Corporate Presentation. Corporate Presentation December 2016

Transcription

1 Corporate Presentation Corporate Presentation December 2016 July 2017

2 Disclaimer The information in this presentation has been prepared by Spicejet Limited (the Company ) and has not been independently verified. No representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information presented or contained in these slides is current as of the date hereof and is subject to change without notice, and its accuracy is not guaranteed. Neither the Company, nor any of its advisers or representatives, nor any of their respective affiliates makes any undertaking to update any such information subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice. No consideration has been given to the particular objectives, financial situation or particular needs of any recipient. Neither the Company nor any of its advisors or representatives, nor any of their respective affiliates shall have any liability whatsoever (in negligence or otherwise) for any loss arising from the use of this presentation or its contents or otherwise arising in connection with this presentation. By assessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation is intended for financial institutions and professional investors only and is not intended for distribution or reproduction to, or use by, retail investors. This presentation is also not intended for distribution or reproduction to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. The information in this presentation is given in confidence, and reproduction of this presentation, in whole or in part, or disclosure of any of its contents, without prior consent of the Company, is prohibited. This presentation should be distributed and read in its entirety. This presentation remains the property of the Company and on request must be returned and any copies destroyed. This presentation is for information and convenient reference and does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of the Company nor should it, or any part of it, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This presentation does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any securities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended or an exemption from such registration. Please refer to the financial statements of the Company that have been filed with the stock exchanges and is available on the Company s website. This presentation is not intended to be fully inclusive and may not contain all of the information that you may consider material. This presentation contains historical information of the Company that should not be regarded as an indication of future performance or results. Certain statements in these slides may be considered forward-looking. These statements are based on management s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. By accepting any copy of this presentation, you agree to be bound by the foregoing limitations. 2

3 Table of Contents 1 Industry Snapshot 2 Spicejet: Fact Sheet 3 Corporate Strategy 4 Key Financials and Stock Price Performance 3

4 Table of Contents 1 Industry Snapshot 2 Spicejet: Fact Sheet 3 Corporate Strategy 4 Key Financials and Stock Price Performance 4

5 Indian Economy: Steady Growth Supported by Strong Fundamentals China India Indonesia Brazil Russia Japan Mexico Philippines Germany Turkey Thailand France Italy Colombia Spain Canada Malaysia Australia Norway Strong Economic Growth 7.8% Real GDP Growth Projection CY2016 CY2022E India retains its position as the fastest growing major economy of the world ahead of China in FY16 The Asian Development Bank expects Indian economy to grow at 7.4% in and 7.6% in % India China ASEAN-5 Sub-Saharan Africa Middle East & North Africa Source: IMF, World Economic Outlook, April % 3.5% 3.1% 2.3% Latin America & Caribbean World average of 3.7% 1.8% 1.8% European Union Advanced economies Continued Population Growth 2nd most populous country with 1.31 billion people growing at a CAGR of 1.3% 1,383 1,309 Population Growth 1 (CY2016 CY2022) 0.4% 1.3% 1.3% 0.7% (0.1% (0.4%) 1.0% 2.0% 0.2% 1.0% 0.1% 0.5% 0.4% 1.1% (0.1)% 1.2% 1.7% 1.7% 1.2% Source: IMF, World Economic Outlook, April 2017 Favourable Demographics From 2016 through 2025, the share of elite, affluent and aspirers households will increase from 23% to 36% of the total while the share of strugglers will drop from 31% to 18% The number of middle class households in India will exceed 90 million, retaining its current rank as the world s 2 nd largest middle class Annual Gross Household Income ($ 000) Elite (>30.8) Affluent ( ) Aspirers ( ) Next billion ( ) Strugglers (<2.3) Source: BCG Report The New Indian: The Many Facets of a Changing Consumer, March 2017 Note: 1. CY2016 population data is updated for all countries except Germany, for which data has been estimated by the IMF. CY2017 to CY2022 population data for all countries are estimates by the IMF. 2. Income distribution is calculated in constant 2015 dollars, $1 = 65 Rupees Indian Households by Income (Millions)

6 India China Philippines Indonesia Mexico Brazil Russia Colombia Thailand Turkey Malaysia Norway Australia Spain USA Canada Italy Japan France Germany Indian Aviation: Market Forecast Strong Growth in Tourism Total Contribution of Travel & Tourism to GDP (INR Billions) Passengers Forecast: Five Fastest Growing Markets (Millions) Total contribution of Travel & Tourism to GDP was INR14,019 bn (9.5% of GDP) in 2016 and is forecasted to rise by 6.7% p.a. to INR28,492bn (10% of GDP) by 2027 According to IATA, India s air travel sector supports 8 million jobs and contributes USD 72 billion in the GDP 14,019 12,940 11,846 10,398 10, China US India Indonesia Vietnam Source: WTTC Source: IATA, October 2016 Untapped Market Potential Annual Trips per Capita CY 2016 India has the lowest penetration rate 0.09 annual trips per capita for CY 2016 Lowest amongst developing nations like Brazil, Turkey, Indonesia and China Source: Airbus Global Market Forecast 2017 Expansion in Infrastructure & Capacity to Support Growing Demand Public-private partnerships State-of-the-art greenfield airports work on for brownfield airports Domestic India is projected to be fastest growing aviation market at 10.7% CAGR ( ) and 8.8% CAGR ( ) 12% 10% 8% 6% 4% 2% 0% 10.7% 6.8% 7.6% 7.4% 5.7% 4.3% 8.0% 5.4% Domestic India Domestic PRC Domestic Turkey Domestic Emerging Asia Domestic Air Passenger Traffic Forecast (Top 10 Markets) CAGR CAGR 5.8% 6.5% Domestic Sub Sahara Africa 5.0% 4.6% Domestic South America 4.3% 3.9% Domestic South Africa 5.0% 4.6% Domestic Brazil 4.5% 2.8% Domestic North Africa 5.8% 4.5% Domestic Caribbean Source: Airbus Global Market Forecast

7 Indian Aviation: Demand & Supply Trends Strong underlying demand to match supply ASK of Domestic Scheduled Services (billions) RPK of Domestic Scheduled Services (billions) India is a growth market. Demand growth has outpaced growth in supply. Domestic growth has seen a spurt in the last 2 years on account of economic buoyancy and reasonable fares due to low ATF prices. The UDAAN scheme, introduced as part of National Civil Policy, will provide a boost to regional FY11 FY12 FY13 FY14 FY15 FY16 FY17 03M FY17 Source: DGCA data as of 30 June 2017 ASK of International Scheduled Services (billions) 03M FY18 FY11 FY12 FY13 FY14 FY15 FY16 FY17 03M FY17 Source: DGCA data as of 30 June 2017 RPK of International Scheduled Services (billions) 03M FY18 connectivity and drive demand from the Tier-II and Tier-III cities. The Union Civil Aviation Ministry has already awarded 128 routes connecting 70 airports to airlines. International sectors keep opening up and the travel patterns are becoming more Point to point. FY11 FY12 FY13 FY14 FY15 FY16 FY17 03M FY17 03M FY18 FY11 FY12 FY13 FY14 FY15 FY16 FY17 03M FY17 03M FY18 Source: DGCA data as of 30 June 2017 Source: DGCA data as of 30 June

8 Indian Aviation Landscape Airline Promoter Market Share (1) # (Domestic) Capacity Share (1) * (Domestic) Service Type (2) Fleet Size (2) Aircraft Type (2) Airports (2) Air India Govt of India 12.9% 14.4% FSC 152 A319, A320, A320N, A321, B747, B777, B787, ATR42/72 69-Dom 37-Int Jet Airways Naresh Goyal 17.5% 17.6% Dual 105 (4) A330, B737, B777, ATR72 IndiGo InterGlobe Enterprises 40.1% 40.5% LCC 135 A320, A320N SpiceJet Ajay Singh 13.4% 11.4% LCC 55 (3) B737, Q Dom 20-Int 39-Dom 7-Int 40-Dom 7-Int GoAir Wadia Group 8.4% 8.1% LCC 23 A320, A320N 23-Dom Source: (1) DGCA (June2017) (2) Company website and Internet search (30 June 2017) Indian Domestic Full-Service Carriers vs. Low-Cost Carriers Market Share LCCs consistently gaining market share and expect to reach 75% -80% within two years as per CAPA 50.2% 39.2% 36.6% 35.1% 35.8% 32.4% 49.8% 60.8% 63.4% 64.9% 64.2% 67.6% FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 LCC Market Share FSC Market Share Source: DGCA Note: (3) Company operates 1 aircrafts on wet lease ; (4) Doesn't include data for subsidiaries #Percentage of total passengers carried; *Percentage of total ASKM deployed 8

9 Table of Contents 1 Industry Snapshot 2 Spicejet: Fact Sheet 3 Corporate Strategy 4 Key Financials and Stock Price Performance 9

10 Key Highlights: Strong Performance, Consistent Execution #1 Best performing Indian airline stock in terms of investor returns over the last 2 years #2 One of the few airlines globally to turn in nine successive quarters of profitability after near shutdown (1) #3 Average OTP of 81.3% since March 16 at metro stations: Highest amongst Indian operators (2),(3) #4 Industry Leading Load Factor of 90%+ for 27 months in a row (2) #5 Unique two pronged fleet strategy helps in optimizing network and adapting to existing infrastructure conditions & different demand profiles #6 Strong foothold in domestic market and substantial presence in regional and international operations. Spicejet is in a better position to take advantage of the growth witnessed in tier 2 / tier 3 cities #7 Strong management team with Mr. Ajay Singh at the helm pioneer of low cost aviation in India Best positioned to capitalize on aviation growth backed by strong demand from India s secondary centres Note: 1. Data as of March 2017, 2. Source: DGCA (June 2017) 3. Average of OTP from March 2016 to June 2017, Source: DGCA Statistics 10

11 Route Network 48, ~ Pax carried per day ~ Flights per day Domestic destinations International destinations Note: Data for June

12 Operations Overview History and Corporate Matters Started in May 2005, 2 nd largest airline by Jul 14 Change of control in 2010, Acquired by Marans Change of control again, Ajay Singh takes over following scheme of reconstruction and revival in Feb 15 Fleet Details (1) B Fleet: 2 aircraft B Fleet: 29 aircraft B Fleet: 4 aircraft Q400 Fleet: 20 aircraft Total Fleet Size 55 aircraft Scale of Operations Passengers Ferried: 48,500 per day 1.42 million per month (2) Market Share(2) : 13.4% on domestic operations Passenger Load Factor (2) : 94.5% - Highest in industry (domestic) consistently Share Market Data (1) CMP: Rs week H/L: Rs / Market Cap: ~Rs. 79,168 Mn (30 th June 17) Promoter Shareholding: 60.3% Stock Performance since Jan 15 (announcement of change in control): 609% Note: (1) Data as of 30 June 2017 (2) Source: DGCA Statistics as of 30 June

13 Key Management Personnel Management Team Ajay Singh Chairman & MD Arun Kashyap Head of Engineering Bhavesh Mishra Chief of Flight Safety Chandan Sand Head of Legal & Company Secretary Debojo Maharshi Chief Marketing Officer GP Gupta Chief Administrative Officer Kamal Hingorani SVP IFSD & Customer relations Kiran Koteshwar Chief Financial Officer Manjiv Singh Chief Projects Officer Shilpa Bhatia SVP - Sales and Revenue SPS Suri Head of Flight Operations The Company has a strong management team supported by robust middle management 13

14 Awards and Recognition Awarded as Best Historic Turnaround at the 9th ASSOCHAM International Conference & Awards 2016 Won the Best Domestic Airline for South India award by DDP TravTalk 2016 Voted as Best Transportation brand and Best Airline brand in India by Brand Trust Report 2016 Spicejet PR was awarded the best Individual: Consultancy Professional award at Fulcrum Public relations (PR) campaign Rising like a Phoenix awarded at the Global SABRE Awards as among the 40 best PR campaigns in the world 2016 Awarded for Best Employee Engagement at the 4th DMA-Thomas Associates National Award 2016 Awarded the Best Check-in Initiative by Future Travel Experience global awards for its introduction of Bluetooth Low Energy (BLE) beacons and Near Field Communication (NFC) technology SpiceJet CMD Mr. Ajay Singh received the DDP Game Changer award at the North India Travel Award 2016 SpiceJet CMD Mr. Ajay Singh received the World Travel Leaders award at the World Travel Market Awards in London 2016 SpiceJet received 'Asia's Greatest Brands ' award at the Asia One Awards and SpiceJet CMD Ajay Singh and CFO Kiran Koteshwar were honored with 'Global Asian of the year' and 'Asia's Greatest CFO 2016' awards respectively

15 Table of Contents 1 Industry Snapshot 2 Spicejet: Fact Sheet 3 Corporate Strategy 4 Key Financials and Stock Price Performance 15

16 Corporate Strategy Maximize asset utilization Expand international Focus on key sectors Develop regional markets with Q400 Dynamic fleeting capability to address seasonality variations Sizing capacity to demand Revenue Maximization / Optimization Low Cost Operations Monitoring and improving fuel consumption Readiness for import of fuel or hedging Lower aircraft acquisition & associate maintenance costs Bring down other costs by insourcing or securing long terms contracts Maintain fleet reliability Develop a continuous line of trained professionals through its academy Implement and maintain high level of automation Highly skilled and motivated work force Build its financials to avoid shocks Consolidate Operations & Strengthen Financials Increase Ancillary Revenue Maximize passenger related ancillaries through a range of value-based products Integrate travel related services like hotels, vacations, car hire etc. Develop cargo and merchandise business units 16

17 Consolidating Market Presence and Strengthening Performance SpiceJet Air India Jet Airway and JetLite Indigo GoAir Others SpiceJet Air India Jet Airway and JetLite Indigo GoAir SpiceJet Air India Jet Airway and JetLite Indigo GoAir Growth in Market Share Market Leader in terms of Load Factor Significant Improvement in OTP * 23.3% 40.1% 36.2% 94.5% 86.7% 85.9% 76.8% 89.1% 88.8% 81.2% 87.8% 84.2% 89.4% 64.2% 79.8% 69.9% 70.4% 69.9% 59.8% 77.1% 86.1% 75.9% 73.4% 18.3% 17.5% 13.4% 12.9% 10.5% 9.4% 8.4% 7.7% 2.3% Others Dec-14 Jun-17 Dec-14 Jun-17 Source: DGCA Source: DGCA Source: DGCA Dec-14 Jun-17 Will increase market share responsibly by gaining stronger presence in profitable & key markets Increased regional connectivity together with focus on international expansion to propel market share Maintain operational efficiency with strong focus on high OTP and low cancellations Market leading load factors testament to strong brand connect and improving OTP performance Note: * Average of 04 metro stations 17

18 Current Fleet and Expansion Plans Focus on Increasing Regional & International Presence; Create Strong Foothold Domestically Boeing Fleet Bombardier Fleet Aircraft Type Boeing Boeing Boeing Q400 Fleet Size (1) 2 aircraft 29 aircraft 4 aircraft 20 aircraft Seat capacity 149 Y 189 Y 212 Y 78 Y Description Expansion plans Operates 34 B737 family aircraft on operating lease Serves 40 domestic and 7 international routes Additionally, the company operates 1 aircraft on wet lease making it a total of 35 narrow body operations. January 2017: Placed an order with Boeing for 155 firm and 50 options for B737 Max aircraft June 2017: Entered into an MOU with Boeing for 20 firm and 20 options for B737 Max 10 aircraft at Paris Air Show Operates 20 Q400s: 13 on finance lease and 7 on dry operating lease With 78 seats each, these serve as excellent connecting agents for niche routes with high passenger yields Provide the airline with significant flexibility to develop regional routes and test new markets June 2017: Placed an order with Bombardier for purchase of 25 and purchase right for 25 Q400 aircraft at Paris Air Show Note: (1) Data as of 30 June,

19 Sustain Profitability: Focus on increasing Margins by Reducing Costs Manpower optimisation to cater to maximise utilisation & increased productivity Renegotiation of unfavourable contracts and SLA management Fuel saving methods such as fuel hedging, lightweight seats being considered. Invested in fuel dashboard software system for monitoring fuel conservation measures. Continuous Focus on Reducing Costs Cost reduction initiatives by dedicated cross-functional task-force Drastic improvement in efficiencies of key functions like cargo handling and call centre after being taken in-house Dynamic fleeting to address seasonality variations Work in progress for direct import of ATF estimated cost saving of 12-15% on fuel cost Increase contribution of direct sales; Spicejet APP was launched. Manage Structural Matters Route optimization reduce unproductive flight time; Will invest in technology & upgrading aircraft specifications. Focus on increasing ancillary revenues through travel related opportunities 19

20 Increasing Focus on Ancillary Revenue Ancillary Products & Services* Ancillary Products and Services Focussed Communication Excess Baggage Charges Spice Max Seats Meals Pre Book Seats Insurance Hand Baggage My Flexi Plan Spice Vacations Priority Check in Lounge Visa Cab Note: * The list is not exhaustive 20

21 Increasing Brand Acceptance Improving OTP Changing perception Targeting to be more Customer Friendly Trendy Taglines Getting the Point Across with High Impact Focused Marketing and Promotion Campaigns riding on Spicejet s Strong Brand Recall to Deliver Maximum Impact at Optimum Cost 21

22 Table of Contents 1 Industry Snapshot 2 Spicejet: Fact Sheet 3 Corporate Strategy 4 Key Financials and Stock Price Performance 22

23 Improved Operational Efficiency Bringing Stability to our Financials Profit and Loss Account (1) Balance Sheet (1) Annual Financial Performance SpiceJet recorded second successive profitable year Net worth Rs. MN Net Revenue from Operations Rs. MN EBITDAR (2) Rs. MN Net Profit Rs. MN (2,244) 56,007 62,387 51,727 50,204 61,013 15,643 16,549 4,498 4,307 (6,091) 8,163 (1,911) (9,945) (10,389) 3,348 4,675 (6,871) (14,852) FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 (10,032) FY13 FY14 FY15 FY16 FY17 Calculated as sum total of share capital and other equity Quarter Financial Performance SpiceJet recorded ninth consecutive profitable quarter Net Debt Rs. MN Net Revenue from Operations Rs. MN EBITDAR (2) Rs. MN Net Profit Rs. MN 14,610 15,112 12,178 15,064 13,785 16,027 16,138 4,743 3,334 4,842 3,630 1,490 1,811 9,200 8, FY13 FY14 FY15 FY16 FY17 11,032 10,291 14,394 14,487 Q1 Q2 Q3 Q4 FY16 FY17 3,081 2,693 5,409 4,461 Q1 Q2 Q3 Q4 FY16 FY ,399 1,079 Q1 Q2 Q3 Q4 FY16 FY17 Calculated as sum total of long term and short term borrowings net of cash and bank balances Debt is substantially on account of finance lease on Q400 aircraft Note 1: Source BSE filings Note 2: EBITDAR is calculated as total income net of (i) operating expenses (ii) employee benefit expenses (iii)other expenses and adding rentals 23

24 Comparison with Global Peers Comparison with Domestic Peers Operational Turnaround Rubbing off on Stock Price Price Performance Rebased to 100 Last 1 year Jul Sep Nov Feb Apr-17 Price Performance Rebased to 100 Since 15 th January, 2015 (Change of Control) till date Jan Jun Oct Mar Jul Nov Apr-17 SpiceJet 105% Jet Airways 3% Indigo 15% Sensex 14% SpiceJet 609% Jet Airways 26% Indigo 33% Sensex 10% Price Performance Rebased to 100 Last 1 year Jul Sep Nov Feb Apr-17 Thai Airways -20% Cathay Pacific 7% Qantas Airways 107% Air Asia 8% Air Arabia -22% Singapore Airlines -5% Price Performance Rebased to 100 Since 15th January, 2015 (Change of Control) till date Jan Jun Oct Mar Jul Nov Apr-17 Thai Airways 24% Cathay Pacific -31% Qantas Airways 142% Air Asia -25% Air Arabia -39% Singapore Airlines -19% Best performing Indian airline stock in terms of investor returns over the last 2 years Source Reuters as of 30 June,

25 Thank You SpiceJet Limited Regd. Office: Indira Gandhi International Airport, Terminal 1D, New Delhi Website: T: ; F: For detailed quarter/annual financial performance information, visit investor section on our company website