Results as at 30 September 2019
31 October 2019
RESULTS AS AT 30 SEPTEMBER
2019Resilient operating result at 900
million euros in a challenging macro-economic context |
THIRD QUARTER 2019
- Passenger growth up 2.1% and load factor up 0.2 point.
- Passenger unit revenue slightly down by -0.6%, as a consequence
of the macro-economic context.
- Unit costs slightly increase by 0.4% at constant currency
and fuel, on track for full year guidance.
- Operating result at 900 million euros, down by 165 million
euros compared to the third quarter 2018, with revenues up 2% and
fuel expenses up 135 million euros.
- Net income at 366 million euros, down by 420 million euros
compared to last year impacted by a stronger dollar end of
September and Airbus A380 phase-out financial impact of 100 million
euros.
- Reduction in Group net debt, down by 253 million euros to 5.9
billion euros and Net debt/EBITDA ratio at 1.5x, stable compared to
31 December 2018.
OUTLOOK 2019
- Based on the current data for the Passenger network:
- Long-haul forward booking load factors from November to March
are on average ahead compared to last year.
- Network passenger unit revenue for the fourth quarter 2019 at
constant currency expected to be slightly down compared to last
year.
- Full year guidance update:
- The Group will pursue initiatives to reduce unit costs, with a
targeted 2019 reduction of between -1% and 0% at constant currency
and fuel price.
- The 2019 fuel bill is expected to increase by 600 million euros
compared to 2018 to 5.5 billion euros, based on the forward curve
of 25 October 2019.
- Net debt/ EBITDA ratio at/below 1.5x.
“Air France-KLM Group’s performance in the third
quarter showed resilience amid geopolitical uncertainties and
softening macro-economic environment.” said Benjamin Smith, CEO of
Air France-KLM Group. “Operationally, we achieved a solid
performance during the Summer peak travel period. Air France
and KLM ranked in the top European legacy carriers in terms of
punctuality. Based on long-haul forward bookings on average ahead
of last year and renewed commitment to a strict cost discipline, we
are confident that we can deliver on our annual objectives of
reduced unit cost and stable leverage ratio. All the Group’s
employees are mobilized to ensure the success of our strategic
ambitions, which we will further outline on the occasion of the
upcoming Investor Day next week.”
Air France-KLM Group |
Third quarter |
Nine months |
2019 |
Change |
2019 |
Change |
Passengers (thousands) |
29,119 |
+2.1% |
79,593 |
+3.4% |
Passenger Unit revenue per ASK1 (€ cts) |
7.08 |
-0.6% |
6.69 |
-0.5% |
Operating result (€m) |
900 |
-165 |
997 |
-295 |
Net income – Group part (€m) |
366 |
-420 |
126 |
-501 |
Adj. operating free cash flow (€m) |
-235 |
-221 |
116 |
-11 |
Net debt at end of period (€m) |
|
|
5,911 |
-253 |
Third quarter 2019 business review
Network: Softer Passenger demand, Cargo
industry still under pressure
Network |
Third quarter |
Nine months |
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Total revenues (€m) |
6,460 |
+0.5% |
-0.7% |
17,651 |
+2.5% |
+1.4% |
Scheduled revenues (€m) |
6,151 |
+0.9% |
-0.4% |
16,752 |
+2.6% |
+1.3% |
Operating result (€m) |
649 |
-161 |
-180 |
660 |
-300 |
-249 |
Third quarter 2019 revenues decreased by -0.7%
at constant currency to 6.5 billion euros, mostly impacted by cargo
industry pressure. The operating result amounted to 649 million
euros, a 180 million euro decrease at constant currency compared to
last year, mainly explained by rise of fuel expenses besides
revenue pressure.
Passenger network: French domestic unit
revenue lifted by capacity reduction, and Long-Haul impacted by
trading environment and a high year on year comparison
base
|
Third quarter |
Nine months |
Passenger network |
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Passengers (thousands) |
23,627 |
+1.1% |
|
66,278 |
+2.7% |
|
Capacity (ASK m) |
79,443 |
+1.6% |
|
224,889 |
+2.6% |
|
Traffic (RPK m) |
71,317 |
+1.8% |
|
198,558 |
+3.1% |
|
Load factor |
89.8% |
+0.2
pt |
|
88.3% |
+0.4
pt |
|
Total passenger revenues (€m) |
5,947 |
+1.4% |
+0.3% |
16,057 |
+3.2% |
+2.1% |
Scheduled passenger revenues (€m) |
5,714 |
+1.9% |
+0.6% |
15,388 |
+3.3% |
+2.1% |
Unit revenue per ASK (€ cts) |
7.19 |
+0.3% |
-0.9% |
6.84 |
+0.7% |
-0.5% |
Third quarter 2019 capacity increased moderately
by 1.6%, mainly driven by the South American, North Atlantic and
Asian networks, with respective growth of 4.2%, 4.1% and 3.0%.
- The North American network posted negative unit revenue at
-1.8% compared to last year, caused by an environment of lower
booking-volumes and high competitive pressure. Yield development in
point to sale USA is still positive and stronger than yield
development in point of sale Europe.
- The Asian network unit revenue was down by 2.8% in the third
quarter 2019, notably impacted by weak China and Hong-Kong
traffic.
- The Caribbean & Indian Ocean network posted a continuing
strong result with unit revenue at +5.3%, supported by peak period
leisure demand.
- The Africa & Middle East network saw an unit revenue
improvement of 1.9%, underpinned by West African oil and gas
countries solid performance combined with improvement thanks to
network rationalizations in the Middle East.
- The unit revenue pressure in the Latin American network remains
ongoing for the time-being due to the current economic context in
Argentina and Brazil.
The medium-haul hubs showed a resilient
performance despite a strong capacity increase. French domestic
network posted unit revenue up 4.0%, lifted by capacity reductions
in the route network.
Cargo network: Unit revenue still
impacted by a challenging airfreight market
|
Third quarter |
Nine months |
Cargo business |
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Tons (thousands) |
274 |
-5.3% |
|
823 |
-1.3% |
|
Capacity (ATK m) |
3,816 |
+0.8% |
|
10,895 |
+1.5% |
|
Traffic (RTK m) |
2,091 |
-5.1% |
|
6,259 |
-1.2% |
|
Load factor |
54.8% |
-3.4
pt |
|
57.4% |
-1.6
pt |
|
Total Cargo revenues (€m) |
514 |
-9.3% |
-10.7% |
1,594 |
-3.6% |
-5.5% |
Scheduled cargo revenues (€m) |
437 |
-11.0% |
-12.3% |
1,364 |
-4.9% |
-6.8% |
Unit revenue per ATK (€ cts ) |
11.44 |
-11.8% |
-13.1% |
12.52 |
-6.3% |
-8.2% |
Airfreight capacity is for another quarter
significantly higher than the demand development, putting pressure
on load factor and yield.The demand is suffering from weakness in
global trade, resulting in unit revenue down -13.1% at constant
currency. The Group’s Cargo strategy is focused on maintaining and
increasing load factors where possible and taking a pro-active
approach to new revenue opportunities.
Transavia: High capacity growth and
positive unit revenue
|
Third quarter |
Nine months |
Transavia |
2019 |
Change |
2019 |
Change |
Passengers (thousands) |
5,492 |
+6.4% |
13,315 |
+6.7% |
Capacity (ASK m) |
10,874 |
+7.9% |
26,227 |
+9.1% |
Traffic (RPK m) |
10,117 |
+8.1% |
24,239 |
+9.2% |
Load factor |
93.0% |
+0.2 pt |
92.4% |
+0.1 pt |
Total passenger revenues (€m) |
683 |
+11.1% |
1,431 |
+9.9% |
Unit revenue per ASK (€ cts) |
6.28 |
+3.0% |
5.43 |
+1.1% |
Unit cost per ASK (€ cts) |
4.69 |
+8.4% |
4.84 |
+4.9% |
Operating result (€m) |
173 |
-5 |
154 |
-27 |
Strong capacity growth of 7.9% in the third
quarter 2019. The third quarter operating margin stands at a level
of 25.3%, with an absolute operating result of 173 million euros, 5
million euros down compared to last year. The unit revenue was up
by 3.0% compared to last year, supported by a strong demand
throughout the network and a good ancillary revenue performance.
Unit cost in the third quarter at +8.4% compared to last year,
+6.0% at constant fuel and currency, explained by temporary
increased fleet- and non-performance expenditures.
Maintenance: Strong third-party revenue growth and
operating result stable
|
Third quarter |
Nine months |
Maintenance |
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Total revenues (€m) |
1,163 |
+9.6% |
|
3,453 |
+9.9% |
|
Third-party revenues (€m) |
543 |
+11.0% |
+7.2% |
1,623 |
+13.5% |
+7.4% |
Operating result (€m) |
75 |
-2 |
-6 |
177 |
28 |
13 |
Operating margin (%) |
6.4% |
-0.8 pt |
-1.0 pt |
5.1% |
+0.4 pt |
+0.1 pt |
Maintenance revenues increased compared to last
year with third-party revenues up by 11.0% and 7.2% at constant
currency, a continuation of the growth trend underpinned by the
inflow of new contracts. The Maintenance order book stood at 11.5
billion dollars at 30 September 2019, stable compared to 31
December 2018. The operating margin expressed as a percentage of
total revenues stood at 6.4%, a decrease of 0.8 point impacted by
airlines bankruptcies.
Air France-KLM Group: Operating result
at 900 million euros with revenues up 2% and fuel expenses up 135
million euros
|
Third quarter |
Nine months |
|
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Capacity (ASK m) |
90,323 |
+2.3% |
|
251,116 |
+3.2% |
|
Traffic (RPK m) |
81,434 |
+2.6% |
|
222,798 |
+3.7% |
|
Passenger unit revenue per ASK (€ cts) |
7.08 |
+0.5% |
-0.6% |
6.69 |
+0.6% |
-0.5% |
Group unit revenue per ASK (€ cts) |
7.57 |
-0.5% |
-1.6% |
7.24 |
-0.1% |
-1.3% |
Group unit cost per ASK (€ cts) at constant fuel |
6.57 |
+1.4% |
+0.4% |
6.84 |
+0.8% |
-0.7% |
Revenues (€m) |
7,696 |
+2.0% |
+0.8% |
20,732 |
+3.8% |
+2.3% |
EBITDA (€m) |
1,647 |
-7.0% |
-8.2% |
3,218 |
-6.5% |
-5.3% |
Operating result (€m) |
900 |
-15.5% |
-17.4% |
997 |
-22.8% |
-20.5% |
Operating margin (%) |
11.7% |
-2.4
pt |
-2.6 pt |
4.8% |
-1.7
pt |
-1.4 pt |
Net income - Group part (€m) |
366 |
-420 |
|
126 |
-501 |
|
In the third quarter 2019, the Air France-KLM
Group posted an operating result of 900 million euros, down by 165
million euros compared to last year, impacted by trading
environment and fuel bill increase.
Net income amounted for 366 million euros in the
third quarter 2019, a decrease of 420 million euros compared to
last year, including non-operating cost impact related to Airbus
A380 phase-out of 100 million euros and effects on currency hedge
portfolio related to a stronger US dollar and Japanese Yen.
The fuel bill including hedging amounted to
1,512 million euros for the third quarter 2019, up 135 million
euros. This increase is mainly explained by a hedging loss of 50
million euros in this quarter compared to a hedging gain of 100
million euros last year, and a negative currency effect on the fuel
bill of 48 million euros due to a stronger dollar.
Currencies had a positive 92 million euro impact
on revenues and a negative 20 million euro effect on costs
(ex-fuel) including currency hedging.
Third quarter 2019 unit cost at +0.4%,
annual unit cost result on track for full year guidance On
a constant currency and fuel price basis, unit costs were up +0.4%
in the third quarter 2019. The Group had a ramp up of Pilots hiring
over the past 12 months, supporting the 2020 capacity growth
plan.
Group net employee costs were up 5.0% in the
quarter compared to last year, explained by additional hires in
response to the capacity growth and the impact of wage agreement
implementation for Air France and KLM staff. The average number of
FTEs (Full-time equivalent) in the third quarter 2019 increased by
1,600 compared to last year, including an additional 600 Pilots and
850 Cabin Crew. However, productivity measured in ASK per FTE
increased by 0.4% in the third quarter 2019. Net debt down,
leverage ratio stable, on track for full year guidance at/below
1.5x
|
Third quarter |
Nine months |
In € million |
2019 |
Change |
2019 |
Change |
Cash flow before change in WCR and Voluntary Departure Plans,
continuing operations (€m) |
1,514 |
-80 |
2,979 |
-49 |
Cash out related to Voluntary Departure Plans (€m) |
-22 |
-10 |
-33 |
+100 |
Change in Working Capital Requirement (WCR) (€m) |
-715 |
+108 |
72 |
+62 |
Net cash flow from operating activities
(€m) |
777 |
18 |
3,018 |
113 |
Net investments * (€m) |
-765 |
-211 |
-2,154 |
-112 |
Operating free cash flow
(€m) |
12 |
-193 |
864 |
1 |
Repayment of lease debt |
-247 |
-28 |
-748 |
-12 |
Adjusted operating free cash flow ** |
-235 |
-221 |
116 |
-11 |
* 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 flow” is
operating free cash flow with deduction of the repayment of lease
debt.
A lease debt reduction of 247 million
euros and an adjusted operating free cash flow negative at -235
million eurosThe Group generated a negative adjusted
operating free cash flow of -235 million euros, a decrease of 221
million euros compared to last year, explained by higher capex in
the third quarter 2019.
The year-to-date lease debt amounted for 4,399
million euros, down by 136 million euros compared to the end of
2018.
Leverage on track with full year guidance at/below
1.5x
In € million |
30 Sep 2019 |
31 Dec 2018 |
Net debt |
5,911 |
6,164 |
EBITDA
trailing 12 months |
3,994 |
4,217 |
Net debt/EBITDA trailing 12
months |
1.5 x |
1.5 x |
The Group reduced its net debt to 5,911 million
euros at 30 September 2019 compared to 6,164 million euros at 31
December 2018, this 253 million euro reduction is driven by the
repayment of lease debt.The net debt/EBITDA ratio stood at 1.5x at
30 September 2019, a stable situation, explained by the reduction
in net debt and EBITDA.
Air France and KLM both impacted by lower unit revenues
and rise in fuel costs
|
Third quarter |
Nine months |
|
2019 |
Change |
2019 |
Change |
Air France Group Operating result (€m) |
383 |
-110 |
270 |
-58 |
Operating margin (%) |
8.2% |
-2.5 pt |
2.1% |
-0.6 pt |
KLM Group Operating result (€m) |
512 |
-61 |
714 |
-246 |
Operating margin (%) |
16.2% |
-2.2 pt |
8.5% |
-3.1 pt |
Outlook
The global economic and geopolitical context
remains uncertain and the Group operates in a highly competitive
marketplace. Based on the current data for the
Passenger network:
- October 2019 load factor is expected to remain stable compared
to last year.
- Long-haul forward booking load factors from November to March
are on average ahead compared to last year.
- Network passenger unit revenue for the fourth quarter 2019 at
constant currency expected to be slightly down compared to last
year.
Capacity growth update:
- The growth of Transavia France adjusted slightly downwards,
Transavia is expected to grow at a sustainable pace of 6% to 8% for
full year 2019.
- Passenger network plan remains unchanged to moderately grow
capacity by 2% to 3% for the full year 2019 compared to last
year.
Full year guidance update:
- The Group will pursue initiatives to reduce unit costs1, with a
targeted 2019 reduction between -1% to 0% at constant currency and
fuel price.
- The 2019 fuel bill is expected to increase by 600 million euros
compared to 2018 to 5.5 billion euros2, based on the forward curve
of 25 October 2019.
- The Group plans capital expenditure of 3.3 billion euros for
2019, slightly higher compared to the previous guidance including a
change in accounting treatment for some assets, pre-delivery
payment of Airbus A220 and acquire instead of leasing spare
engines.
- Air France-KLM is targeting a Net debt/EBITDA ratio at/below
1.5x.
*****
The results presentation is available at
www.airfranceklm.com on 31 October 2019 from 7:15
am CET.
A conference call hosted by Mr. Gagey (CFO) will be held on 31
October 2019 at 08.30.
To connect to the conference call, please dial:
France: Local +33 (0)1 70 72 25 50Netherlands:
Local +31 (0) 20 703 8211UK: Local +44 (0)330 336 9126US: Local +1
720 543 0214
Confirmation code: 9498209
To listen to the audio-replay of the conference
call, please dial:
- France: Local +33 (0) 1 70 48 00 94
- Netherlands: Local +31 (0) 20 721 8903
- UK: Local +44 (0)207 660 0134
- US: Local +1 719-457-0820
Investor
Relations
PressOlivier
Gall
Wouter van
Beek
+33 1 49 89 52
59
+33 1 49 89 52
60
+33 1 41 56 56
00olgall@airfranceklm.com
Wouter-van.Beek@airfranceklm.com
Income Statement
|
Third quarter |
Nine months |
In millions euros |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
Sales |
7,696 |
7,544 |
+2.0% |
20,732 |
19,976 |
+3.8% |
Other revenues |
0 |
1 |
-100.0% |
0 |
1 |
-100.0% |
Revenues |
7,696 |
7,545 |
+2.0% |
20,732 |
19,977 |
+3.8% |
Aircraft
fuel |
-1,512 |
-1,377 |
+9.8% |
-4,117 |
-3,622 |
+13.7% |
Chartering costs |
-138 |
-158 |
-12.7% |
-407 |
-434 |
-6.2% |
Landing
fees and en route charges |
-530 |
-513 |
+3.3% |
-1,471 |
-1,419 |
+3.7% |
Catering |
-222 |
-211 |
+5.2% |
-617 |
-586 |
+5.3% |
Handling
charges and other operating costs |
-531 |
-501 |
+6.0% |
-1,440 |
-1,481 |
-2.8% |
Aircraft
maintenance costs |
-625 |
-586 |
+6.7% |
-1,923 |
-1,769 |
+8.7% |
Commercial and distribution costs |
-266 |
-266 |
+0.0% |
-783 |
-776 |
+0.9% |
Other
external expenses |
-420 |
-399 |
+5.3% |
-1,292 |
-1,223 |
+5.6% |
Salaries
and related costs |
-2,011 |
-1,916 |
+5.0% |
-6,031 |
-5,728 |
+5.3% |
Taxes
other than income taxes |
-26 |
-40 |
-35.0% |
-119 |
-127 |
-6.3% |
Other
income and expenses |
232 |
193 |
+20.2% |
686 |
629 |
+9.1% |
EBITDA |
1,647 |
1,771 |
-7.0% |
3,218 |
3,441 |
-6.5% |
Amortization, depreciation and provisions |
-747 |
-707 |
+5.7% |
-2,221 |
-2,149 |
+3.4% |
Income from current operations |
900 |
1,065 |
-15.5% |
997 |
1,292 |
-22.8% |
Sales of
aircraft equipment |
1 |
3 |
nm |
24 |
-1 |
nm |
Other
non-current income and expenses |
-103 |
18 |
nm |
-133 |
-5 |
+2,560.0% |
Income from operating activities |
798 |
1,085 |
-26.5% |
888 |
1,286 |
-30.9% |
Cost of
financial debt |
-111 |
-118 |
-5.9% |
-332 |
-354 |
-6.2% |
Income
from cash and cash equivalent |
13 |
9 |
+44.4% |
40 |
29 |
+37.9% |
Net cost of financial debt |
-98 |
-109 |
-10.1% |
-292 |
-325 |
-10.2% |
Other
financial income and expenses |
-236 |
-61 |
+286.9% |
-346 |
-135 |
+156.3% |
Income before tax |
464 |
915 |
-49.3% |
250 |
826 |
-69.7% |
Income
taxes |
-103 |
-136 |
-24.3% |
-136 |
-203 |
-33.0% |
Net income of consolidated companies |
361 |
780 |
-53.7% |
114 |
623 |
-81.7% |
Share of
profits (losses) of associates |
6 |
7 |
-14.3% |
14 |
6 |
+133.3% |
Net income for the period |
367 |
787 |
-53.4% |
128 |
629 |
-79.7% |
Minority
interest |
1 |
1 |
+0.0% |
2 |
2 |
+0.0% |
Net income for the period – Group part |
366 |
786 |
-53.4% |
126 |
627 |
-79.9% |
Consolidated Balance Sheet
Assets |
30 Sep 2019 |
31 Dec 2018 |
In million euros |
Goodwill |
218 |
217 |
Intangible assets |
1,263 |
1,194 |
Flight
equipment |
10,619 |
10,167 |
Other
property, plant and equipment |
1,554 |
1,503 |
Right-of-use assets |
4,921 |
5,243 |
Investments in equity associates |
310 |
311 |
Pension
assets |
132 |
331 |
Other
financial assets |
1,390 |
1,487 |
Deferred
tax assets |
501 |
544 |
Other
non-current assets |
354 |
264 |
Total non-current assets |
21,262 |
21,261 |
Other
short-term financial assets |
499 |
325 |
Inventories |
704 |
633 |
Trade
receivables |
2,397 |
2,191 |
Other
current assets |
1,324 |
1,062 |
Cash and
cash equivalents |
4,109 |
3,585 |
Total current assets |
9,033 |
7,796 |
Total assets |
30,295 |
29,057 |
Liabilities and
equity |
30 Sep 2019 |
31 Dec 2018 |
In million euros |
Issued capital |
429 |
429 |
Additional paid-in capital |
4,139 |
4,139 |
Treasury
shares |
-67 |
-67 |
Perpetual |
403 |
403 |
Reserves
and retained earnings |
-3,144 |
-3,051 |
Equity attributable to equity holders of Air
France-KLM |
1,760 |
1,853 |
Non-controlling interests |
13 |
12 |
Total Equity |
1,773 |
1,865 |
Pension
provisions |
2,255 |
2,098 |
Return
obligation liability and other provisions |
3,246 |
3,035 |
Financial debt |
6,006 |
5,733 |
Lease
debt |
3,400 |
3,546 |
Deferred
tax liabilities |
0 |
4 |
Other
non-current liabilities |
423 |
459 |
Total non-current liabilities |
15,330 |
14,875 |
Return
obligation liability and other provisions |
623 |
492 |
Current
portion of financial debt |
1,027 |
826 |
Current
portion of lease debt |
999 |
989 |
Trade
payables |
2,594 |
2,460 |
Deferred
revenue on ticket sales |
3,455 |
3,153 |
Frequent
flyer program |
850 |
844 |
Other
current liabilities |
3,628 |
3,548 |
Bank
overdrafts |
16 |
5 |
Total current liabilities |
13,192 |
12,317 |
Total equity and liabilities |
30,295 |
29,057 |
Statement of Consolidated Cash Flows
from 1st January until 30th September 2019
In million euros |
30 Sep 2019 |
30 Sep 2018 |
Net income from continuing operations |
128 |
629 |
Amortization, depreciation and operating provisions |
2,221 |
2,149 |
Financial provisions |
133 |
93 |
Loss
(gain) on disposals of tangible and intangible assets |
-34 |
-18 |
Loss
(gain)on disposals of subsidiaries and associates |
0 |
1 |
Derivatives – non monetary result |
15 |
25 |
Unrealized foreign exchange gains and losses, net |
207 |
118 |
Other
non-monetary items |
218 |
-283 |
Share of
(profits) losses of associates |
-14 |
-6 |
Deferred
taxes |
72 |
187 |
Financial Capacity |
2,946 |
2,895 |
(Increase) / decrease in inventories |
-83 |
-102 |
(Increase) / decrease in trade receivables |
-147 |
-471 |
Increase
/ (decrease) in trade payables |
42 |
222 |
Change
in other receivables and payables |
260 |
361 |
Change in working capital requirements |
72 |
10 |
Net cash flow from operating activities |
3,018 |
2,905 |
Purchase
of property, plant and equipment and intangible assets |
-2,238 |
-2,138 |
Proceeds
on disposal of property, plant and equipment and intangible
assets |
84 |
96 |
Proceeds
on disposal of subsidiaries, of shares in non-controlled
entities |
8 |
5 |
Acquisition of subsidiaries, of shares in non-controlled
entities |
-1 |
-9 |
Dividends received |
10 |
4 |
Decrease
(increase) in net investments, more than 3 months |
-9 |
5 |
Net cash flow used in investing activities |
-2,146 |
-2,037 |
Increase
of equity due to new convertible bond |
54 |
0 |
Perpetual (including premium) |
0 |
-211 |
Issuance
of debt |
904 |
532 |
Repayment on financial debt |
-560 |
-1,182 |
Payments
on lease debt |
-748 |
-736 |
Decrease
(increase ) in loans, net |
-17 |
-52 |
Dividends and coupons on perpetual paid |
-1 |
-12 |
Net cash flow from financing activities |
-368 |
-1,661 |
Effect
of exchange rate on cash and cash equivalents and bank
overdrafts |
9 |
2 |
Change in cash and cash equivalents and bank
overdrafts |
513 |
-791 |
Cash and
cash equivalents and bank overdrafts at beginning of period |
3,580 |
4,667 |
Cash and
cash equivalents and bank overdrafts at end of period |
4,093 |
3,876 |
Change in treasury of discontinued operations |
0 |
0 |
Key Performance Indicators
EBITDA
|
Third quarter |
Nine months |
In millions euros |
2019 |
2018 |
2019 |
2018 |
Income/(loss) from current operations |
900 |
1,065 |
997 |
1,292 |
Amortization, depreciation and provisions |
747 |
707 |
2,221 |
2,149 |
EBITDA |
1,647 |
1,771 |
3,218 |
3,441 |
Restated net result, group
share
|
Third quarter |
Nine months |
In million euros |
2019 |
2018 |
2019 |
2018 |
Net income/(loss), Group share |
366 |
786 |
126 |
627 |
Unrealized foreign exchange gains and losses, net |
155 |
-157 |
207 |
-49 |
Change
in fair value of financial assets and liabilities
(derivatives) |
11 |
-14 |
-9 |
-74 |
Non-current income and expenses |
102 |
-21 |
109 |
6 |
Tax
impact on gross adjustments net result |
-79 |
57 |
-91 |
35 |
Restated net income/(loss), group part |
555 |
651 |
342 |
545 |
Coupons
on perpetual |
-4 |
-6 |
-12 |
-18 |
Restated net income/(loss), group share including coupons
on perpetual (used to calculate earnings per share) |
551 |
645 |
330 |
527 |
Restated net income/(loss) per share (in €) |
1.29 |
1.51 |
0.77 |
1.23 |
Return on capital employed (ROCE)1
In million euros |
30 Sep 2019 |
30 Sep 2018 |
30 Sep 2018 |
30 Sep 2017 |
Goodwill and intangible assets |
1,481 |
1,390 |
1,390 |
1,329 |
Flight
equipment |
10,619 |
10,187 |
10,187 |
9,740 |
Other
property, plant and equipment |
1,554 |
1,462 |
1,462 |
1,377 |
Right of
use assets |
4,921 |
5,361 |
5,361 |
5,744 |
Investments in equity associates |
310 |
299 |
299 |
303 |
Financial
assets, marketable securities and financial deposits |
136 |
123 |
123 |
105 |
Provisions, excluding pension, cargo litigation and
restructuring |
-3,457 |
-3,002 |
-3,002 |
-2,715 |
WCR,
excluding market value of derivatives |
-6,287 |
-5,865 |
-5,865 |
-5,805 |
Capital employed |
9,277 |
9,955 |
9,955 |
10,078 |
Average capital employed (A) |
9,617 |
10,017 |
Income
from current operations |
1,037 |
1,533 |
-
Dividends received |
-1 |
-2 |
- Share
of profits (losses) of associates |
5 |
10 |
-
Normative income tax |
-309 |
-458 |
Income from current operations after tax, trailing 12
months (B) |
732 |
1,083 |
ROCE, trailing 12 months (B/A) |
7.6% |
10.8% |
Net debt
|
Balance sheet at |
In million euros |
30 Sep 2019 |
31 Dec 2018 |
Financial debt |
6,687 |
6,216 |
Lease
debt |
4,306 |
4,450 |
Currency
hedge on financial debt |
-11 |
7 |
Accrued
interest |
-60 |
-67 |
Gross financial debt (A) |
10,922 |
10,606 |
Cash and
cash equivalents |
4,109 |
3,585 |
Marketable securities |
79 |
74 |
Cash
securities |
269 |
265 |
Deposits
(bonds) |
568 |
522 |
Bank
overdrafts |
-16 |
-5 |
Others |
2 |
1 |
Net cash (B) |
5,011 |
4,442 |
Net debt (A) – (B) |
5,911 |
6,164 |
Adjusted operating free cash
flow
|
Third quarter |
Nine months |
In million euros |
2019 |
2018 |
2019 |
2018 |
Net cash flow from operating activities, continued operations |
777 |
759 |
3,018 |
2,905 |
Investment in property, plant, equipment and intangible assets |
-774 |
-604 |
-2,238 |
-2,138 |
Proceeds
on disposal of property, plant, equipment and intangible
assets |
9 |
50 |
84 |
96 |
Operating free cash flow |
12 |
205 |
864 |
863 |
Payments on lease debt |
-247 |
-219 |
-748 |
-736 |
Adjusted operating free cash flow |
-235 |
-14 |
116 |
127 |
Unit cost: net cost per ASK
|
Third quarter |
Nine months |
|
2019 |
2018 |
2019 |
2018 |
Revenues (in €m) |
7,696 |
7,545 |
20,732 |
19,977 |
Income/(loss) from current operations (in €m) -/- |
-900 |
-1,065 |
-997 |
-1,292 |
Total
operating expense (in €m) |
6,796 |
6,480 |
19,735 |
18,685 |
Passenger
network business – other revenues (in €m) |
-233 |
-255 |
-669 |
-669 |
Cargo
network business – other revenues (in €m) |
-77 |
-76 |
-231 |
-219 |
Third-party revenues in the maintenance business (in €m) |
-543 |
-489 |
-1,623 |
-1,430 |
Transavia
- other revenues (in €m) |
0 |
0 |
-7 |
-11 |
Third-party revenues of other businesses (in €m) |
-10 |
-10 |
-26 |
-28 |
Net cost (in €m) |
5,933 |
5,650 |
17,179 |
16,328 |
Capacity produced, reported in ASK* |
90,323 |
88,300 |
251,116 |
243,241 |
Net cost per ASK (in € cents per ASK) |
6.57 |
6.40 |
6.84 |
6.71 |
Gross change |
|
2.7% |
|
1.9% |
Currency effect on net costs (in €m) |
|
54 |
|
251 |
Change at constant currency |
|
1.7% |
|
0.4% |
Fuel price effect (in €m) |
|
74 |
|
194 |
Change on a constant currency and fuel price basis |
|
0.4% |
|
-0.7% |
Net cost per ASK on a constant currency and fuel price
basis (in € cents per ASK) |
6.57 |
6.54 |
6.84 |
6.89 |
Change at constant currency and fuel price
basis |
|
+0.4% |
|
-0.7% |
* 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).
Group results
Air France Group
|
Third quarter |
Nine months |
|
2019 |
Change |
2019 |
Change |
Revenue (in €m) |
4,650 |
+1.5% |
12,632 |
+4.8% |
EBITDA
(in €m) |
850 |
-101 |
1,663 |
-32 |
Operating result (en m€) |
383 |
-110 |
270 |
-58 |
Operating margin (%) |
8.2% |
-2.5 pt |
2.1% |
-0.6 pt |
Operating cash flow before WCR and restructuring cash out (in
€m) |
803 |
-80 |
1,567 |
+48 |
Operating cash flow (before WCR and restructuring) margin |
17.3% |
-2.0 pt |
12.4% |
-0.2 pt |
KLM
Group |
Third quarter |
Nine months |
|
2019 |
Change |
2019 |
Change |
Revenue (in €m) |
3,160 |
+1.6% |
8,444 |
+1.8% |
EBITDA
(in €m) |
791 |
-27 |
1,535 |
-199 |
Operating result (en m€) |
512 |
-61 |
714 |
-246 |
Operating margin (%) |
16.2% |
-2.2 pt |
8.5% |
-3.1 pt |
Operating cash flow before WCR and restructuring cash out (in
€m) |
687 |
-17 |
1,378 |
-113 |
Operating cash flow (before WCR and restructuring) margin |
21.7% |
-0.9 pt |
16.3% |
-1.7 pt |
NB: Sum of individual airline results does not add up to Air
France-KLM total due to intercompany eliminations at Group
levelGroup fleet at 30 September 2019
Aircraft type |
AF (incl. HOP) |
KL (incl. KLC & MP) |
Transavia |
Owned |
Finance lease |
Operating lease |
Total |
In operation |
Change / 31/12/18 |
B747-400 |
|
10 |
|
10 |
|
|
10 |
10 |
-1 |
B777-300 |
43 |
14 |
|
12 |
23 |
22 |
57 |
57 |
|
B777-200 |
25 |
15 |
|
24 |
1 |
15 |
40 |
40 |
|
B787-9 |
9 |
13 |
|
7 |
3 |
12 |
22 |
22 |
2 |
B787-10 |
|
1 |
|
1 |
|
|
1 |
1 |
1 |
A380-800 |
10 |
|
|
1 |
4 |
5 |
10 |
10 |
|
A350-900 |
1 |
|
|
|
1 |
|
1 |
1 |
1 |
A340-300 |
4 |
|
|
4 |
|
|
4 |
4 |
-2 |
A330-300 |
|
5 |
|
|
|
5 |
5 |
5 |
|
A330-200 |
15 |
8 |
|
11 |
|
12 |
23 |
23 |
|
Total Long-Haul |
107 |
66 |
0 |
70 |
32 |
71 |
173 |
173 |
1 |
B737-900 |
|
5 |
|
2 |
|
3 |
5 |
5 |
|
B737-800 |
|
30 |
73 |
29 |
10 |
64 |
103 |
102 |
9 |
B737-700 |
|
16 |
7 |
3 |
5 |
15 |
23 |
23 |
-2 |
A321 |
20 |
|
|
11 |
|
9 |
20 |
20 |
|
A320 |
43 |
|
|
3 |
5 |
35 |
43 |
43 |
|
A319 |
33 |
|
|
20 |
|
13 |
33 |
33 |
-1 |
A318 |
18 |
|
|
17 |
1 |
|
18 |
18 |
|
Total Medium-Haul |
114 |
51 |
80 |
85 |
21 |
139 |
245 |
244 |
6 |
ATR72-600 |
6 |
|
|
|
|
6 |
6 |
4 |
|
ATR72-500 |
|
|
|
|
|
|
|
|
-1 |
ATR42-500 |
2 |
|
|
|
|
2 |
2 |
|
-4 |
Canadair
Jet 1000 |
14 |
|
|
14 |
|
|
14 |
14 |
|
Canadair
Jet 700 |
11 |
|
|
11 |
|
|
11 |
10 |
|
Embraer
190 |
14 |
32 |
|
7 |
14 |
25 |
46 |
46 |
3 |
Embraer
175 |
|
17 |
|
3 |
14 |
|
17 |
17 |
|
Embraer
170 |
15 |
|
|
9 |
1 |
5 |
15 |
15 |
|
Embraer
145 |
17 |
|
|
14 |
3 |
|
17 |
13 |
-1 |
Total Regional |
79 |
49 |
0 |
58 |
32 |
38 |
128 |
119 |
-3 |
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 |
302 |
170 |
80 |
219 |
85 |
248 |
552 |
542 |
4 |
1 Passenger unit revenue is the aggregate of Passenger network
and Transavia unit revenues, change at constant currency
1 To align with industry practice, as of 2019
the EASK metric will no longer be used.The new Unit Cost definition
will be: Net cost per Available Seat Kilometer at constant fuel and
currency. The impact of this change for the unit cost is -0.1pt for
2019
2 Based on the forward curves of 25 October 2019
average Brent price of USD 64, average jet fuel price of USD 683
per ton including into plane costs. Assuming exchange rate of
EUR/USD of 1.12 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.
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