flows
• Strong Operating and Free Cash Flow generation in 6M 2019 notwithstanding the macro challenges.
(RUB mln)
Million RUB 6M 2019
Other adjustments before working capital changes, incl.
Change in provisions (1,990)
Effect from revenue hedging (finance lease hedge accounting) 1,337
Interest income (2,110)
Other (2,606)
* Restated data
Million RUB 6M 2019
Working capital changes and income tax, incl.
Change in accounts receivable and prepayments (392)
Change in accounts payable and accrued liabilities 32,244
Change in expendable spare parts and inventories (1,345)
Change in tax and restricted cash 1,678
(10.7)%
37
Net Income Evolution
(RUB mln)
• Increase in revenue generated by growing volumes was offset by a less favorable operating cost
environment.
• No FX losses related to revaluation of liabilities in 6M 2019 due to hedge accounting in place
resulted in significant improvement of Finance Costs in the respective period and supported the
bottom line.
(30,379)
(8,784)
39,913
5,705 (48,453)
119
27,333 1,647 40 (4,762)
53
Restated NetIncome 6M 2018
Traffic Revenue Other Revenue OperatingExpenses
Finance Income Finance Costs Hedging Result Revaluation ofEquity
Investments andother
Taxation Other Net Income 6M2019
38
4%
96%
5%
12%
83%
Loans and credit linesFinancial leaseOperating lease
• Higher Finance costs due to larger volume of liabilities related to leased
objects reflected in statement of financial position.
Indicator Impact Explanation
Operating incomeDue to redistribution of Operating lease costs
to Finance costs.
EBITDA
Due to redistribution of Lease and
Maintenance expenses to D&A and Finance
costs.
Net income No significant impact.
$$$
$$$
$$$
$$$
$$$
$$$
$$$
$$$
$$$
$$$
PnL statement 2018 2019
2018 2019E
Explanation
• Introduction of IFRS 16 standard will lead to an increase in the Group’s debt portfolio,higher Operating income and EBITDA due to redistribution of costs across PnL items.
Operating lease expenses
Maintenance and reserves
Depreciation & amortization (D&A)
Curr. translation differences
Finance costs
• Redistribution of Lease and Maintenance expenses to D&A and Finance costs
due to reflecting aircraft and other leased assets on Company’s books.
• Operating lease expense line will still hold objects not influenced by IFRS 16.
Significant changes are expected in Operating lease and Maintenance lines of PnL
• D&A increase due to higher volume of assets reflected in statement of
financial position, growth in maintenance capitalization.
• Volatility in currency translation differences will be mostly “regulated” by hedge
accounting.
Debt portfolio, % Impact on Key financial indicators
Introduction of IFRS 16
Executive Board
Personnel and Remuneration
Committee
(5 members)
General Meeting of Shareholders
Board of Directors
Audit Committee
(3 members)
Strategy Committee
(10 members)
Corporate Governance
NameAudit
Committee
Personnel and
Remuneration
Committee
Strategy
Committee
Evgeny Ditrich Chairman
Mikhail Poluboyarinov Deputy Chairman
Vitaly Saveliev
Alexander Galushka Member Member
Igor Kamenskoy Member Member Chairman
Maksim Liksutov
Dmitry Peskov Member Member
Vasily Sidorov Chairman Member Member
Yuri Slyusar Member
Maxim Sokolov Member Chairman Member
Sergey Chemezov
Board of Directors
The Board of Directors is currently composed of 11
members. The Board’s composition is well balanced
from members’ background perspective.
Incorporated in Russia, PJSC Aeroflot is subject to
Russian corporate governance regulations and follows
Russian Corporate Governance Code
Independent director according to the Russian Corporate Governance Code 39
Board of Directors
Airlines Ancillary Companies
PJSC Aeroflot
JSC Rossiya Airlines 75%-1 sh.
LLC Pobeda Airlines 100%
JSC Aurora Airlines 51%
CJSC Aeromar
On-board sales/catering51%
LLC Aeroflot-Finance
Financial services100%
JSC Sherotel
Hotel services100%
Aeroflot Aviation School
Education services100%
Note: The Group structure as at 30 June 2019; Aeroflot Group consolidates all entities: PJSC Aeroflot and all subsidiaries.
PJSC Aeroflot also owns 100% of JSC Donavia (via JSC Rossiya; non-operating entity, in liquidation), 45.0% of JSC AeroMASh-AB (Aviation security), 2.43% of JSC Sheremetyevo International Airport (base airport), 3.85% of PJSC Transport Clearing House (mutual settlements between agencies and airlines). JSC Orenair was liquidated in July 2019.
Over the past years the Group structure was refined with a focus on aviation assets and disposal of non-core assets,
which is in compliance with the Group's strategy to streamline the core business.
A-Technics
Maintenance 100%
40
Aeroflot Group Structure
Address: 119002, Russia, Moscow, Arbat St. 10
E-mail: [email protected]
Website: www.aeroflot.ru
Investor Relations Contacts