SHAREHOLDERS MEETING MAY 15, 2018

Transcription

1 SHAREHOLDERS MEETING MAY 15, 2018

2 OPENING PARIS

3 PRESENTATION OF THE RESOLUTIONS

4 RESOLUTIONS SUBMITTED TO THE SHAREHOLDERS MEETING - ORDINARY BUSINESS 1 st resolution: Approval of the statutory financial statements and transactions for the financial year ended December 31, nd resolution: Approval of the consolidated financial statements and transactions for the financial year ended December 31, rd resolution: Allocation of the income (or loss) for the financial year ended December 31, th resolution: Ratification of the co-opting of Ms. Anne-Marie Idrac as a Board director 5 th resolution: Re-appointment of Ms. Isabelle Parize as a Board director for a four-year term 6 th resolution: Appointment of Mr. François Robardet as a Board director representing the employee shareholders (ground staff and cabin crew employee shareholders) for a four-year term 7 th resolution: Appointment of Mr. Paul Farges as a Board director representing the employee shareholders (flight deck crew employee shareholders) for a four-year term 8 th resolution: Vote on the elements of compensation paid or granted to Mr. Jean-Marc Janaillac in respect of the 2017 financial year, in his capacity as Chairman and Chief Executive Officer 9 th resolution: Approval of the elements of the compensation policy for the Chairman and Chief Executive Officer 10 th resolution: Setting of the amount of directors fees 11 th resolution: Authorization to be granted to the Board of Directors to carry out transactions involving the Company s shares S H A R E H O L D E R S M E E T I N G M A Y 1 5,

5 RESOLUTIONS SUBMITTED TO THE SHAREHOLDERS MEETING - EXTRAORDINARY BUSINESS 12 th resolution: Increase in the total nominal cap amount foreseen in the 12th resolution of the Shareholders Meeting of May 16, 2017 to set this cap amount at 214 million (i.e., given the amount already used, an available cap of around 139 million) 13 th resolution: Delegation of authority to be granted to the Board of Directors for a 14-month period, to carry out capital increases reserved to members of a company or Group savings scheme without shareholders preferential subscription rights within a limit of 2% of the share capital 14 th resolution: Powers to accomplish formalities S H A R E H O L D E R S M E E T I N G M A Y 1 5,

6 2017 FINANCIAL RESULTS DUBROVNIK

7 2017: STRONG OPERATING RESULT Revenues ( bn) EBITDA ( bn) Operating result ( m) 1,488 1,049 Net result, group share ( m) Operating free cash flow ( m) Net debt ( bn) S H A R E H O L D E R S M E E T I N G M A Y 1 5,

8 STRENGTHENING OF THE FINANCIAL STRUCTURE LEASE ADJUSTED OPERATING RESULT OPERATING CASH FLOW DEBT / EBITDAR bn bn dec 2011 dec 2012 dec 2013 dec 2014 dec 2015 dec 2016 dec 2017 Strike adjusted S H A R E H O L D E R S M E E T I N G M A Y 1 5,

9 IMPROVED OPERATING RESULT DRIVEN BY UNIT REVENUE PERFORMANCE In m ,488 1, Others Unit Fuel price revenue ex-currency Currency impact 2017 S H A R E H O L D E R S M E E T I N G M A Y 1 5,

10 DECREASE IN UNIT COST EXCLUDING PROFIT SHARING AND LOAD FACTOR EFFECTS UNIT COST EVOLUTION +0.3% -0.3% -0.2% -0.8% -1.0% Reported change Change ex-currency and fuel price Load factor effect Profit sharing effect Adjusted change S H A R E H O L D E R S M E E T I N G M A Y 1 5,

11 NETWORK: GROWTH IN TRAFFIC AND UNIT REVENUE ACTIVITY 86.8% 85.4% +2.6% +4.3% Capacity Traffic Load factor Revenues: bn, up 3.4% Operating income increasing by 379 m UNIT REVENUE EVOLUTION AT CONSTANT CURRENCY Premium Classes Economy Class Total 8.4% 9.0% 5.1% 5.2% 3.7% 3.7% 2.7% 1.2% 1.5% 2.1% -1.7% -0.5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q million Passengers in 2017 Employees: 54,000 Aircraft in operation: 471 S H A R E H O L D E R S M E E T I N G M A Y 1 5,

12 NETWORK: CARGO TURNAROUND CONFIRMATION ACTIVITY 59.3% 59.9% 1.14 million Tons Cargo in % +1.8% Capacity Traffic Load factor Employees: 4,300 6 full freighters in operation Full Freighter activity shows improved performance Traffic and Unit Revenue up > Market demand growth to and from Asia and Latin America S H A R E H O L D E R S M E E T I N G M A Y 1 5,

13 TRANSAVIA ACCELERATED GROWTH ACTIVITY PASSENGERS 89.2% +10.5% 90.6% In millions % million Passengers in 2017 Employees: 2, % Revenues: 1.4 bn Capacity Traffic Load factor Unit revenue rise (+6.8%) More than 100 Transavia destinations Operating result: 81 m Low cost n 1 in the Netherlands and Paris-Orly S H A R E H O L D E R S M E E T I N G M A Y 1 5,

14 A WORLD LEADER IN MAINTENANCE THIRD PARTY REVENUE AND OPERATING RESULT In m 1, ,225 1, , ,834 1, ORDER BOOK Slight margin pressure, due to strong competitive landscape in the Component activity In $bn % % Dec Dec Dec 2017 World leader Employees: 13, industrial sites 450 engine shop visits per year 1,300 aircraft under component support contracts Revenues: 4.2 bn Operating result: 215 m Further increase in order book > New Component contracts on new-generation aircraft > New Engine deals S H A R E H O L D E R S M E E T I N G M A Y 1 5,

15 HIGHLIGHTS OF THE FIRST QUARTER 2018 Fairly positive business environment in line with expectations : > 22 million passengers carried, up 5.2% > load factor at 87.1%, improvement by 1.7pt First quarter operating income (1) at -118 million euros, a decrease of 85 million euros compared to last year: > Air France strike impact > improvement of KLM and Transavia performance (1) Since January 1, 2018, implementation of new accounting standards of IFRS 9, 15 and 16. S H A R E H O L D E R S M E E T I N G M A Y 1 5,

16 AIR FRANCE-KLM SHARE PRICE BASE 100 AT 1 ST of JANUARY May % +14% +8% Air France-KLM CAC40 Stoxx Europe 600 Travel & Leisure S H A R E H O L D E R S M E E T I N G M A Y 1 5,

17 AN ACTIVE COMMUNICATION TOWARDS INDIVIDUAL SHAREHOLDERS Shareholders letters available on internet Individual shareholders Club and Committe Shareholders meetings in the French regions A multiple award-winning communication in 2017: December 2017 July 2017 Award of the best SBF 120 digital communication assigned by Le Revenu magazine Award of the SBF 80 Grand Prix for the Annual General Meeting 2017 assigned by l Institut du Capitalisme Responsable S H A R E H O L D E R S M E E T I N G M A Y 1 5,

18 TRUST TOGETHER ACHIEVEMENTS AND CHALLENGES FOR AF KLM CHINESE TAIPEI

19 STATUTORY AUDITORS REPORT AJACCIO

20 STATUTORY AUDITORS REPORTS As regards the Ordinary Shareholders Meeting > Reports on the financial statements Consolidated financial statements Annual financial statements > Report on regulated agreements and commitments As regards the Extraordinary Shareholders Meeting > 2 reports related to capital operations S H A R E H O L D E R S M E E T I N G M A Y 1 5,

21 REPORTS ON THE FINANCIAL STATEMENTS Consolidated financial statements (pages 287 to 292 of the 2017 Registration Document) Annual financial statements (pages 307 to 309 of the 2017 Registration Document) Unqualified opinion on the fair presentation and consistency of the financial statements (consolidated and annual financial statements) Key audit matters: > Revenue recognition for issued but unused passenger tickets > Measurement of retirement and other long-term benefits > Recognition of deferred tax assets > Provisions for litigations and contingent liabilities (consolidated and annual financial statements) > Valuation of equity interests (annual financial statements) Specific verifications > No observations on the information given in the management report and consistency of the information S H A R E H O L D E R S M E E T I N G M A Y 1 5,

22 SPECIAL REPORT On regulated agreements and commitments (page 310 of the 2017 Registration Document) Authorization during the year and since the closing > No new agreement or commitment authorized during the year Approval in prior years > No agreement or commitment authorized in prior years that remained in force during the year S H A R E H O L D E R S M E E T I N G M A Y 1 5,

23 REPORTS IN RELATION WITH THE EXTRAORDINARY SHAREHOLDERS MEETING (1/2) On the amendment to the maximum nominal amount of share capital increases (12 th Resolution) Purpose > Proposed amendment to the maximum nominal amount of share capital increases likely to be carried out, immediately or in the future, from 150 million to 214 million, under the delegation of authority voted by the Combined Shareholders Meeting of May 16, 2017 Procedures performed by the Statutory Auditors > Verification of the content of the Board of Directors report related to this operation Conclusion > No comments to make on the proposed amendment to the maximum nominal amount S H A R E H O L D E R S M E E T I N G M A Y 1 5,

24 REPORTS IN RELATION WITH THE EXTRAORDINARY SHAREHOLDERS MEETING (2/2) On the issuance of new shares or other securities granting rights to the share capital reserved for members of a company savings plan (13 th Resolution) Purpose > Delegation of authority to proceed with increases in the share capital for a 14-month period and limited to 2% of the Company s share capital > Opinion on the fairness of the quantitative information, on the proposed cancellation of preferential subscription rights and on other information Procedures performed by the Statutory Auditors > Verification of the content of the Board of Directors report related to this operation and of methods used to determine the issue price of equity securities Conclusion > Subject to subsequent review of the conditions of each equity issuance decided, no comments to make on the methods used to determine the issue price of equity securities > No opinion on the price and on the proposed cancellation of preferential subscription rights > Additional report, where appropriate, when this delegation is used S H A R E H O L D E R S M E E T I N G M A Y 1 5,

25 GOVERNANCE AMSTERDAM

26 CURRENT COMPOSITION OF THE BOARD OF DIRECTORS Jean-Marc JANAILLAC Maryse AULAGNON* Karim BELABBAS Leni BOEREN* Isabelle BOUILLOT* Mathi BOUTS Jean-Dominique COMOLLI Anne-Marie COUDERC* DELTA AIR LINES, INC. Represented by George MATTSON Jaap DE HOOP SCHEFFER* Anne-Marie IDRAC* Louis JOBARD Solenne LEPAGE Isabelle PARIZE* François ROBARDET Hans N. J. SMITS Bing TANG Patrick VIEU Alexander R. WYNAENDTS* Changes in the composition of the Board > October 3, 2017 : Delta Air Lines and China Eastern Airlines join the Board of Directors > October 10, 2017 : appointment of a second Board director representing the employees > November 2, 2017 : appointment of a woman independent Board director * Including 8 independant Board directors as defined by the AFEP-MEDEF Code. A S S E M B L É E G É N É R A L E 1 5 M A I

27 BALANCES WITHIN THE BOARD A Board of Directors composed of 19 Board directors: Shareholders representatives: L État français, Delta Air Lines Inc., China Eastern Airlines 4 nationalities: French, Dutch, US, Chinese 41,2 % women 2 representatives of the employee shareholders and 2 representatives of the employees 53 % independent Board directors Robust competencies at the service of the business: Industry, Service, Transport, Air Transportation,Tourism, Finance, General Management, Governance, International A S S E M B L É E G É N É R A L E 1 5 M A I

28 MAIN MATTERS REVIEWED DURING THE 2017 FINANCIAL YEAR 11 meetings in 2017 (attendance rate: 90%) 2017 Highlights The Board of Directors focused in particular on the following matters: MAY JUNE 2017 Shareholders Meeting Joint-meeting of the Air France KLM and Delta Air Lines, inc. Board of Directors > Monitoring of the Trust Together strategic project > Update on flight safety > Reinforcement of the partnerships with (i) and and (ii) SEPTEMBER OCTOBER Shareholders Meeting authorizing the entry of Delta Air Lines and China Eastern Airlines into the share capital 2-day seminar devoted to the Group s strategy Since the beginning of 2018 > Unveiling of the new airline > Partnership with MARCH MAY Debate on the conclusions of the evaluation of the Board 2018 Shareholders Meeting S H A R E H O L D E R S M E E T I N G M A Y

29 CURRENT COMPOSITION OF THE BOARD S COMMITTEES 100% of the Committees chaired by independent Board directors Audit Committee Remuneration Committee Appointments and governance Committee Maryse AULAGNON (Chair) Leni M.T. BOEREN Solenne LEPAGE Anne-Marie COUDERC François ROBARDET Louis JOBARD Jaap DE HOOP SCHEFFER (Chair) Isabelle BOUILLOT Jean-Dominique COMOLLI Hans SMITS Isabelle PARIZE François ROBARDET Anne-Marie COUDERC (Chair) Jean-Dominique COMOLLI Alexander R. WYNAENDTS 5 meetings in 2017 (attendance rate: 93%) 3 meetings in 2017 (attendance rate: 89%) 7 meetings in 2017 (attendance rate: 100%) S H A R E H O L D E R S M E E T I N G M A Y 1 5,

30 MR. MATHI BOUTS, BOARD DIRECTOR REPRESENTING THE EMPLOYEES BOARD DIRECTOR REPRESENTING THE EMPLOYEES Senior Purser on KLM long-haul flights Chair of the Dutch Foundation MNO (stichting MultiNationale Ondernemingsradenoverleg), a network of works councils in multinationals Appointed by Air France-KLM s European Works Council on October 10, 2017 as a Board director representing the employees S H A R E H O L D E R S M E E T I N G M A Y 1 5,

31 RATIFICATION OF THE CO-OPTING OF MS. ANNE-MARIE IDRAC AS A BOARD DIRECTOR (RESOLUTION 4) INDEPENDENT BOARD DIRECTOR Member of the Board of Directors of Bouygues* Member of the Board of Directors of Saint-Gobain* Member of the Board of Directors of Total* President of the Aéroport de Toulouse-Blagnac Supervisory Board (mandate expiring in May 2018) Company Board director * Listed company. S H A R E H O L D E R S M E E T I N G M A Y 1 5,

32 RE-APPOINTMENT OF ISABELLE PARIZE AS A BOARD DIRECTOR (RESOLUTION 5) INDEPENDENT BOARD DIRECTOR Member of the Remuneration Committee of Air France-KLM Member of the Board of Directors of Auchan Associate of Odys SPRL, Belgium Counsel to companies, start-ups and private equity funds S H A R E H O L D E R S M E E T I N G M A Y 1 5,

33 APPOINTMENT OF MR. FRANÇOIS ROBARDET AS A BOARD DIRECTOR REPRESENTING THE EMPLOYEE SHAREHOLDERS FOR A 4-YEAR TERM (RESOLUTION 6) BOARD DIRECTOR REPRESENTING THE EMPLOYEE SHAREHOLDERS (GROUND STAFF AND CABIN CREW SHAREHOLDER CATEGORY) Air France executive Titular member (elected) of the Supervisory Board of the Aeropelican employee shareholder FCPE Titular member (elected) of the Supervisory Board of the Horizon- Épargne Actions diversified savings fund Manager of SCI Arcole 3 S H A R E H O L D E R S M E E T I N G M A Y 1 5,

34 APPOINTMENT OF MR. PAUL FARGES AS A BOARD DIRECTOR REPRESENTING THE EMPLOYEE SHAREHOLDERS FOR A 4-YEAR TERM (RESOLUTION 7) BOARD DIRECTOR REPRESENTING THE EMPLOYEE SHAREHOLDERS (FLIGHT DECK CREW SHAREHOLDER CATEGORY) Air France airline pilot instructor A320 Flight Captain from 2007 to 2017 Pilot Officer on the B-737 until 2001, then on the B-747 from 2001 to 2007 S H A R E H O L D E R S M E E T I N G M A Y 1 5,

35 ELEMENTS OF THE 2017 COMPENSATION FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER (RESOLUTION 8) 2017 FIXED 600,000 > Unchanged since VARIABLE 510,000 Quantitative performance COI (Current Operating Income) Adjusted net debt Qualitative performance New strategic plan and reduction in unit costs Success of the new alliances Efficiency of governance Achieved (87%) 48% 10% 11% 10% 8% Target (80%) 40% 8% 16% 8% 8% Maximum (100%) 50% 10% 20% 10% 10% > Mr. Janaillac waived a portion of his variable compensation for 2017 > Performance criteria aligned with the strategy S H A R E H O L D E R S M E E T I N G M A Y 1 5,

36 ELEMENTS OF THE 2018 COMPENSATION POLICY FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER (RESOLUTION 9) (1/3) Elements composing the compensation of the Chairman and Chief Executive Officer 2018 FIXED 600, VARIABLE Annual Variable Long-term Incentive OVERALL 2018 CEILING 1,200,000 > Overall ceiling identical to 2017 > Unchanged fixed compensation for the last 8 years > Pro rata temporis compensation > No other commitments with respect to the Chairman and Chief Executive Officer, in particular no non-compete clause or severance payment in the event of departure S H A R E H O L D E R S M E E T I N G M A Y 1 5,

37 ELEMENTS OF THE 2018 COMPENSATION POLICY FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER (RESOLUTION 9) (2/3) Target (70%) Maximum (100%) Quantitative performance COI (Current Operating Income) 2018 VARIABLE Annual variable (annual) Adjusted net debt Qualitative performance New strategic plan and reduction in unit costs Success of the new alliances Efficiency of governance 35% 7% 12% 6% 10% 50% 10% 17% 9% 14% > Performance criteria aligned with the strategy > Target amount: 70% of the fixed compensation > Maximum amount : 100% of the fixed compensation S H A R E H O L D E R S M E E T I N G M A Y 1 5,

38 ELEMENTS OF THE 2018 COMPENSATION POLICY FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER (RESOLUTION 9) (3/3) TSR on AFKLM shares vs. the weighted TSR on the shares of other sector companies (1) 2018 VARIABLE Long-term incentive Actual AFKLM ROCE vs. Budget (2) Dow Jones Sustainability Index Environmental commitments and CSR performance targets (3) 30% 40% 15% 15% > Granting of phantom shares is subject to a presence condition and to performance criteria over a three-year vesting period > Maximum amount: 10% of the fixed compensation, i.e. 60,000 (1) Defined as the performance of the Air France-KLM share price in any financial year relative to the performance of the sector: Lufthansa (40%), IAG (35%), Ryanair (12.5%), Easyjet (12.5%). (2) Calculation based on absolute ROCE. The same correction for fuel will be applied as stated under the collective short-term incentive target. (3) The evaluation of the criterion will be over a three-year period based on indicators reviewed annually by the Board of Directors. S H A R E H O L D E R S M E E T I N G M A Y 1 5,

39 ELEMENTS OF THE 2018 COMPENSATION POLICY FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER (RESOLUTION 9) (1/3) Elements composing the compensation of the Chairman and Chief Executive Officer 2018 FIXED 600, VARIABLE Annual Variable Long-term Incentive OVERALL 2018 CEILING 1,200,000 > Overall ceiling identical to 2017 > Unchanged fixed compensation for the last 8 years > Pro rata temporis compensation > No other commitments with respect to the Chairman and Chief Executive Officer, in particular no non-compete clause or severance payment in the event of departure S H A R E H O L D E R S M E E T I N G M A Y 1 5,

40 SHAREHOLDERS MEETING MAY 15, 2018