ICELANDAIR GROUP PRESENTATION OF Q3 2015 RESULTS 30 OCTOBER 2015
Highlights Q3 2015 1 2 3 Record EBITDA USD 150.9 million improving by USD 27.0 million from 2014 Higher passenger revenue and lower fuel price reasons for the good results EBITDA guidance for 2015 raised to 210-215 USD million 2
FINANCIAL RESULTS BOGI NILS BOGASON ǀ CFO
USD stronger against other currencies in Q3 2015 compared to Q3 2014-7% -11% -16% -17% -16% -18% -24% ISK EUR GBP CAD DKK NOK SEK Change in main currencies against the USD; Q315 vs Q314 4
The weight of USD increases in revenues Operating income Operating expenses Q3 2015 Q3 2014 Q3 2015 Q3 2014 43% 54% 52% 36% 19% 17% 25% 24% 28% 27% 10% 15% 14% 6% 5% 5% 5% 7% 1% 1% 2% 2% 2% 2% ISK USD CAD EUR GBP Other* ISK USD CAD EUR GBP Other* Other* mainly the Scandinavian currencies 5
Profit in Q3 up by 20% compared to last year USD million Q3 2015 Q3 2014 % Chg. Operating Income 429.4 418.7 3% Salaries and related expenses 74.6 69.8 7% Aircraft fuel 76.8 95.8-20% Aircraft lease 5.9 5.7 3% EBITDA and net profit USD million EBITDA Net Profit 151 Aircraft handling, landing and comm. 31.7 29.4 8% Aircraft maintenance 13.6 21.6-37% Other expenses 75.9 72.6 5% 124 EBITDA 150.9 123.9-102 103 EBIT 127.0 102.5 - EBT 130.8 106.2 - Profit for the period 103.1 85.8-71 78 65 86 EBITDA ratio 35.1% 29.6% 5.5 ppt EBITDAR 159.9 134.5 - EBITDAR ratio 37.2% 32.1% 5.1 ppt 44 51 Q311 Q312 Q313 Q314 Q315 6
Growth in all our businesses in Q3 Year-on-year change in % 18 20 15 13 8 3 3 4 4 3 5 1-2 Passengers Route Network ASK Route Network SLF (ppt) Route Network Passengers Regional and Greenland flights ASK Regional and Greenland flights SLF (ppt) Regional and Greenland flights Fleet utilisation Charter flights Sold BH Charter flights ATK Cargo FTK Cargo Available HRN Hotels Sold HRN Hotels Utilisation (ppt) HRN Hotels 7
Over 1.1 million passengers carried in Q3 2015, an 18% increase compared to Q3 2014 +70% 1,144 969 34% 746 821 34% 671 36% 10% 38% 37% 11% 12% 13% 17% 45% 50% 52% 55% 56% Q311 Q312 Q313 Q314 Q315 To From Via Absolute figures in thousands. 8
Record load factor of 87.3% in Q3 2015 on top of double digit capacity increase Available seat kilometers (ASK) in millions Passenger load factor +75% 3.9 ppt 4.0 87.3% 3.4 2.6 2.9 83.4% 84.0% 83.5% 84.2% 2.3 Q3 11 Q3 12 Q3 13 Q3 14 Q3 15 Q3 11 Q3 12 Q3 13 Q3 14 Q3 15 9
EBITDA USD 199 million year to date with EBITDA ratio improving by 4.7 ppt between years USD million 9M 2015 9M 2014 % Chg. Operating Income 909.7 907.8 0% Salaries and related expenses 203.1 208.0-2% EBITDA and net profit USD million EBITDA Net Profit Aircraft fuel 187.6 218.4-14% Aircraft lease 18.0 18.8-4% 199 Aircraft handling, landing and comm. 68.4 66.0 4% Aircraft maintenance 51.6 59.5-13% Other expenses 182.2 181.4 0% EBITDA 198.9 155.8-137 156 EBIT 136.1 97.8 - EBT 140.4 97.6 - Profit/loss for the period 111.0 81.5-86 104 81 111 66 EBITDA ratio 21.9% 17.2% 4.7 ppt EBITDAR 225.3 186.3-38 52 EBITDAR ratio 24.8% 20.5% 4.2 ppt 9M11 9M12 9M13 9M14 9M15 10
Effective fuel price paid in Q3 2015 37% higher than the average world fuel price 1,000 950 900 850 800 750 700 650 600 550 +37% 500 450 50 0 01.14 02.14 03.14 04.14 05.14 06.14 07.14 08.14 09.14 10.14 11.14 12.14 01.15 02.15 03.15 04.15 05.15 06.15 07.15 08.15 09.15 Average World Market Price Effective Price Figures: USD/ton. 11
51% of estimated fuel usage has been hedged in the next 12 months Period Estimated usage (tons) Option volume Swap volume Total swap and option contracts %hedged Av. Swap Bought call price USD strike Sold put strike Oct 15 24.181 4.000 9.570 13.570 56% 662 960 859 Nov 15 20.109 0 10.640 10.640 53% 658 900 831 Dec 15 19.092 0 11.620 11.620 61% 596 0 0 Jan 16 19.252 0 10.460 10.460 54% 608 0 0 Feb 16 17.527 0 10.410 10.410 59% 642 0 0 Mar 16 21.076 0 10.390 10.390 49% 615 0 0 Apr 16 22.062 0 12.430 12.430 56% 618 0 0 May 16 33.523 0 19.420 19.420 58% 646 0 0 Jun 16 40.463 0 23.400 23.400 58% 639 0 0 Jul 16 42.370 0 20.400 20.400 48% 599 0 0 Aug 16 42.390 0 21.300 21.300 50% 535 0 0 Sep 16 36.851 0 9.300 9.300 25% 554 0 0 Total 338.896 4.000 169.340 173.340 51% - - - Q4 2015 Q1 2016 Q2 2016 Q3 2016 12M 2015-2016 57% 54% 58% 42% 51% 12
Cash and cash equivalents amounting to USD 256.6 million at the end of September 2015 Cashflow overview 9 months Cashflow overview Q3 months 208.5 210.8 60.3 132.4 38.4 86.3 85.7 3.7 5.8 4.1 2.9 3.6 Net cash from operating activities Net cash used in investing actiities Net cash used in financing activities Net cash from operating activities Net cash used in investing actiities Net cash used in financing activities 9M 2015 9M 2014 Q3 2015 Q3 2014-2% 13
Balance sheet remains strong with 46% equity ratio and low interest bearing debt USD million Assets 30.09 2015 30.09 2014 31.12 2014 Operating Assets 353.1 297.6 319.3 Intangible assets 173.8 176.9 176.0 Other non-current assets 45.1 19.1 18.9 Total non-current assets 572.0 493.7 514.2 Other current-assets 158.5 128.9 119.4 Marketable securities 28.5 27.1 30.9 Cash and cash equivalents 256.6 227.6 184.8 Total current assets 443.5 383.6 335.0 Total assets 1,015.5 877.2 849.2 USD million Equity and liabilities 30.09 2015 30.09 2014 31.12 2014 Stockholders equity 471.6 403.6 365.1 Loans and borrowings non-current 63.7 43.0 49.7 Other non-current liabilities 67.6 59.0 33.0 Total non-current liabilites 131.3 102.0 82.6 Loans and borrowings current 12.5 12.5 12.3 Trade and other payables 220.1 202.5 214.3 Deferred income 179.9 156.7 174.9 Total current liabilites 412.5 371.6 401.5 Total equity and liabilities 1,015.5 877.2 849.2 Equity ratio 46% 46% 43% Current ratio 1.08 1.03 0.83 Net interest bearing debt -208.8-199.2-153.7 Interest bearing debt 76.2 55.5 61.9 14
OUTLOOK BJÖRGÓLFUR JÓHANNSSON ǀ PRESIDENT AND CEO
42 destinations & 410 connections in our Route Network in 2016 16
18% increase in capacity in 2016 and 14% increase in the number of trips Change in capacity* 2016 vs forecast 2015 Change in number of trips 2016 vs forecast 2015 8% 18% 3% 14% 7% 6% 4% 4% New destinations Increased capacity EUR Increased capacity NA Total capacity increase New destinations Increased number of trips EUR Increased number of trips NA Total increase in number of trips * Capacity = Available Seat Kilometers (ASK) 17
Changes in the fleet strategy in our Route Network in 2016 onwards Two B767 added to the fleet in 2016 B737 MAX added to the fleet in 2018 6 26 14 16 18 21 24 2 3 3 5 3 The total number of confirmed order for B737 MAX is 16 until 2021 12 24 2 3 1 2 1 2010 2011 2012 2013 2014 2015 2016 2018 2019 2020 2021 B767 B757 B737 MAX 9 B737 MAX 8 18
New fleet and new destination in our regional airline operations Route map Regional airline operations Kangerlussuaq in west Greenland a new destination summer 2016 Three Bombardier Q400 aircraft will replace five Fokker-50 aircraft in 2016 19
Continued growth in our hotel operation 2016 Opening in cooperation with Hilton Worldwide 115 rooms 2017 Opening of a lifestyle boutique hotel downtown Reykjavik 50 rooms 2017 Opening of a luxury hotel downtown Reykjavik 160 rooms 2015-2017 Build-up of a Hotel at Mývatn in the North of Iceland 20
Robust outlook for other businesses 21
EBITDA guidance for 2015 raised to USD 210-215 million EBITDA development 2011-2015 in USD million 210-215 Main assumptions: Ι Successful operations in the first nine months of the year 144 154 Ι Strengthening booking status in the international Route Network in Q4 85 110 Ι Ι Outlook in other businesses of the Company is good EUR/USD rate assumed 1.12 Q4 2015, an increase from last forecast in July which was 1.10 Ι Average fuel price (excluding hedging) 490 USD/ton in October, 480 USD/ton in November and 550 USD/ton in December 2011 2012 2013 2014 Guidance 2015 22
ICELANDAIR GROUP Reykjavík Airport 101 Reykjavík Iceland Tel: +354 50 50 300 Fax: +354 50 50 389 Copyright Icelandair Group All rights reserved