20 February 2019
FULL YEAR 2018 RESULTS Resilient
results despite the impact of strikes and fuel bill
increase |
FULL YEAR
2018
-
More than 100 million passengers carried, the
leading European group for long-haul traffic,
-
Unit revenues per ASK up 1.1%,
-
Revenue growth in all business segments, with a
double-digit increase at Transavia,
-
Unit costs increase by 0.6% at constant
currency, fuel and pension charges1,
-
Operating result at 1,332 million euros, the
strong commercial performance and cost control helping to partly
offset the Air France strikes in the first half of the year and the
fuel bill increase[1],
-
Further reduction in Group net debt, down 195
million euros to 6.2 billion euros and Net debt/EBITDA ratio at
1.5x.
OUTLOOK
2019
-
The Group will continue to work on yield
improvement within the context of an anticipated fuel bill
increase. Based on the current data for the Passenger
network:
-
Long-haul forward booking load factors from
February to April are on average stable compared to last year, and
positively oriented for the early summer,
-
Passenger unit revenues at constant currency
expected below last year for the first quarter 2019 partly due to
the Easter shift,
-
Unit cost (CASK) reduction between -1% and 0% at
constant currency and fuel price,
-
Net debt/EBITDA ratio below 1.5x.
The Board of Directors of Air
France-KLM, chaired by Anne-Marie Couderc, met on 19 February 2019
to approve the financial statements for the Full Year 2018.
"With the largest long-haul
network operating out of Europe, the Air France-KLM Group has
reached an important milestone by carrying more than 100 million
passengers in 2018", commented Benjamin Smith, CEO of Air
France-KLM. "The strong performance of our front-line teams and
continued cost control helped partly offset the impact of strikes
at Air France in the first half of the year, as well as significant
fuel headwinds. In the past five months, we have made significant
progress in reinforcing the trust and dialogue with our employees
in both Air France and KLM, allowing for a shared strategic
approach to accelerate the Group's profitable development. I am
particularly pleased that yesterday we reached the last step in
this phase, the majority of Air France pilots having approved the
proposed categorical agreement. We have also strengthened our offer
by simplifying our brand portfolio and initiating an improvement in
our network and fleet management. These first achievements pave the
way for our ambition to regain a leading position in Europe and
worldwide."
Air
France-KLM Group |
Fourth Quarter |
Full Year |
2018 |
Change1 |
2018 |
Change1 |
Passengers
(thousands) |
24,462 |
+3.4% |
101,447 |
+2.8% |
Unit
revenue per ASK[2] (€
cts) |
6.46 |
-0.4% |
6.61 |
+1.1% |
Operating
result (€m) |
40 |
-188 |
1,332 |
-591 |
Net income
- Group part (€m) |
-218 |
+710 |
409 |
+246 |
Adj.
operating free cash flow (€m) |
-12 |
+90 |
115 |
-562 |
Net debt
at end of period (€m) |
|
|
6,164 |
-195 |
Full Year 2018 business
review
Network: Revenue
increase driven by higher unit revenues and operating result
impacted by strikes
Network |
Fourth Quarter |
Full Year |
2018 |
Change |
Change constant
currency |
2018 |
Change |
Change constant
currency |
Capacity
(EASK m) |
82,325 |
+2.9% |
|
329,199 |
+1.8% |
|
Total
revenues (€m) |
5,727 |
+3.7% |
+4.1% |
22,943 |
+1.6% |
+4.1% |
Scheduled
revenues (€m) |
5,403 |
+2.6% |
+3.0% |
21,732 |
+0.8% |
+3.4% |
Unit
revenue per EASK (€ cts) |
6.56 |
-0.3% |
+0.1% |
6.60 |
-1.0% |
+1.5% |
Unit cost
per EASK (€ cts) |
6.52 |
+3.0% |
+2.3% |
6.30 |
+1.8% |
+3.6% |
Operating
result (€m) |
34 |
-165 |
-112 |
994 |
-561 |
-382 |
Full Year 2018 combined Passenger
and Cargo revenues increased by 4.1% at constant currency to 22.9
billion euros driven by capacity growth and positive unit revenues.
The operating result amounted to 994 million euros, a 382 million
euros decrease at constant currency compared to last year, mostly
due to the strikes in the 2018 first half and to the fuel
increase.
Passenger:
Long-haul and medium-haul hubs contributing to positive unit
revenue performance
|
Fourth Quarter |
Full Year |
Passenger network |
2018 |
Change |
Change constant
currency |
2018 |
Change |
Change constant
currency |
Passengers
(thousands) |
21,110 |
+2.2% |
|
85,619 |
+2.0% |
|
Capacity
(ASK m) |
72,970 |
+3.2% |
|
292,184 |
+2.1% |
|
Traffic
(RPK m) |
62,835 |
+3.5% |
|
255,405 |
+2.8% |
|
Load
factor |
86.1% |
+0.2 pt |
|
87.4% |
+0.6 pt |
|
Total
passenger revenues (€m) |
5,092 |
+3.7% |
+4.3% |
20,655 |
+1.3% |
+3.9% |
Scheduled
passenger revenues (€m) |
4,849 |
+2.6% |
+3.1% |
19,743 |
+0.6% |
+3.2% |
Unit
revenue per ASK (€ cts) |
6.64 |
-0.6% |
-0.1% |
6.76 |
-1.5% |
+1.1% |
Full Year 2018 capacity increased
by 2.1%, mainly driven by the South American, North Atlantic and
Asian networks with respective growth of 8.6%, 3.0% and 2.1%.
The long-haul network delivered a
solid performance with an increased load factor and a unit
revenue1 up 1.2%. The
additional capacity has been well absorbed by the robustness of
demand and thanks to the strong performance of the commercial
teams.
-
The North America network benefitted from robust
demand in the premium segment and posted a 2.9% unit revenue
increase in Full Year 2018.
-
The Asian network delivered a solid performance,
with Full Year unit revenue growth up 2.0%, driven in particular in
the second half of the year by Japan and South Korea.
-
The 8.7% additional capacity on South America
was driven by growth on the Andean routes and the opening of the
Fortaleza service. The new routes performed in line with
expectations and the Full Year unit revenue performance was flat,
despite a weak second half of 2018 due to economic difficulties in
Argentina and political uncertainties in Brazil.
-
The performance of the other long-haul networks
was relatively stable compared to last year.
The medium-haul network delivered
a unit revenue increase of 1.5% for Full Year 2018: the unit
revenue was up 2.8% on the medium-haul hub network, and down 2.6%
on the point-to-point network mainly due to the competitive
pressure from rail.
Cargo: Total
revenue growth of 6.4% at constant currency on stable
capacity
|
Fourth Quarter |
Full Year |
Cargo business |
2018 |
Change |
Change constant
currency |
2018 |
Change |
Change constant
currency |
Tons
(thousands) |
303 |
+0.7% |
|
1,137 |
-0.1% |
|
Capacity
(ATK m) |
3,631 |
+0.7% |
|
14,365 |
+0.1% |
|
Traffic
(RTK m) |
2,321 |
+1.8% |
|
8,657 |
+0.7% |
|
Load
factor |
63.9% |
+0.7 pt |
|
60.3% |
+0.4 pt |
|
Total
Cargo revenues (€m) |
635 |
+3.4% |
+3.1% |
2,288 |
+4.1% |
+6.4% |
Scheduled
cargo revenues (€m) |
554 |
+2.4% |
+2.0% |
1,988 |
+3.0% |
+5.3% |
Unit
revenue per ATK (€ cts ) |
15.25 |
+1.6% |
+1.3% |
13.84 |
+2.9% |
+5.2% |
In a context of stable Cargo
network capacity, revenues grew by 6.4% at constant currency thanks
to a strong unit revenue performance. The trading environment
proved better than expected particularly over the summer period,
and the Asian and American networks made a strong contribution to
the results. Higher yields in both full freighters and bellies
resulted in an overall unit revenue increase of 5.2% at constant
currency for Full Year 2018.
Transavia: Strong
growth and a record high margin
|
Fourth Quarter |
Full Year |
Transavia |
2018 |
Change |
2018 |
Change |
Passengers
(thousands) |
3,352 |
+11.7% |
15,828 |
+7.1% |
Capacity
(ASK m) |
6,817 |
+14.4% |
30,850 |
+8.4% |
Traffic
(RPK m) |
6,199 |
+15.0% |
28,392 |
+10.1% |
Load
factor |
90.9% |
+0.5 pt |
92.0% |
+1.4 pt |
Total
passenger revenues (€m) |
309 |
+12.0% |
1,611 |
+12.2% |
Unit
revenue per ASK (€ cts) |
4.51 |
-0.9% |
5.18 |
+3.6% |
Unit cost
per ASK (€ cts) |
5.13 |
-0.1% |
4.73 |
+3.2% |
Operating
result (€m) |
-42 |
-7 |
139 |
+21 |
Transavia carried 15.8 million
passengers in Full Year 2018, an increase of 7.1% compared to last
year.
Full year 2018 saw the launch of several new routes and a strong
capacity growth of 8.4%, with an acceleration in the fourth quarter
to 14.4%. Unit revenues increased by 3.6% compared to last
year.
The Full Year 2018 operating result stood at 139 million euros, an
improvement of 21 million euros compared to last year and the best
result since the launch of the Transavia businesses. The Transavia
France performance stood out with capacity growth of more than 20%
and an operating margin of 9.1%, a year-on-year improvement of 1.0
point.
Maintenance: Order book increase
continuing
|
Fourth Quarter |
Full Year |
Maintenance |
2018 |
Change |
Change constant
currency |
2018 |
Change |
Change constant
currency |
Total
revenues (€m) |
1,206 |
+10.7% |
|
4,349 |
+4.7% |
|
Third
party revenues (€m) |
490 |
+5.4% |
+2.9% |
1,920 |
+6.6% |
+11.0% |
Operating
result (€m) |
46 |
-18 |
-19 |
195 |
-57 |
-42 |
Operating
margin (%) |
3.8% |
-2.0 pt |
-2.1 pt |
4.5% |
-1.6 pt |
-1.4 pt |
Maintenance revenues increased
compared to last year with third-party revenues up by 11.0% at
constant currency due to the inflow of new contracts. The
Maintenance order book stood at 11.4 billion dollars at the end of
the 2018, an increase of 0.6 billion dollars compared to the end of
2017, driven by the signature of several new NextGen Components and
Engine contracts.
The operating margin expressed as
a percentage of total revenues stood at 4.5%, a decrease of 1.4
points at constant currency compared to last year, partly explained
by one-offs and competitive pressure for the component
business.
Air France-KLM
Group: Full Year revenue growth of +5.0% at constant currency,
operating result at 1,332 million euros
|
Fourth Quarter |
Full Year |
|
2018 |
Change |
Change constant
currency |
2018 |
Change |
Change constant
currency |
Capacity
(EASK m) |
89,142 |
+3.7% |
|
360,049 |
+2.4% |
|
Capacity
excl. Cargo (ASK m) |
79,787 |
+4.1% |
|
323,034 |
+2.7% |
|
Traffic
excl. Cargo (RPK m) |
69,034 |
+4.5% |
|
283,797 |
+3.5% |
|
Unit
revenue per EASK (€ cts) |
6.41 |
-0.6% |
-0.2% |
6.48 |
-0.8% |
+1.5% |
Revenues
(€m) |
6,538 |
+4.1% |
+4.3% |
26,515 |
+2.5% |
+5.0% |
EBITDA
(€m) |
776 |
-193 |
-147 |
4,217 |
-546 |
-358 |
Operating
result (€m) |
40 |
-188 |
-140 |
1,332 |
-591 |
-408 |
Operating
margin (%) |
0.6% |
-3.0 pt |
-2.3 pt |
5.0% |
-2.4 pt |
-1.9 pt |
Net income
- Group part (€m)1 |
-218 |
+710 |
|
409 |
+246 |
|
In 2018, the Air France-KLM Group
posted an operating result of 1,332 million euros, down 591 million
euros compared to last year, including a negative impact of 355
million euros from the Air France strikes in the first half.
The rise in the Group's unit
revenues contributed positively to the operating result for 353
million euros excluding currency effects, and absorbed more than
half of the significantly higher fuel bill compared to last
year.
The fuel bill including hedging amounted to 4,958 million euros for
Full Year 2018, up 451 million euros and 665 million euros at
constant currency, due to the increase in the fuel price. The fuel
hedges resulted in a gain of 649 million euros.
Currencies had a negative 623
million euro impact on revenues and a positive 440 million euro
effect on costs including currency hedging. The net impact of
currencies thus amounted to a negative 183 million euros for Full
Year 2018.
Full year unit
cost up 0.6%, in line with the target range of 0 to
+1%
On a constant currency, fuel price and pension-related expense
basis, unit costs were down -0.9% in the fourth quarter 2018,
despite a 50 million euro impact from the Air France annual wage
agreement, fully booked in the fourth quarter.
For the Full Year 2018, the unit cost was up 0.6%, consistent with
the Full Year target range of 0 to +1%, and down -0.2% excluding
the impact of the strikes.
Improvement in
labor productivity and implementation of annual wage agreements in
Air France in the fourth quarter 2018
Productivity measured in EASK per FTE increased by 2.2% in the
fourth quarter 2018 while capacity increased by 3.7%.
Full Year 2018 productivity, measured in EASK per FTE, increased by
1.0% while capacity increased by 2.4%. Compared to last year, the
average number of FTEs increased by 1,200 including +250 Pilots and
+450 Cabin Crew in response to the capacity growth. Ground Staff
increased by 500 FTEs, mainly driven by the IT Innovation
department, third-party activities in E&M and the Customer
Centres.
Net employee costs were up 1.8% in 2018 compared to last year,
mainly due to the impact of the wage agreements for Air France and
KLM staff.
Positive operating free cash flow
and net debt reduction in 2018
|
Fourth Quarter |
Full Year |
In € million |
2018 |
Change |
2018 |
Change |
Cash flow
before change in WCR and Voluntary Departure Plans, continuing
operations |
568 |
-84 |
3,596 |
-353 |
Cash out
related to Voluntary Departure Plans |
3 |
+44 |
-130 |
+11 |
Change in
Working Capital Requirement (WCR) |
236 |
+136 |
246 |
-45 |
Net cash flow from operating activities |
807 |
+96 |
3,712 |
-387 |
Net
investments before sale & lease-back* |
-583 |
-8 |
-2,625 |
-187 |
Operating free cash flow |
224 |
+88 |
1,087 |
-574 |
Reduction
of lease debt |
-236 |
+2 |
-972 |
+12 |
Adjusted operating free cash flow ** |
-12 |
+90 |
115 |
-562 |
* Sum of
'Purchase of property, plant and equipment and
intangible assets' and 'Proceeds on disposal of property, plant and
equipment and intangible assets' as presented in the consolidated
cash flow statement.
** The "Adjusted operating free cash" is Operating
free cash flow" with deduction of the repayment of lease
debt.
Adjusted
operating free cash flow: +115 million euros for Full Year
2018
The Group generated positive adjusted operating free cash flow of
115 million euros in 2018, a reduction of 562 million euros
compared to 2018. This decrease compared to last year mainly
resulted from the strike impact and a net 187 million euro increase
in investments.
Net debt
reduction driven by adjusted operating free cash flow generation
and repayment of lease debt
In €
million |
31 Dec 2018 |
31 Dec 2017 |
Net
debt |
6,164 |
6,359 |
EBITDA |
4,217 |
4,763 |
Net debt/EBITDA |
1.5 x |
1.3 x |
The Group reduced its net debt to
6,164 million euros at 31 December 2018 versus 6,359 million euros
at 31 December 2017, despite the negative impact of the repurchase
of 197 million euros of hybrid notes in September 2018. This 195
million euro reduction was driven by operating free cash flow
generation and the repayment of lease debt.
The net debt/EBITDA ratio stood at 1.5x at 31 December 2018, a
slight increase of 0.13 pt compared to 31 December 2017 due to the
decrease in EBITDA.
Full year 2018:
Air France result impacted by strikes, KLM delivers a solid result
in line with last year's performance
|
Fourth Quarter |
Full Year |
|
2018 |
Change |
2018 |
Change |
Air France Group |
|
|
|
|
Operating
result (€m) |
-62 |
-179 |
266 |
-597 |
Operating margin (%) |
-1.5% |
-4.6 pt |
1.7% |
-3.8 pt |
KLM Group |
|
|
|
|
Operating
result (€m) |
112 |
+0 |
1,073 |
-6 |
Operating margin (%) |
4.2% |
-0.2 pt |
9.8% |
-0.6 pt |
Outlook
The global context remains
uncertain given the current geopolitical environment and fuel price
trends.
In 2019, the Air France-KLM Group plans to selectively grow
capacity for the Passenger network by 2% to 3% compared to 2018.
Transavia will continue to grow at a sustained pace of 9% to
11%.
The Group will continue to work on
yield improvement within the context of an anticipated fuel bill
increase. Based on the current data for the Passenger network:
-
Long-haul forward booking load factors from
February to April are on average stable compared to last year, and
positively oriented for the early summer,
-
Passenger unit revenues at constant currency
expected below last year for the first quarter 2019 partly due to
the Easter shift.
The Group will pursue initiatives
to reduce unit costs1, with a
targeted reduction for 2019 of between
-1% to 0% at constant currency
and fuel price.
The Full Year 2019 fuel bill is expected to increase by 650 million
euros compared to 2018 to 5.6 billion euros2, based
on the forward curve of 15 February 2019.
The Group's capital expenditures are planned at the level of 3.2
billion euros for the year 2019 and the Group is targeting a Net
debt/EBITDA ratio below 1.5x.
*****
The audit procedures for the
consolidated accounts have taken place. The certification report
will be published following the completion of the procedures
necessary for the filing of the Registration Document.
The results presentation is
available at www.airfranceklm.com on 20
February 2019 from 7:15 am CET.
An Analysts' Meeting hosted by Mr
Smith (CEO) and Mr Gagey (CFO) will be held at 08.30 CET on 20
February 2019 at the Pullman Paris Tour Eiffel hotel, 18, avenue de
Suffren (75015 Paris).
A live webcast of the Analysts'
Meeting will also be available on the website (password
AFKL).
To connect to the conference call, please dial:
France: Local +33 (0)1 76 77 22 57
Netherlands: Local +31 (0)20 703 8261
UK: Local +44 (0)330 336 9411
US: Local +1 720-543-0214
Confirmation code: 5711960
To listen to the audio-replay of
the conference call, please dial:
Confirmation code: 5711960
Investor
Relations
Press
Marie-Agnès de
Peslouan
Wouter van
Beek
+33 1 49 89 52 59
+33 1 49 89 52
60
+33 1 41 56 56 00
madepeslouan@airfranceklm.com
Wouter-van.Beek@airfranceklm.com
Income Statement
|
Fourth Quarter |
Full Year |
In
millions euros |
2018 |
2017 |
Change |
2018 |
2017 |
Change |
Sales |
6,536 |
6,276 |
+4.1% |
26,512 |
25,864 |
+2.5% |
Other
revenues |
2 |
2 |
-20.8% |
3 |
3 |
-15.1% |
Revenues |
6,538 |
6,278 |
+4.1% |
26,515 |
25,867 |
+2.5% |
Aircraft
fuel |
-1,336 |
-1,079 |
+23.8% |
-4,958 |
-4,507 |
+10.0% |
Chartering
costs |
-143 |
-128 |
+12.0% |
-577 |
-515 |
+11.9% |
Landing
fees and air route charges |
-474 |
-460 |
+2.9% |
-1,893 |
-1,905 |
-0.7% |
Catering |
-197 |
-182 |
+7.9% |
-783 |
-784 |
-0.2% |
Handling
charges and other operating costs |
-467 |
-440 |
+6.2% |
-1,948 |
-1,753 |
+11.1% |
Aircraft
maintenance costs |
-644 |
-548 |
+17.4% |
-2,413 |
-2,327 |
+3.7% |
Commercial
and distribution costs |
-258 |
-235 |
+9.7% |
-1,034 |
-935 |
+10.6% |
Other
external expenses |
-395 |
-404 |
-2.2% |
-1,618 |
-1,462 |
+10.8% |
Salaries
and related costs |
-2,031 |
-1,968 |
+3.2% |
-7,759 |
-7,620 |
+1.8% |
Taxes other
than income taxes |
-39 |
-36 |
+8.9% |
-166 |
-158 |
+5.2% |
Other
income and expenses |
222 |
172 |
+28.7% |
851 |
862 |
-1.3% |
EBITDA |
776 |
970 |
-20.0% |
4,217 |
4,763 |
-11.5% |
Amortization, depreciation and provisions |
-736 |
-742 |
-0.8% |
-2,885 |
-2,840 |
+1.6% |
Income from current operations |
40 |
228 |
-82.4% |
1,332 |
1,923 |
-30.7% |
Sales of
aircraft equipment |
5 |
-1 |
nm |
4 |
18 |
-77.5% |
Other
non-current income and expenses |
-11 |
-1,599 |
-99.3% |
-16 |
-1,925 |
-99.2% |
Income from operating activities |
34 |
-1,372 |
nm |
1,320 |
16 |
+8,152.9% |
Cost of
financial debt |
-111 |
-127 |
-12.4% |
-465 |
-570 |
-18.4% |
Income from
cash and cash equivalent |
10 |
7 |
+41.2% |
39 |
34 |
+14.7% |
Net cost of financial debt |
-101 |
-120 |
-15.7% |
-426 |
-536 |
-20.5% |
Other
financial income and expenses |
-136 |
111 |
nm |
-271 |
649 |
nm |
Income before tax |
-203 |
-1,381 |
-85.3% |
623 |
129 |
+382.9% |
Income
taxes |
-24 |
446 |
nm |
-227 |
21 |
nm |
Net income of consolidated companies |
-227 |
-935 |
-75.7% |
396 |
150 |
+164.0% |
Share of
profits (losses) of associates |
9 |
5 |
+85.7% |
15 |
21 |
-29.4% |
Income from continuing operations |
-218 |
-930 |
-76.6% |
411 |
171 |
+140.4% |
Net income
from discontinued operations |
0 |
0 |
-100.0% |
0 |
-8 |
-100.0% |
Net income for the period |
-218 |
-930 |
-76.6% |
411 |
163 |
+152.1% |
Non-controlling interest |
0 |
2 |
-100.0% |
-2 |
0 |
nm |
Net income for the period - Group part |
-218 |
-928 |
-76.5% |
409 |
163 |
+150.9% |
Consolidated
Balance Sheet
Assets |
31 Dec
2018 |
31 Dec 2017 |
In
million euros |
Goodwill |
217 |
216 |
Intangible
assets |
1,194 |
1,122 |
Flight
equipment |
10,167 |
9,636 |
Other
property, plant and equipment |
1,503 |
1,418 |
Right-of-use assets |
5,243 |
5,724 |
Investments
in equity associates |
311 |
301 |
Pension
assets |
331 |
590 |
Other
financial assets |
1,487 |
1,242 |
Deferred
tax assets |
544 |
417 |
Other
non-current assets |
264 |
239 |
Total non-current assets |
21,261 |
20,905 |
Assets held
for sale |
0 |
0 |
Other
short-term financial assets |
325 |
421 |
Inventories |
633 |
557 |
Trade
receivables |
2,191 |
2,164 |
Other
current assets |
1,062 |
1,243 |
Cash and
cash equivalents |
3,585 |
4,673 |
Total current assets |
7,796 |
9,058 |
Total assets |
29,057 |
29,963 |
Liabilities and equity |
31 Dec 2018 |
31 Dec 2017 |
In
million euros |
Issued
capital |
429 |
429 |
Additional
paid-in capital |
4,139 |
4,139 |
Treasury
shares |
-67 |
-67 |
Perpetual |
403 |
600 |
Reserves
and retained earnings |
-3,051 |
-2,693 |
Equity attributable to equity holders of Air
France-KLM |
1,853 |
2,408 |
Non-controlling interests |
12 |
12 |
Total Equity |
1,865 |
2,420 |
Pension
provisions |
2,098 |
2,202 |
Return
obligation liability and other provisions |
3,035 |
3,055 |
Financial
debt |
5,733 |
5,919 |
Lease
debt |
3,546 |
3,940 |
Deferred
tax liabilities |
4 |
12 |
Other
non-current liabilities |
459 |
361 |
Total non-current liabilities |
14,875 |
15,489 |
Return
obligation liability and other provisions |
492 |
230 |
Current
portion of financial debt |
826 |
1,378 |
Current
portion of lease debt |
989 |
993 |
Trade
payables |
2,460 |
2,365 |
Deferred
revenues on ticket sales |
3,153 |
3,017 |
Frequent
flyer programs |
844 |
819 |
Other
current liabilities |
3,548 |
3,246 |
Bank
overdrafts |
5 |
6 |
Total current liabilities |
12,317 |
12,054 |
Total equity and liabilities |
29,057 |
29,963 |
Consolidated
Statement of Cash Flows from 1st January
until 31st December
2018
In
million euros |
31 Dec
2018 |
30 Sep 2017 |
Net income
from continuing operations |
411 |
171 |
Net income
from discontinued operations |
0 |
-8 |
Amortization, depreciation and operating provisions |
2,885 |
2,840 |
Financial
provisions |
127 |
129 |
Loss (gain)
on disposals of tangible and intangible assets |
-33 |
-35 |
Loss
(gain)on disposals of subsidiaries and associates |
0 |
-31 |
Derivatives
- non monetary result |
-49 |
41 |
Unrealized
foreign exchange gains and losses, net |
190 |
-790 |
Impairment |
0 |
0 |
Other
non-monetary items |
-254 |
1,564 |
Share of
(profits) losses of associates |
-15 |
-21 |
Deferred
taxes |
204 |
-52 |
Financial Capacity |
3,466 |
3,808 |
Of which discontinued operations |
0 |
0 |
(Increase)
/ decrease in inventories |
-31 |
5 |
(Increase)
/ decrease in trade receivables |
-39 |
-331 |
Increase /
(decrease) in trade payables |
69 |
68 |
Change in
other receivables and payables |
247 |
549 |
Change in working capital requirements |
246 |
291 |
Change in working capital from discontinued
operations |
0 |
0 |
Net cash flow from operating activities |
3,712 |
4,099 |
Purchase of
property, plant and equipment and intangible assets |
-2,758 |
-2,562 |
Proceeds on
disposal of property, plant and equipment and intangible
assets |
133 |
124 |
Proceeds on
disposal of subsidiaries, of shares in non-controlled entities |
6 |
8 |
Acquisition
of subsidiaries, of shares in non-controlled entities |
-9 |
-9 |
Dividends
received |
6 |
9 |
Decrease
(increase) in net investments, more than 3 months |
4 |
-262 |
Net cash flow used in investing activities of discontinued
operations |
0 |
0 |
Net cash flow used in investing activities |
-2,618 |
-2,692 |
Increase of
capital |
0 |
747 |
Perpetual
(including premium) |
-211 |
0 |
Issuance of
debt |
539 |
741 |
Repayment
on financial debt |
-1,400 |
-1,023 |
Payments on
leases debt |
-972 |
-984 |
Decrease
(increase ) in loans, net |
-106 |
-83 |
Dividends
and coupons on perpetual paid |
-38 |
-38 |
Net cash flow used in financing activities of discontinued
operations |
0 |
0 |
Net cash flow from financing activities |
-2,188 |
-640 |
Effect of
exchange rate on cash and cash equivalents and bank overdrafts |
7 |
-33 |
Effect of exch. rate on cash and cash eq. and bank
overdrafts of disc. ops. |
0 |
0 |
Change in cash and cash equivalents and bank
overdrafts |
-1,087 |
734 |
Cash and
cash equivalents and bank overdrafts at beginning of period |
4,667 |
3,933 |
Cash and
cash equivalents and bank overdrafts at end of period |
3,580 |
4,667 |
Change in treasury of discontinued operations |
0 |
0 |
Key Performance
Indicators
EBITDA
|
Fourth
Quarter |
Full Year |
In
millions euros |
2018 |
2017 |
2018 |
2017 |
Income
from current operations |
40 |
228 |
1,332 |
1,923 |
Amortization, depreciation and provisions |
736 |
742 |
2,885 |
2,840 |
EBITDA |
776 |
970 |
4,217 |
4,763 |
Restated net
income - Group part
|
Fourth
Quarter |
Full Year |
In
million euros |
2018 |
2017 |
2018 |
2017 |
Net income
- Group part |
-218 |
-928 |
409 |
163 |
Net income
from discontinued operations |
0 |
0 |
0 |
8 |
Unrealized
foreign exchange gains and losses, net |
72 |
-115 |
23 |
-790 |
Change in
fair value of financial assets and liabilities (derivatives) |
21 |
-28 |
-53 |
-43 |
Non-current
income and expenses |
6 |
1,600 |
12 |
1,907 |
Depreciation of shares available for sale |
-17 |
-431 |
18 |
-320 |
De-recognition of deferred tax assets |
0 |
0 |
0 |
0 |
Restated net income - Group part |
-136 |
98 |
409 |
925 |
Coupons on
perpetual |
-7 |
-7 |
-25 |
-25 |
Restated net income - Group part, including coupons on
perpetual (used to calculate earnings per share) |
-143 |
91 |
384 |
900 |
Restated
net income per share (in €) |
-0.33 |
0.22 |
0.90 |
2.43 |
Return on capital employed
(ROCE)1
In
million euros |
31 Dec
2018 |
31 Dec 2017 |
31 Dec 2017 |
31 Dec 2016 |
Goodwill
and intangible assets |
1,410 |
1,338 |
1,338 |
1,285 |
Flight
equipment |
10,167 |
9,636 |
9,636 |
8,760 |
Other
property, plant and equipment |
1,503 |
1,418 |
1,418 |
1,400 |
Right of
use assets |
5,243 |
5,724 |
5,724 |
5,558 |
Investments
in equity associates |
311 |
301 |
301 |
292 |
Financial
assets excluding shares available for sale, marketable securities
and financial deposits |
133 |
113 |
113 |
107 |
Provisions,
excluding pension, cargo litigation and restructuring |
-3,141 |
-2,779 |
-2,779 |
-2,763 |
WCR,
excluding market value of derivatives |
-6,124 |
-5,899 |
-5,899 |
-5,582 |
Capital employed |
9,502 |
9,852 |
9,852 |
9,057 |
Average capital employed (A) |
9,677 |
9,455 |
Income from
current operations |
1,332 |
1,923 |
- Dividends
received |
-2 |
-3 |
- Share of
profits (losses) of associates |
15 |
21 |
- Normative
income tax |
-400 |
-577 |
Income from current operations after tax (B) |
945 |
1,364 |
ROCE, trailing 12 months (B/A) |
9.8% |
14.4% |
Net debt
|
Balance
sheet at |
In
million euros |
31 Dec 2018 |
31 Dec 2017 |
Financial
debt |
6,216 |
6,955 |
Lease
debt |
4,450 |
4,847 |
Financial
assets pledged (OCEANE swap) |
0 |
0 |
Currency
hedge on financial debt |
7 |
19 |
Accrued
interest |
-67 |
-76 |
Gross financial debt (A) |
10,606 |
11,745 |
Cash and
cash equivalents |
3,585 |
4,673 |
Marketable
securities |
74 |
73 |
Cash
pledges |
265 |
269 |
Deposits
(bonds) |
522 |
379 |
Bank
overdrafts |
-5 |
-6 |
Other |
1 |
-2 |
Net cash (B) |
4,442 |
5,386 |
Net debt (A) - (B) |
6,164 |
6,359 |
Adjusted
operating free cash flow
|
Fourth
Quarter |
Full Year |
In
million euros |
2018 |
2017 |
2018 |
2017 |
Net cash
flow from operating activities, continued operations |
807 |
711 |
3,712 |
4,099 |
Investment
in property, plant, equipment and intangible assets |
-620 |
-615 |
-2,758 |
-2,562 |
Proceeds on
disposal of property, plant, equipment and intangible assets |
37 |
40 |
133 |
124 |
Operating free cash flow |
224 |
136 |
1,087 |
1,661 |
Payments
on lease debt |
-236 |
-238 |
-972 |
-984 |
Adjusted operating free cash flow |
-12 |
-102 |
115 |
677 |
Unit cost: net cost per
EASK
|
Fourth
Quarter |
Full Year |
|
2018 |
2017 |
2018 |
2017 |
Revenues
(in €m) |
6,538 |
6,278 |
26,515 |
25,867 |
Income/(loss) from current operations (in €m) |
-40 |
-228 |
-1,332 |
-1,923 |
Total
operating expense (in €m) |
6,497 |
6,050 |
25,182 |
23,944 |
Passenger
network business - other revenues (in €m) |
-243 |
-184 |
-912 |
-764 |
Cargo
business - other revenues (in €m) |
-81 |
-73 |
-300 |
-266 |
Third-party
revenues in the maintenance business (in €m) |
-490 |
-465 |
-1,920 |
-1,801 |
Transavia -
other revenues (in €m) |
-2 |
-5 |
-13 |
-14 |
Third-party
revenues of other businesses (in €m) |
-10 |
-11 |
-38 |
-42 |
Net cost (in €m) |
5,671 |
5,312 |
21,999 |
21,057 |
Capacity
produced, reported in EASK* |
89,142 |
85,951 |
360,049 |
351,695 |
Net cost per EASK (in € cents per EASK) |
6.36 |
6.18 |
6.11 |
5.99 |
Gross change |
|
3.0% |
|
2.1% |
Currency
effect on net costs (in €m) |
|
27 |
|
-343 |
Change at constant currency |
|
2.5% |
|
3.8% |
Fuel price
effect (in €m) |
|
198 |
|
665 |
Change on a constant currency and fuel price basis |
|
-1.0% |
|
0.6% |
Change in
pension-related expenses (in €m) |
|
-10 |
|
4 |
Net cost per EASK on a constant currency, fuel price and
pension-related expenses basis (in € cents per EASK) |
6.36 |
6.42 |
6.11 |
6.07 |
Change on a constant currency, fuel price
and pension-related expenses basis |
|
-0.9% |
|
+0.6% |
* The capacity produced by the
transportation activities is combined by adding the capacity of the
Passenger network (in ASK) to that of Transavia (in ASK) and the
Cargo business (in ATK) converted into EASK based on a separate
fixed factor for Air France and for KLM.
Airline results
Air France Group |
Fourth
Quarter |
Full Year |
|
2018 |
Change |
2018 |
Change |
Revenue
(in €m) |
4,014 |
+3.7% |
16,073 |
+1.2% |
EBITDA (in
€m) |
412 |
-194 |
2,107 |
-597 |
Operating
result (en m€) |
-62 |
-179 |
266 |
-597 |
Operating margin (%) |
-1.5% |
-4.6 pt |
1.7% |
-3.8 pt |
Operating
cash flow before WCR and restructuring cash out (in €m) |
273 |
-186 |
1,792 |
-502 |
Operating cash flow (before WCR and restructuring)
margin |
6.8% |
-5.1 pt |
11.1% |
-3.3 pt |
KLM Group
KLM Group |
Fourth
Quarter |
Full Year |
|
2018 |
Change |
2018 |
Change |
Revenue
(in €m) |
2,663 |
+5.1% |
10,955 |
+5.0% |
EBITDA (in
€m) |
371 |
+9 |
2,105 |
+41 |
Operating
result (en m€) |
112 |
+0 |
1,073 |
-6 |
Operating margin (%) |
4.2% |
-0.2 pt |
9.8% |
-0.6 pt |
Operating
cash flow before WCR and restructuring cash out (in €m) |
302 |
+109 |
1,792 |
+94 |
Operating cash flow (before WCR and restructuring)
margin |
11.3% |
+3.7 pt |
16.4% |
+0.1 pt |
NB: Sum of individual airline
results does not add up to Air France-KLM total due to intercompany
eliminations at Group level
Group fleet at 31 December 2018
Aircraft type |
AF
(incl. HOP) |
KLM
(incl. KLC & MP) |
Transavia |
Owned |
Finance lease |
Operating lease |
Total |
In operation |
Change / 31/12/17 |
B747-400 |
|
11 |
|
11 |
|
|
11 |
11 |
-2 |
B777-300 |
43 |
14 |
|
11 |
24 |
22 |
57 |
57 |
|
B777-200 |
25 |
15 |
|
24 |
1 |
15 |
40 |
40 |
|
B787-9 |
7 |
13 |
|
5 |
3 |
12 |
20 |
20 |
5 |
A380-800 |
10 |
|
|
1 |
4 |
5 |
10 |
10 |
|
A340-300 |
6 |
|
|
6 |
|
|
6 |
6 |
-1 |
A330-300 |
|
5 |
|
|
|
5 |
5 |
5 |
|
A330-200 |
15 |
8 |
|
11 |
|
12 |
23 |
23 |
|
Total Long-Haul |
106 |
66 |
0 |
69 |
32 |
71 |
172 |
172 |
2 |
B737-900 |
|
5 |
|
1 |
1 |
3 |
5 |
5 |
|
B737-800 |
|
27 |
67 |
25 |
10 |
59 |
94 |
93 |
6 |
B737-700 |
|
18 |
7 |
4 |
6 |
15 |
25 |
25 |
-1 |
A321 |
20 |
|
|
11 |
|
9 |
20 |
20 |
|
A320 |
43 |
|
|
3 |
5 |
35 |
43 |
43 |
1 |
A319 |
34 |
|
|
19 |
2 |
13 |
34 |
34 |
-4 |
A318 |
18 |
|
|
14 |
4 |
|
18 |
18 |
|
Total Medium-Haul |
115 |
50 |
74 |
77 |
28 |
134 |
239 |
238 |
2 |
ATR72-600 |
6 |
|
|
|
|
6 |
6 |
6 |
|
ATR72-500 |
1 |
|
|
|
|
1 |
1 |
1 |
-2 |
ATR42-500 |
6 |
|
|
2 |
|
4 |
6 |
5 |
-6 |
Canadair
Jet 1000 |
14 |
|
|
14 |
|
|
14 |
14 |
|
Canadair
Jet 700 |
11 |
|
|
11 |
|
|
11 |
8 |
-3 |
Embraer
190 |
11 |
32 |
|
7 |
14 |
22 |
43 |
42 |
2 |
Embraer
175 |
|
17 |
|
3 |
14 |
|
17 |
17 |
5 |
Embraer
170 |
15 |
|
|
9 |
1 |
5 |
15 |
15 |
|
Embraer
145 |
18 |
|
|
14 |
4 |
|
18 |
13 |
|
Total Regional |
82 |
49 |
0 |
60 |
33 |
38 |
131 |
121 |
-4 |
B747-400ERF |
|
3 |
|
3 |
|
|
3 |
3 |
|
B747-400BCF |
|
1 |
|
1 |
|
|
1 |
1 |
|
B777-F |
2 |
|
|
2 |
|
|
2 |
2 |
|
Total Cargo |
2 |
4 |
0 |
6 |
0 |
0 |
6 |
6 |
0 |
|
|
|
|
|
|
|
|
|
|
Total |
305 |
169 |
74 |
212 |
93 |
243 |
548 |
537 |
0 |
[1] Since 1 January 2018, the Air France-KLM Group has
applied the new IFRS 9, 15 and 16 accounting standards. For the
purposes of comparison, the Group's consolidated financial
statements have been restated as of 1 January 2017.
[2] Passenger and Transavia, change at constant
currency
1 Net income - group part one-off elements:
- Positive effect after tax of €47 million in Q4
2017 and €386 million in FY 2017 resulting from IFRS 16 restatement
of lease debt in dollars
- Non current expense impact of €233 after
tax in Q3 2017 (Cabin) and €1,195 million after tax in Q4 2017
(Pilot) related
to
KLM pension plan de-recognition.
Excluding these one-offs, the change of Net income
- group part Q4 2018 is €-438 million compared to last year and
-€796 million for the Full Year 2018 compared to last year.
1 To align with industry practice, the metric EASK will not
be used anymore as of 2019.
New Unit Cost definition will be: Net cost per
Available Seat Kilometer at constant fuel and
currency
The impact of this change should be approximately
-0.1pt for 2019
2 Based on the forward curves of 15 February 2019, 2019
average Brent price of USD 65, average jet fuel price of USD 693
per ton including into plane costs. Assuming exchange rate of
EUR/USD of 1.14 in 2019
1 The ROCE
definition has been updated within the framework of IFRS 16
implementation. The asset value linked to the aircraft lease
contracts now corresponds to the net book value of the right-of-use
asset of all the lease contracts. Moreover, the "operating result,
adjusted for operating leases" no longer existing having been
replaced by "income from current operations" which, thanks to IFRS
16 implementation, no longer includes the financial cost of lease
contracts. Finally, the Group now uses a normative income tax rate,
calculated according to the tax rates applied in France and in the
Netherlands.
AIR FRANCE-KLM FULL YEAR 2018
RESULTS
This
announcement is distributed by West Corporation on behalf of West
Corporation clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: AIR FRANCE - KLM via Globenewswire
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