2015 Annual Results. Under IFRS

Transcription

1 2015 Annual Results Under IFRS

2 Disclaimer Financial data included in this presentation is prepared under IFRS. Unless otherwise specified, the unit for cost and income is RMB million. Regions or Regional used herein refers to Hong Kong, Macau and Taiwan. Transportation revenue mentioned herein includes income from cooperational routes. This presentation contains certain forward-looking forecast and outlook. These opinions are based on certain assumptions, which are subject to change. The actual results may deviate materially from the forecast. 2

3 1.Industry Circumstances & Results Overview

4 Industry Circumstances in 2015 Favorable Factors Unfavorable Factors Increase in domestic purchasing power promoted consumption structure upgrading Paid holiday and VISA policies spurred overseas travelling National strategies created favorable industry environment Regulatory policy relaxation broadened industry development space Mobile internet technique enhanced sales ability and reduced agency costs Uneven growth of global economy, slowdown in domestic economic growth Exchange rate fluctuation caused considerable exchange loss MERS and other incidents affected air travel demand Competition intensified in certain markets leaded profit decline Sluggish cargo business demand Oil price remained at low level 4

5 Results Overview Data Overview YoY Total turnover 99,244 93, % Total turnover(excluding surcharge) 92,290 80, % Operating profit 12,625 6, % Gross profit margin 12.7% 6.5% 6.3pt EBITDAR 28,314 20, % Exchange loss 4, % Net profit (attributable to shareholders ) Net profit (attributable to shareholders, excluding exchange) 4,537 3,410 33% 9,524 3, % Number of aircraft ATK (Million) 25,203 22, % Passenger Load Factor 80.5% 79.6% 1.0pt Daily utilization rate (hours) % Employees per aircraft % Cost per ATK (RMB Yuan, excluding fuel, same caliber*) % *Same caliber refers to restoring the post-retirement welfare policy adjustment in

6 2.Market Performance

7 Passenger Business Capacity Breakdown Regional 3.0% Trend of PLF and Unit Revenue (fuel surcharges excluded) % 30.4% International Domestic % 66.6% % PLF RRPK RASK Revenue Breakdown 30.0% International 3.9% Regional 66.1% YoY Changes of Major Passenger Business Indicators 14.6% 13.2% 4.8% 1pt -0.8% -8.4% Domestic ASK PLF RPK RRPK (fuel RRPK (fuel Revenue excluded) included) (fuel included) 7

8 Domestic Passenger Business Capacity Breakdown Regional 3.0% Hongqiao, 12.4% Pudong, 9.2% Hongqiao Pudong 30.4% International 66.6% Domestic Others, 57.3% Beijing, 10.8% Kunming, 6.7% Xi'an, 3.5% Beijing Kunming Xi'an Others Overall domestic demand exceeded expectation; private demand outperformed business demand Spring Festival rush and summer peak season results broke historical record Acquired 389 new takeoff and landing slot in four core markets Optimizing hub and core market network opened 67 new routes and increased flight frequencies in 102 routes 9.6% YoY Changes of Domestic Passenger Business Indicators 1.3pt 11.5% 1.1% excluded) -9.9% included) 0.5% ASK PLF RPK RRPK (fuel RRPK (fuel Revenue (fuel included) 8

9 International Passenger Business Capacity Breakdown North America 15.3% 6.8% 15.7% Europe 66.6% 30.4% Domestic International 22.5% Austratlia Southeast Asia Regional 30.6% 9.1% Japan 3.0% Korea Added capacity in international routes; supply and demand maintained balanced YoY Changes of International Passenger Business Indicators Intensified competition in certain markets leads yield decline 24.3% 24.6% 18.3% Newly introduced B773 and A330 covered North America and Europe route marginally enhanced international competitiveness Deepened joint venture and cooperation improved premium classes operating ability and overall long-range route results 0.2pt -3.9% -4.9% ASK PLF RPK RRPK (fuel RRPK (fuel excluded) included) Revenue (fuel included) 9

10 Regional Passenger Business Capacity Breakdown 30.4% International 3.0% Regional Taiwan, 40.8% Hong Kong, 50.2% 66.6% Domestic Macau, 9.0% Overall performance of regional market is weak; Capacity reduced according to market ; yield maintained flat YoY Changes in Regional Passenger Business Indicators 0.2pt Breakdown: Hong Kong capacity was reduced, fare price kept stable Taiwan capacity flat, yield declined Macau capacity and yield both increased -0.5% -4.3% -4.1% -4.4% ASK PLF RPK RRPK (fuel RRPK (fuel excluded) included) -8.3% Revenue (fuel included) 10

11 Cargo Business Revenue Proportion Revenue Breakdown Passenger Passenger Business 92.6% Cargo Business 7.4% Freight 59.9% Aircraft Belly 40.1% Demand of cargo market remained weak; Continued to phase out freighters, capacity growth mainly came from passenger aircraft belly; Promoted business transformation; advanced into high-end logistics; built fast supply chain platform; Overall results of logistics and cargo business improved YoY Changes of Major Cargo Business Indicators 9.3% 1.3% -0.1% -4.4pt -13.7% -12.5% AFTK FLF RFTK RRFTK (fuel RRFTK (fuel Revenue excluded) included) (fuel included) 11

12 3.Operation Highlights Continuously optimizing fleet structure Consolidating hub network and market shares Remarkable improvement in key operating indicators Steadily promoting LCC transformation Introducing strategic investor & expanding cooperation IT reform leading innovative development Improving customer experience and brand images

13 Continuous Optimizing Fleet Structure Fleet Passenger Aircraft End of End of In Out B ER A330 Series B737 Series A320 Series A B B Regional Aircraft Freighters Total B A330 Series B737 Series A320 Series Major models accounted for 96.1% Optimized the match of aircraft, market and routes Long-haul routes to North America To Europe, Australia and for trunk routes Medium-and short-haul routes Reduced operating costs and enhanced operating efficiency * The fleet above does not include 16 business aircraft operated under entrustment 13

14 Consolidating Hub Network and Market Shares Consolidating market position in core markets In 2015, by actively acquired newly Top 10 Markets in terms of air passenger volumes Rank Airport CEA Market Share available slot resources in Shanghai Pudong, Xi an and 1 Shanghai Market 40.3% Beijing Xi an Shanghai Kunming, we maintained our first place in market shares in these three core markets. Enhance transit 2 Beijing Market 18.0% 3 Guangzhou 11.2% 4 Chengdu 12.9% 5 Shenzhen 8.8% Kunming connectivity Through promoting all-network 6 Kunming 36.9% access, optimizing flight 7 Xi an 30.0% connectivity, enhancing sales of connecting flights, transit opportunities in Pudong, Kunming 8 Chongqing 9.3% 9 Hangzhou 10.8% and Xi an increased 26.5%, 12.4% 10 Xiamen 10.9% and 21.3% YoY respectively. 14

15 Remarkable improvement in key operating indicators 37% Direct Sales Revenue Optimized official website and App, increased overseas payment completion ratio Diversified internet direct sales strategies and products, highest daily sales exceeded RMB120 million Direct sales revenue increased by 66%, accounting 37% of the total revenue Frequent Flyer Improved members 'experience by introducing E-card, diversifying members admission channels and optimizing credit redemption Number of frequent flyers improved 16% to 26.4 million; returned passenger rate increased by 2.7% 47% Value-Added Services Revenue Introduced Preferred Seats, covering 12 major long-haul international routes Deepened multimodal combined transportation, expanded cooperation with railways and long-distance buses Further Developed tickets-packaged products, transit and city-tour products Passenger transformation service revenue increased by 47% Group Clients Focused on the top 500 enterprises; global clients expanded to 55 Enhanced cooperation with international TMCs, developed 385 group clients in total Two-party group clients increased by 48% to

16 Steadily Promoting LCC Transformation LCC transformation of China United Airlines Direct sales launched brand-new optimized official website and mobile App ; introduced four types of tickets; direct sales proportion increased to 47%, saved sales commission of 120milion RMB Simplified Services Simplified service process under LCC mode; increased efficiency; promoted charged services of baggage check-in, on-board products, seat-selection and lounge; realized total non-flight income of more than RMB 40 million Modified cabin Completed cabin layout modification: available seats per aircraft increased by 10% 16

17 Introducing Strategic Investor & Expanding Cooperation Paris Joint Venture Code-Sharing High-end Customers Sharing Joint Venture Code-Sharing Customers sharing Cooperation in domestic routes Shanghai Sydney Equity Cooperation Issued 460 million H- shares to Delta at HKD7.49/share, total value of USD450 million. Atlanta Commercial Cooperation Slot Coordination Joint Sales Facility Sharing Personnel Exchange IT Application 17

18 IT Construction Leading Innovative Development Internal: create data link; increase efficiency Selfcheck-in In-flight WiFi IT coverage within company exceeded 95%, initially reaching world-class airlines level Operating control system saved 10% working hours of ground services Operating network real-time monitoring 2,000 flights per day ensuring safety operation Application of big data enhanced sales forecast and seat revenue management Maintenance Logistics Sales Flight Control Big Data Ground Service operation Cabin IT CEA Digital CEA Internet CEA Customer Connectivity External: focus on client touch point; increase experience Self-check-in rate reached 60%, leading domestic airlines 100% coverage of website, mobile phone and SMS check-in in domestic terminals More than 18 electronic channels for customers to access at all times Brand new on-board entertainment systems and on-board WiFi provided excellent inflight experience Launched world s first Air-ground connected cloud payment platform 18

19 Customer Experience and Brand Images Lounge Experience Upgraded Pudong High-end self-check-in zone; reconstructed flagship lounges in Pudong and Hongqiao airports; opened Sky-team exclusive lounge in HK Upgraded Mobile App Upgraded and redesigned CEA App in UI, function and use experience New Model and On-board WiFi Newly introduced B ER and A330 in North America and Europe routes provided lying-flat seats in first and business classes; provided on-board WiFi in North America and certain domestic routes Honors Awarded Top 30 most valuable Chinese brands brand value grew fastest of industry, "Best Chinese Airlines, Most Honorable Chinese Enterprise for 2014~2015, Golden Bauhinia s Award for "Best Innovative Listing Company and 2015 Best Innovative Business Model Award in China 19

20 4.Financial Highlights

21 Revenue Change 106, ,000 3, ,361 98,000 6,035 2,526 94,000 99,244 93,881 90, Domestic International Cargo(fuel Fuel Surcharges Others 2015 Passenger (fuel and Regional surcharges (excluding surcharges Passenger (fuel excluded) cooperational excluded) surcharges routes income) excluded) 21

22 Major Costs Cost Items YoY Aircraft fuel 20,312 30, % Wages, salaries and benefits 16,459 11, % -Wages, salaries and benefits (same caliber*) 16,459 14, % Take-off and landing charges 10,851 9, % Depreciation and amortization 10,471 9, % Indirect operating expenses 5,503 4, % Aircraft maintenance expenses 4,304 4, % Aircraft operating lease rentals 4,254 4, % Sales and marketing expenses 3,651 4, % Food and beverages 2,469 2, % Others 8,345 7, % Total operating expenses 86,619 87, % Total operating expenses (fuel excluded, same caliber) 66,307 60, % * Same caliber refers to restoring the post-retirement welfare policy adjustment in

23 Operating Profit Change 21,000 18,000 15,000 9,926-5,189 12,000-6,361-4,785 9,000 11,724 6,000-4,188 3,000 3,410 4, Revenue (fuel Fuel Fuel Wages, Exchange Others 2015 surcharges Surcharges salaries and excluded) benefit 23

24 Asset Structure and Cash Flow Assets and Liabilities Structure Change of Cash Flow Equity 20.2% Total Liabilities 79.8% Interest- Bearing Liabilities 75.4% Other Liabilities 24.6% Net cash inflow from operating activities 12,296 24,325 Equity Total Liabilities Interest-Bearing Liabilities Other Liabilities Interest-Bearing Liabilities Structure -27,800-24,033 Net cash inflow from investing activities RMB-denominated Liabilities 25% Foreign-currencydenominated Liabilities 75% USD-denomina ted Liabilities 97.7% Others 2.3% Net cash inflow from financing activities 11,083 11,112 RMB-denomin ated Liabilities Foreigncurrencydenominated Liabilities USD-denominated Liabilities Others 24

25 5. Future Prospects

26 Prospects - Investment Highlights External Factors Internal Factors Constant prosperity of industry Supply and demand generally in balance Fuel price expected to remain at low level Favorable industrial regulatory policies Regional advantage of Shanghai hub Shanghai Disneyland bringing long-term benefits Optimizing debt structure reduces exchange risks Optimizing fleet enhance operating efficiency Expanding direct sales and reducing agency commission saves distribution costs IT strategy increases competitiveness Constantly improving International routes operation Reformation and innovation stimulus vitality 26

27 Prospects - Capacity Fleet Plan Passenger Aircraft 2016 Plan 2017 Plan In Out In Out B ER 7-4 A330 Series Allocation of Increased Capacity in 2016 Domestic International Regional 0.3% 47.2% 52.5% B737 Series A320 Series B Regional Aircraft Freighters Total Capex (million) ,847 26,642 Capacity Growth in 2016 in Areas Total 12.7% Domestic 10.0% International 20.0% Regional 1.3% 27

28 Prospects: Optimize Asset and Liability Structure Tasks Methods Targets Optimizing Asset Structure; Reducing Asset-Liability Ratio Enhance earning ability; Asset-liability ratio expected to be reduced by 6% percent after complete of RMB15 billion A-share private offering Asset-Liability ratio lowered to 70% Adjust Liability Structure Reduce Exchange Risks Expand financing channels, enhance the Scale and portion of RMB financing ; adjust RMB and Foreign Currency structure in the interesting-bearing debt Proportion of USD-denominated debts out of total interest bearing debt had been reduced to around 50% by the end of 1Q of 2016 RMB debt and foreign-currency debt accounts for 50% respectively 28

29 New Routes in 2016 Shanghai Prague Opening Date: June 22, flights per week Shanghai St. Petersburg Opening Date: June 21, flights per week Shanghai Amsterdamm Opening Date: June 26, flights per week Shanghai - Chicago Opening Date: March 18, flights per week Shanghai - Madrid Opening Date: June 28, flights per week 29

30 WeiChat Official WeiChat CEA APP CUA APP Subscription Q&A IR Team Tel : ir@ceair.com