Cebu Air, Inc. Annual Stockholders Briefing 24 June 2015 cebupacificair.com
Business Updates
Passengers (M) Operating Statistics 2014: Passenger traffic grew 17.5% to 16.9M. Seat capacity grew 14.8% to 20.1M, for a 83.9% SLF. 1Q15: Passenger traffic grew 13.0% to 4.3M. Seat capacity grew 18.1% to 5.4M, for a 78.9%. SLF. We utilized our airbus fleet at 12.1 hours per day and turned them 6.6x per day. On-time performance (OTP) posted at 73% for 2014 and 68% for 1Q15. Load Factor 81.9% 83.9% 82.5% 78.9% 16.9 14.4 3.8 3.3 11.0 13.0 3.8 0.9 4.3 1.0 2.9 3.3 2013 2014 1Q14 1Q15 Domestic International 24 June 2015 3
Domestic Market Average Domestic Market Share Highest market share at 60.8% in 2014 Most number of passengers carried; Highest seat load factor and competitive performance index Continued dominance in 1Q15 with 59.7% market share (1) Most extensive network: 34 destinations, 55 routes, and 2,121 weekly flights (1) 2015 figures are based on internal estimates 24 June 2015 4
International Market International Market Share Long Haul Flights Foreign Airlines 48.7% CEB Group 18.7% PAL Group 28.6% Air Asia Group 3.9% Destination Weekly Flights (1) Dubai 7x Sydney 5x Kuwait 4x Riyadh 3x Doha 2x (1) Subject to seasonal adjustments Total International market share posted at 18.7% in 2014, up from 16.3% in 2013. Short haul posted 78.4% SLF in 2014 and 77.7% SLF in 1Q15: 23 destinations, 32 routes, and 440 weekly flights Launched 4x weekly Cebu-Narita service beginning March 26, 2015 Long haul posted 61.3% SLF in 2014, and 60.6% in 1Q15 Launched Doha, Qatar in June 04, 2015 24 June 2015 5
New Businesses Flew 1.3M passengers in 2014, and 0.5M in 1Q15. Posted 75.9% SLF in 1Q15 Domestic market share increased from 4.2% in 1Q14 to 8.6% in 1Q15 (1) As of March 31, 2015: 16 destinations, 17 routes, 299 weekly flights. 2014: Revenues at P2.8 B, Net loss of P160M 1Q15: revenues of P1.1B, Net income of P153M GetGo, CEB s lifestyle rewards program, was officially rolled out last March 6, 2015. Members may start earning points by flying with CEB and use those points to redeem free flights. (1) 1Q15 market share is based on internal estimate 24 June 2015 6
Financial Results
Income Statement Highlights YOY Change FY2013 FY2014 1Q14 1Q15 FY 1Q Total Revenue (Php Million) 41,004 52,000 11,764 14,198 26.8% 20.7% Passenger Revenue 31,663 40,188 8,848 10,808 26.9% 22.2% Ancillary Revenue 6,732 8,665 2,236 2,618 28.7% 17.0% Cargo Revenue 2,609 3,146 680 773 20.6% 13.6% Average Yield per passenger 2,675 2,896 2,926 3,137 8.2% 7.2% Average fare 2,206 2,382 2,336 2,525 8.0% 8.1% Ancillary/passenger 469 514 590 612 9.5% 3.6% Cargo yield per kg 20.53 20.31 21.57 20.80-1.1% -3.6% (PHP million) EBITDAR 8,765 12,418 2,431 5,162 41.7% 112.3% EBIT 2,404 4,157 512 2,831 72.9% 452.5% Pre-tax Core Net income 1,878 3,320 315 2,565 76.8% 713.2% Net income 512 853 164 2,225 66.7% 1255.3% Margins EBITDAR Margin 21.4% 23.9% 20.7% 36.4% 2.5 ppts. 15.7 ppts. EBIT Margin 5.9% 8.0% 4.4% 19.9% 2.1 ppts. 15.6 ppts. Pre-tax Core Net Income Margin 4.6% 6.4% 2.7% 18.1% 1.8 ppts. 15.4 ppts. Net income margin 1.2% 1.6% 1.4% 15.7% 0.4 ppts. 14.3 ppts. 24 June 2015 8
Balance Sheet Highlights As at Dec 31, As at Mar 31, Php Millions 2014 2015 Current assets 8,526 10,611 Noncurrent assets 67,536 70,102 Total Assets 76,062 80,713 Total debt (1) 33,850 35,595 Other liabilities 20,674 21,354 Total Liabilities 54,523 56,949 Total Equity 21,539 23,764 Cash level at P6.03B as at Mar 31, 2015 vs. P3.96B in Dec 31, 2014 Property and equipment at P67.9B in 2015 vs. P65.2B in 2014 due to two A320 aircraft deliveries in 1Q15 Net debt-to-equity (2) 1.39x 1.24x Adjusted net debt-to-equity (3) 2.55x 2.34x Cash-to-sales-LTM ratio 8% 11% Forex, closing 44.72 44.70 NOTE: (1) Includes current and noncurrent portion of long-term debt (2) Net debt is total debt less cash and cash equivalents. (3) Adjusted net debt is net debt plus capitalized lease and ARO liability 24 June 2015 9
Cash Flows Php Millions FY2014 1Q2015 CASHFLOWS FROM OPERATING ACTIVITIES Income after noncash adjustments 8,980 4,240 Net changes in working capital (438) 206 Interest and income taxes paid net (966) (309) Net cash provided by operating activities 7,575 4,137 CASHFLOWS FROM INVESTING ACTIVITIES Acquisition of property and equipment and other noncurrent assets (13,201) (3,798) Investment in a subsidiary (489) - Dividends received from a joint venture 84 - Net cash used in investing activities (13,605) (3,798) CASHFLOWS FROM FINANCING ACTIVITIES Availment of long term debt 8,478 3,099 Repayment of long term debt (4,177) (1,374) Dividends paid (606) - Net cash provided by financing activities 3,695 1,725 Net foreign exchange difference (14) 2 NET INCREASE IN CASH AND CASH EQUIVALENTS (2,349) 2,066 CASH AND CASH EQUIVALENTS, beginning 6,313 3,964 CASH AND EQUIVALENTS, END 3,964 6,030 24 June 2015 10
Outlook
Fuel and Forex Fuel As of June 05, 2015, Jet Kero at $72.42/bbl from $70.38/bbl on December 31, 2014 Hedge ratio at 26% for 2015, and 14% for 2016. 85 80 75 70 65 Jet Kero Front-Month Closings Forex As of June 05, 2015, USDPHP at 44.87, from 44.72 in Dec 31, 2014. We have no outstanding FX hedges. 60 2-Jan 2-Feb 2-Mar 2-Apr 2-May 2-Jun Data source: Mitsui Bussan Commodities 45.20 45.00 44.80 44.60 USDPHP Closing Prices 44.40 44.20 44.00 43.80 1-Jan 1-Feb 1-Mar 1-Apr 1-May 1-Jun Data source: pds.com.ph 24 June 2015 12
ATR 72-600 Purchase ATR 72-600 Operating Metrics: Maximum take-off power: 2,750 horsepower per engine Maximum take-off weight: 23,000 kg Maximum load: 7,500 kg Maximum range when fully loaded: 900 nautical miles CEB signed an agreement with ATR for the purchase of 16 ATR 72-600, with option to buy up to 10 additional Deliveries to take place between 2016 and 2020. New aircraft configuration features 6 additional seats, and 30% more stowage space. Existing fleet of 8 ATR 72-500 will be gradually replaced, while 8 of the new ATR 72-600 will be used to grow our domestic network particularly outside of Metro Manila. 24 June 2015 13
Fleet Expansion 59 52 55 55 5 6 6 6 3 8 8 10 11 7 7 6 4 Ave. fleet age (1) 4.60 years 32 34 33 35 2014 2015 2016 2017 A321 NEO A330 - Operating Lease ATR - Finance Lease A320 - Operating Lease A319/A320 - Finance Lease Between 2015 to 2022: Total remaining order book of 7 A320, 30 A321 NEO, and 16 ATR 72-600 (2) 6 A319 to be sold (2015-2016) 7 A320 for lease return (2016-2019) 8 ATRs to be replaced (2017-2018) (1) As of June 08, 2015 (2) Subject to finalization of purchase agreement 24 June 2015 14
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