Corporate Presentation. Corporate Presentation December 2016

Transcription

1 Corporate Presentation Corporate Presentation December 2016 June 2018

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 USD $ billion Strong Economic Growth Real GDP Growth Projection CY2016 CY2022E India is likely to reclaim its position as the fastest growing major economy of the world ahead of China in CY18 according to World Bank. Growth projections of Indian economy range from 6.7% to 7.1% for FY 18 and expects ~7.45% for FY19. 3 With 1.3 billion population base, the share of elite, affluent and aspirers households is expected to increase to 36% of the total while the share of strugglers is expected to drop to 18% by 2025 according to Boston Consulting Group (BCG). Total FDI inflows in India increased to $61.9 billion at CAGR of 13% from FY13 to FY18. According to IATA, India is set to become third largest air passenger market by % 6.0% 5.2% 3.5% India China ASEAN-5 Middle East & North Africa Source: IMF, World Economic Outlook, October 2017 Indian Households by Income (Millions) Household Income ($ 000) (<2.3) ( ) ( ) ( ) (>(>30.8) Strugglers Next billion Aspirers Affluent Elite 3.1% Sub-Saharan Africa % Latin America & Caribbean % 1.8% European Union FDI Inflows into India 56 World average of 3.7% 60 Advanced economies FY13 FY14 FY15 FY16 FY17 FY18 62 Source: BCG Report The New Indian: The Many Facets of a Changing Consumer, March 2017 Source: Department of Industrial Policy & Promotion 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 3. Source includes Moody, IMF, World Bank and other financial institutions. 5

6 Million Indian Aviation: Global Comparison Population and Fleet Size Annual Trips per Capita 1,600 1,200 1,383 1,309 Population 8,000 Fleet Size 10,000 8, x China India United Staes Indonesia Brazil Vietnam South Africa 6,000 4,000 2, India South Africa China Vietnam Indonesia Brazil United States Source: Internet research, World Economic Outlook, October 2017 Source: Airbus Global Market Forecast, July 2018 Domestic Air Passenger Traffic Forecast (Top 10 Markets) 14% 12% 11.5% CAGR CAGR 10% 8% 6% 4% 6.2% 7.3% 5.6% 8.3% 8.7% 3.9% 5.3% 5.5% 6.3% 4.9% 4.7% 3.2% 3.8% 6.0% 4.5% 3.4% 3.3% 4.6% 4.5% 2% 0% Domestic India Domestic PRC Domestic Turkey Domestic Emerging Asia Domestic Sub Sahara Africa Domestic South America Domestic South Africa Domestic Brazil Domestic North Africa Domestic Caribbean Source: Airbus Global Market Forecast, July 2018 According to Airbus, Domestic India is projected to be fastest growing domestic aviation market at 11.5% CAGR ( ) 6

7 Indian Aviation: Demand & Supply Trends ASK of Domestic Scheduled Services (billions) RPK of Domestic Scheduled Services (billions) FY12 FY13 FY14 FY15 FY16 FY17 FY18 03M FY18 03M FY19 FY12 FY13 FY14 FY15 FY16 FY17 FY18 03M FY18 03M FY19 Source: DGCA data (June 2018) ASK of International Scheduled Services (billions) Source: DGCA data (June 2018) RPK of International Scheduled Services (billions) FY12 FY13 FY14 FY15 FY16 FY17 FY18 03M FY18 03M FY19 FY12 FY13 FY14 FY15 FY16 FY17 FY18 03M FY18 03M FY19 Source: DGCA data (June 2018) Source: DGCA data (June 2018) Demand growth has outpaced growth in supply in the last 4 years on account of economic growth and change in travelling trends 7

8 Indian Aviation: Competitive Landscape Airline Promoter Market Share (1) # (Domestic) Capacity Share (1) * (Domestic) Service Type (2) Fleet Size (2) Aircraft Type (2) Airports (2) IndiGo InterGlobe Enterprises 41.4% 40.7% LCC 175 A320, A320N, ATR Air India Govt of India 12.2% 12.8% FSC 162 Jet Airways Naresh Goyal 15.0% 15.5% Dual 118 SpiceJet Ajay Singh 12.1% 10.3% LCC 58 3 B737, Q400 A319, A320, A320N, A321, B747, B777, B787, ATR42/72 A330, B737, B777, ATR72, B737MAX 43-Dom 8-Int 72-Dom 44-Int 45-Dom 20-Int 46-Dom 7-Int GoAir Wadia Group 9.3% 9.1% LCC 38 A320, A320N 23-Dom Vistara Tata Group 4.0% 4.9% FSC 21 A Dom Air Asia AirAsia, Tata Sons 5.3% 6.3% LCC 18 A Dom Source: (1) DGCA (June 2018) (2) Company website and Internet search (01 st August 2018) Indian Domestic Full-Service Carriers vs. Low-Cost Carriers Market Share 38.5% 36.0% 34.7% 35.4% 31.7% 30.6% 61.5% 64.0% 65.3% 64.6% 68.3% 69.4% FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 LCC Market Share FSC Market Share Source: DGCA Note: (3) Company operates 1 aircrafts on wet lease ; #Percentage of total passengers carried; *Percentage of total ASKM deployed 8

9 Indian Aviation: Airport Development 125 Operational airports in India, out of total 464 airports and airstrips 1 Cr INR budget allocated to 6,602 Civil Aviation Ministry for FY 19, an increase of 27% as compared to Union Budget for FY Airports aimed to be operational across the country by FDI allowed under 100% automatic route in Greenfield Projects & 74% for brownfield projects 1 22 Airports to be connected by Airport Authority of India under UDAN scheme in the first phase 3 Income tax for airport projects for a period of 10 0% years by govt. 1 17,500 Cr INR will be invested by AAI in upgrading airport infrastructure over a period till Installations of Radar, VOR/DVOR and Distance Measuring Equipment across all major air-routes over Indian landmass 3,4 Source: 1. DGCA, 2. Make in India 3. AAI Note: 4. Includes 29 Radar installations, 89 VOR/DVOR installations & 90 Distance Measuring Equipment installations 9

10 Table of Contents 1 Industry Snapshot 2 Spicejet: Fact Sheet 3 Corporate Strategy 4 Key Financials and Stock Price Performance 10

11 Key Highlights: Strong Performance, Consistent Execution #1 Best performing Indian airline stock in terms of investor returns over the last 3 years #2 One of the few airlines globally to turn in 14 th consecutive quarter of operating profit after near shutdown (1) #3 Average OTP of 81% since June 16 at metro stations One of the leading OTP in the industry (2) #4 Industry Leading Load Factor of 90%+ for 39 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 June 2018, 2. Source: DGCA (June 2018) 11

12 Route Network 52, ~ Pax carried per day ~ Flights per day Domestic destinations International destinations Note: Data for June

13 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: 3 aircraft B Fleet: 29 aircraft B Fleet: 4 aircraft Q400 Fleet: 22 aircraft Total Fleet Size 58 aircraft Scale of Operations Passengers Ferried: 52,400 per day 1.57 million per month (2) Market Share(2) : 12.1% on domestic operations Passenger Load Factor (2) : 93.3% - Highest in industry (domestic) consistently Share Market Data (1) CMP: Rs week H/L: Rs. 154 /97 Market Cap: ~Rs. 65,405 Mn (30 th June 18) Promoter Shareholding: 60.03% Stock Performance since Jan 15 (announcement of change in control): 391% Note: (1) Passenger Data as of 30 th June 2018; Market Share Data as of June, 2018 (2) Source: DGCA Statistics as of 3oth June

14 Management Ajay Singh Chairman & MD Leadership Team Arun Kashyap Executive Vice President Engineering & Maintenance Chandan Sand Sr. Vice President Legal & Company Secretary Debojo Maharshi Chief Marketing Officer GP Gupta Chief Strategy Officer & Accountable Manager GPS Grewal Chief of Flight Safety Kamal Hingorani SVP & Head - IFSD & Customer Experience Kiran Koteshwar Chief Financial Officer Manjiv Singh Chief Project Officer Shilpa Bhatia Chief Sales & Revenue Officer SPS Suri Executive Vice President Flight Operations Surajit Banerjee Sr. Vice President & Head - Human Resources The Company has a strong management team supported by robust middle management 14

15 Awards and Recognition Outstanding Entrepreneur of the decade award and Best airlines operating under RCS at the Air Passengers Association of India (APAI) USISPF (U.S. India Strategic Partnership Forum) Leadership Award in Washington D.C. on July 12, 2018 Awarded as Best Domestic Airline award at the Wings India Awards for excellence in the aviation sector SpiceJet CMD Mr. Ajay Singh was named Indian Entrepreneur of the Year 2017 for Business Transformation by EY AIRLINE STRATEGY AWARDS 2018 SpiceJet CMD Mr. Ajay Singh awarded with the Global Low-Cost Leadership Award at the Airline Strategy Awards 2018 in London on July 15. The 2018 jury included Geoff Dixon former MD & CEO of Qantas, Ray Webster, former CEO of EasyJet, Montie Brewer former CEO of Air Canada, Rigas Doganis, Advisor to governments and airlines on air transport policy, among others. SpiceJet was conferred the CAPA Chairman s Order of Merit for Excellence in Indian Aviation Capital Finance International has awarded SpiceJet the 2017 Best Corporate Governance India Award SpiceJet Awarded Best In-Flight Asia-Pacific Award for Interior Retrofit Project in association with STG Aerospace at the Inflight Asia-Pacific Awards SpiceJet was awarded the Best Domestic Airline at the 4th West India Awards held at Ahmedabad 15

16 Table of Contents 1 Industry Snapshot 2 Spicejet: Fact Sheet 3 Corporate Strategy 4 Key Financials and Stock Price Performance 16

17 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 17

18 Feb-15 Jun-15 Oct-15 Consolidating Market Presence and Strengthening Performance Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18 Feb-15 Jun-15 Oct-15 Feb-16 Jun-16 Oct-16 Feb-17 Jun-17 Oct-17 Feb-18 Jun-18 Significant Improvement in OTP * Market Leader in terms of Load Factor Growth in Market Share 100% 90% 95% 16% 14% 80% 70% 85% 12% 10% 60% 50% 75% 8% 6% 40% 65% 4% Source: DGCA Source: DGCA Source: DGCA Well placed to tap the smaller and regional routes that are driving disproportional market growth 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 Industry leading load factors and improving OTP performance testament to increasing passenger confidence Note: * Average of 04 metro stations 18

19 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) 3 aircraft 29 aircraft 2 4 aircraft 22 aircraft Seat capacity 149 Y 189 Y 212 Y 78 Y Description Expansion plans Operates 36 B737 family aircraft on operating lease Serves 46 domestic and 7 international routes Additionally, the company operates 1 aircraft on wet lease making it a total of 36 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 B737 Max 10 aircraft and 20 conversions from previous order at Paris Air Show Operates 22 Q400s: 13 on finance lease and 9 on 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 th June 2018 (2) Include 01 aircraft on wet lease 19

20 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 20

21 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 21

22 Increasing Brand Acceptance Introducing New Routes every Month Lucrative Offers Focused Marketing and Promotion Campaigns riding on Spicejet s Strong Brand Recall to Deliver Maximum Impact at Optimum Cost 22

23 Table of Contents 1 Industry Snapshot 2 Spicejet: Fact Sheet 3 Corporate Strategy 4 Key Financials and Stock Price Performance 23

24 Improved Operational Efficiency Bringing Stability to our Financials Profit and Loss Account (1) Balance Sheet (1) Net Revenue from Operations Rs. MN Annual Financial Performance SpiceJet recorded third successive profitable year EBITDAR (2) Rs. MN Net Profit Rs. MN Net worth Rs. MN (430) 54,629 53,038 63,424 79,324 15,643 16,550 19,270 4,498 4,307 5, (9,945) (10,389) (6,091) 22,708 4,675 3,984 (14,852) FY14 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY19Q1 FY15 FY16 FY17 FY18 FY19Q1 (6,871) FY15 FY16 FY17 FY18 FY19Q1 Calculated as sum total of share capital and other equity Quarterly Financial Performance SpiceJet recorded another profitable quarter (excluding exceptional items) Revenue/Expenses Rs. MN 18,863 Revenue 22,708 22,454 FY18Q1 17,111 FY19Q1 Expenses 6,000 5,000 4,000 3,000 2,000 1,000 0 EBITDAR & EBITDAR margin(%) (2) Rs. MN 25% 4,793 3,984 FY18Q1 EBITDAR 18% FY19Q1 EBITDAR Margin 30% 2,000 25% 1,500 20% 15% 1,000 10% 500 5% 0% 0 Net Profit & Profit Margin (%) Rs. MN 9% 1% 1, FY18Q1 EAT FY19Q1 EAT margin 10% 8% 6% 4% 2% 0% Net Debt Rs. MN 17,140 14,553 11,238 10,881 9,903 FY14 FY15 FY16 FY17 FY18 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 Note 3: FY19Q1 excludes exceptional items 24

25 Operational Turnaround Rubbing off on Stock Price Price Performance Rebased to 100 Last 1 year Price Performance Rebased to 100 Since 15 th January, 2015 (Change of Control) till date Jun Sep Dec Mar Jun-18 SpiceJet 13% Sensex 15% 0 30-Jan Jul Jan Jul Jan Jul Jan-18 SpiceJet 391% Sensex 21% Best performing Indian airline stock in terms of investor returns over the last 3 years Source Reuters as of 30 th June

26 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