FULL YEAR 2019 Results
20 February 2020
FULL YEAR 2019 Operating
result at 1,141 million euros, unit cost at -0.9%,
pressure on Cargo unit revenue and a higher fuel
bill |
FULL YEAR 2019
- Revenue growth for all businesses, with strong performance from
Transavia and Maintenance
- Unit cost at constant currency and fuel reduced by -0.9%, at
the better end of guidance range
- Operating result at 1,141 million euros, down 264 million euros
compared to last year1
- Net income at 290 million euros
- Net debt/EBITDA ratio at 1.5x, in line with guidance
- Record levels of customer satisfaction for Air France and
steady-state high level for KLM
- Leading airline group on sustainability in the Dow Jones
Sustainability Index
OUTLOOKBusiness
trendsAfter a good performance for the Passenger Network
activity with positive unit revenue in January 2020, recent
developments with regards to the Covid-19 have impacted the demand
outlook, especially in the Asian network. This translates in
long-haul forward booking load factors down from February to May
2020. As a consequence the Group anticipates unit revenues at
constant currency to be down for the first quarter of 2020.
The Cargo activity is also impacted by Covid-19,
foreseen to maintain pressure on the load factor and yield in the
first part of 2020.
Based on the Group announcement regarding
Covid-19 (suspension of China operations in February-March and
possible resumption of operations starting from April 2020), the
high-level estimated impact on operating result is of between -150
and -200 million euros for February to April 2020.
Full year 2020 guidance
- Unit cost reduction of between -1% and 0% at constant currency
and fuel price
- The Group plans capital expenditures of 3.6 billion euros for
2020
- Net debt/ EBITDA ratio of circa 1.5x
The 2020 fuel bill is expected to decrease by
300 million euros compared to 2019 to 5.2 billion euros, based on
the forward curve of 14 February 2020
The Board of Directors of Air France-KLM,
chaired by Anne-Marie Couderc, met on 19 February 2020 to approve
the financial statements for the Full year 2019.
“In 2019, the Air France-KLM Group posted an
operating result at 1,141 million euros with a fuel bill hit and
pressure on Cargo unit revenues” said Benjamin Smith, CEO of
the Air France-KLM Group. Over the year we reinforced our
foundations to build a European champion, notably through fleet
optimization and restored trust that led to social stability and
positive labour agreements at Air France and new CLA agreements at
KLM. I am also proud that our Group was again at the top of the
DJSI ranking and is recognized as an experienced and knowledgeable
environmental leader in the industry. In November, we outlined our
strategic plan with a substantial further step-up in financial
performance foreseen, and we begin on this 5-year trajectory with a
robust financial structure and strong unique assets.”
Air France-KLM Group |
Fourth quarter |
Full year |
2019 |
Change |
2019 |
Change1 |
Passengers (thousands) |
24,612 |
+0.6% |
104,205 |
+2.7% |
Passenger Unit revenue per ASK2 (€ cts) |
6.58 |
+0.6% |
6.67 |
-0.2% |
Operating result (€m) |
96 |
+43 |
1,141 |
-264 |
Net income – Group part (€m) |
156 |
+373 |
290 |
-130 |
Adj. operating free cash flow (€m) |
-501 |
-489 |
-385 |
-500 |
Net debt at end of period (€m) |
|
|
6,147 |
-17 |
2018 and 2019 results restated (with a similar impact in both
years) for limited life parts componentization accounting change.
See notes in the consolidated financial statements paragraph 2,
page 12-15 and page 9-10 of this press release.
Business review
Network: Resilient performance from Passenger and
ongoing pressure on Cargo in the 2019 fourth quarter
Network |
Fourth quarter |
Full year |
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Total revenues (€m) |
5,756 |
+1.2% |
+0.0% |
23,272 |
+2.6% |
+1.5% |
Scheduled revenues (€m) |
5,499 |
+1.8% |
+0.4% |
22,251 |
+2.4% |
+1.1% |
Operating result (€m) |
38 |
-8 |
-22 |
749 |
-293 |
-256 |
Full year 2019 revenues increased by +1.5% at
constant currency to 23.3 billion euros, thanks to the growth of
the network activity. The operating result amounted to 749 million
euros, a 256 million euro decrease at constant currency compared to
last year, mainly explained by an increased fuel bill and with a
good unit cost performance offsetting the drop in Cargo unit
revenue.
Passenger network: Unit revenue in the
fourth quarter 2019 -0.2% as expected, with a strong performance
from French domestic and Medium-haul.
|
Fourth quarter |
Full year |
Passenger network |
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Passengers (thousands) |
21,346 |
+1.1% |
|
87,624 |
+2.3% |
|
Capacity (ASK m) |
74,723 |
+2.4% |
|
299,606 |
+2.5% |
|
Traffic (RPK m) |
64,941 |
+3.4% |
|
263,499 |
+3.2% |
|
Load factor |
86.9% |
+0.8
pt |
|
87.9% |
+0.5
pt |
|
Total passenger revenues (€m) |
5,197 |
+2.8% |
+1.8% |
21,119 |
+3.6% |
+2.5% |
Scheduled passenger revenues (€m) |
5,020 |
+3.5% |
+2.3% |
20,408 |
+3.4% |
+2.1% |
Unit revenue per ASK (€ cts) |
6.72 |
+1.1% |
-0.2% |
6.81 |
+0.8% |
-0.4% |
The fourth quarter 2019 posted a mixed
performance from the Long-haul network and an improving trend in
Short & Medium-haul:
- The North Atlantic network’s unit revenue was down -2.8% in the
fourth quarter 2019 compared to last year, explained by a 5%
ramp-up in Air France-KLM capacity and measures undertaken to
defend market-share on specific local traffic flows.
- The Asian network’s unit revenue was slightly down (-0.7%) in
the fourth quarter 2019, with a continuing strong performance in
the networks to Japan, Korea and India. The performance of the
routes to Greater China continued to be subdued by the ongoing
geo-political situation in Hong Kong.
- The Caribbean & Indian Ocean network continued to post
solid results with a fourth quarter unit revenue at +2.8%,
supported by strong leisure demand.
- The Africa & Middle East network saw a unit revenue
improvement of 1.8%, underpinned by network rationalizations in the
Middle East.
- The Latin American network showed an improving trend but
continued to post negative unit revenues (-4.2%) as the
geo-political and economic context remained challenging in
Argentina, Brazil and Chile.
- The performance from the Medium-haul hubs was strong with
fourth quarter unit revenues up 3.9%, underpinned by a marked
moderation in industry capacity growth.
- The positive effects from the rationalization measures in the
Domestic France network were clearly visible, resulting in an
improved performance in the fourth quarter with unit revenues up
7.8%.
Cargo: Performance impacted by continuing supply-demand
imbalance in the fourth quarter 2019
|
Fourth quarter |
Full year |
Cargo business |
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Tons (thousands) |
288 |
-5.0% |
|
1,110 |
-2.3% |
|
Capacity (ATK m) |
3,714 |
+2.3% |
|
14,609 |
+1.7% |
|
Traffic (RTK m) |
2,208 |
-4.9% |
|
8,467 |
-2.2% |
|
Load factor |
59.5% |
-4.5
pt |
|
58.0% |
-2.3
pt |
|
Total Cargo revenues (€m) |
559 |
-12.0% |
-13.7% |
2,153 |
-5.9% |
-7.8% |
Scheduled cargo revenues (€m) |
479 |
-13.5% |
-15.3% |
1,843 |
-7.3% |
-9.1% |
Unit revenue per ATK (€ cts ) |
12.91 |
-15.4% |
-17.1% |
12.62 |
-8.9% |
-10.7% |
Fourth quarter 2019 unit revenue remained under
strong pressure and was down 17.1% compared to last year at
constant currency. Effective cost control measures partly mitigated
the negative impact of the Cargo contribution on the Network
results.
Substantial Cargo industry capacity additions in
2019 led to the worst traffic versus capacity trend for the last 10
years, driven by opportunistic growth strategies after the strong
Cargo market in the second half of 2017 and Full year 2018.This
caused substantial (belly) overcapacity, particularly on the North
Atlantic routes.
On the demand side, at the year end world-wide
air freight volumes had fallen for 14 consecutive months, caused by
geo-political uncertainties resulting in weak global air freight
demand, trade tensions impacting especially ex-Asia volumes and a
strong decline in demand from the auto-motive industry.
In this context, the market share of Air
France-KLM Cargo proved resilient, with the growth realized in
alternative flows partly mitigating the ex-Asia losses.
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. A new Revenue
Action plan for 2020 has been established to deliver incremental
revenues.
Transavia: Strong performance in the
2019 fourth quarter and strong demand in both home
markets
|
Fourth quarter |
Full year |
Transavia |
2019 |
Change |
2019 |
Change |
Passengers (thousands) |
3,266 |
-2.6% |
16,581 |
+4.8% |
Capacity (ASK m) |
6,640 |
-2.6% |
32,867 |
+6.5% |
Traffic (RPK m) |
6,064 |
-2.2% |
30,303 |
+6.7% |
Load factor |
91.3% |
+0.4 pt |
92.2% |
+0.2 pt |
Total passenger revenues (€m) |
338 |
+10.8% |
1,744 |
+9.3% |
Unit revenue per ASK (€ cts) |
4.97 |
+10.2% |
5.34 |
+3.0% |
Unit cost per ASK (€ cts) |
5.38 |
+4.8% |
4.94 |
+4.8% |
Operating result (€m) |
-27 |
+15 |
131 |
-14 |
As anticipated, capacity growth was slightly
negative in the fourth quarter 2019 at -2.6% due to the increase in
cockpit training needed to prepare for future growth in Transavia
France.
Transavia delivered a good unit revenue
performance in the fourth quarter 2019 with an increase of 10.2%
compared to last year, in the context of capacity moderation
combined with strong demand in both home markets.
The unit revenue for the Full year 2019
increased by 3.0% compared to last year, due to strong demand in
both France and the Netherlands. For the Full year 2019, the
revenue grew by 9.3% compared to last year for capacity growth of
6.5%.
The Transavia unit cost for the Full year
increased by 2.7% at constant fuel and currency, explained by
increased fleet related- and non-performance costs.
The Full year operating margin stood at 7.5%,
with an absolute operating result of 131 million euros, 14 million
euros down compared to last year.
Solid trend in Maintenance business margins in
2019
|
Fourth quarter |
Full year |
Maintenance |
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Total revenues (€m) |
1,163 |
-3.6% |
|
4,617 |
+6.2% |
|
Third-party revenues (€m) |
515 |
+5.1% |
+1.0% |
2,138 |
+11.3% |
+5.8% |
Operating result (€m) |
90 |
43 |
39 |
260 |
46 |
27 |
Operating margin (%) |
7.7% |
+3.8 pt |
+3.6 pt |
5.6% |
+0.7 pt |
+0.4 pt |
The fourth quarter operating result stood at 90
million euros, an increase of 43 million euros, underpinned mainly
by increased Engine activity for Third-parties.Full year 2019
revenues increased compared to last year with third-party revenues
up 11.3% and 5.8% at constant currency, a continuation of the
growth trend underpinned by the inflow of new contracts. The Full
year 2019 operating result stood at 260 million euros, an increase
of 46 million euros, supported by positive contributions from all
business segments: Airframe, Engines and Components. The relentless
focus from the teams on turn-around times and cost efficiencies
drove these margin improvements.
The Maintenance order book stood at 11.5 billion
dollars at 31 December 2019, stable on last year.
Air France-KLM Group: Full year 2019
operating result at 1,141 million euros with cost efficiency
measures offset by pressure on Cargo unit revenue and a fuel bill
increase
|
Fourth quarter |
Full year |
|
2019 |
Change |
Change constant currency |
2019 |
Change |
Change constant currency |
Capacity (ASK m) |
81,363 |
+2.0% |
|
332,473 |
+2.9% |
|
Traffic (RPK m) |
71,005 |
+2.9% |
|
293,802 |
+3.5% |
|
Passenger unit revenue per ASK (€ cts) |
6.58 |
+1.7% |
+0.6% |
6.67 |
+0.9% |
-0.2% |
Group unit revenue per ASK (€ cts) |
7.16 |
-0.1% |
-1.1% |
7.22 |
-0.0% |
-1.2% |
Group unit cost per ASK (€ cts) at constant fuel |
7.05 |
-0.5% |
-1.5% |
6.88 |
+0.5% |
-0.9% |
Revenues (€m) |
6,618 |
+1.9% |
+0.5% |
27,189 |
+3.7% |
+2.2% |
EBITDA (€m) |
867 |
+8.2% |
+6.1% |
4,128 |
-3.8% |
-3.3% |
Operating result (€m) |
96 |
+81.1% |
+35.9% |
1,141 |
-18.8% |
-17.7% |
Operating margin (%) |
1.5% |
+0.6
pt |
+0.4 pt |
4.2% |
-1.2
pt |
-1.0 pt |
Net income - Group part (€m) |
156 |
+373 |
|
290 |
-130 |
|
2018 and 2019 results restated (with a similar
impact in both years) for LLP componentization accounting change.
For details see statements paragraph 2, page 12-15
In the Full year 2019, the Air France-KLM Group
posted an operating result of 1,141 million euros, down by 18.8%
compared to last year, impacted by a challenging trading
environment and a higher fuel bill.
Net income amounted to 290 million euros
in 2019, a decrease of 130 million euros compared to last year.
The fuel bill including hedging stood at 5,511
million euros in 2019, up 550 million euros. This increase is
mainly explained by a hedging gain of 50 million euros this year
compared to a hedging gain of 650 million euros last year.
Currencies had a positive 367 million euro
impact on revenues and a negative 122 million euro effect on costs
(ex-fuel) including currency hedging in 2019.
The 2019 fourth quarter unit cost
declined by -1.5%, delivering a -0.9% improvement for Full Year
2019, consistent with guidance
On a constant currency and fuel price basis,
unit costs were down -1.5% in the fourth quarter 2019, with the
first realizations of cost efficiency measures at Air France.
Group net employee costs were up 4.9% in 2019
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 2019 increased by 1,400 compared to last year,
including an additional 550 Pilots and 500 Cabin Crew. Productivity
measured in ASK per FTE increased by 1.2% in 2019.
Net debt stable and Leverage ratio at
Full year guidance of 1.5x
|
Fourth quarter |
Full year |
In € million |
2019 |
Change |
2019 |
Change |
Cash flow before change in WCR and Voluntary Departure Plans,
continuing operations (€m) |
814 |
+167 |
3,795 |
+253 |
Cash out related to Voluntary Departure Plans (€m) |
0 |
+0 |
-35 |
-35 |
Change in Working Capital Requirement (WCR) (€m) |
63 |
-183 |
135 |
-121 |
Net cash flow from operating activities
(€m) |
877 |
-16 |
3,895 |
97 |
Net investments* (€m) |
-1,118 |
-449 |
-3,272 |
-561 |
Operating free cash flow
(€m) |
-241 |
-465 |
623 |
-464 |
Repayment of lease debt |
-260 |
-24 |
-1,008 |
-36 |
Adjusted operating free cash flow** |
-501 |
-489 |
-385 |
-500 |
* 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 after deducting the repayment of lease
debt.
Adjusted operating free cash flow at
-385 million eurosThe Group generated adjusted operating
free cash flow of -385 million euros, a decrease of 500 million
euros compared to last year, mainly explained by higher net
investments in 2019.
The lease debt amounted to 4,120 million euros,
a reduction of 415 million euros compared to the end of 2018.
Net debt
stable
In € million |
31 Dec 2019 |
31 Dec 2018 |
Net debt |
6,147 |
6,164 |
EBITDA
trailing 12 months |
4,128 |
4,293 |
Net debt/EBITDA trailing 12
months |
1.5 x |
1.4 x |
The Group net debt stood at 6,147 million euros
at 31 December 2019, which is comparable to last year.The net
debt/EBITDA ratio stood at 1.5x at 31 December 2019, a slight
increase explained by the reduction in EBITDA.
Both airlines improved their results in the fourth
quarter 2019, with cost efficiency measures paying off for Air
France, resulting in a +0.8pt margin increase
|
Fourth quarter |
Full year |
|
2019 |
Change |
2019 |
Change |
Air France Group Operating result (€m) |
-19 |
+30 |
280 |
-41 |
Operating margin (%) |
-0.5% |
+0.8 pt |
1.7% |
-0.3 pt |
KLM Group Operating result (€m) |
119 |
+7 |
853 |
-238 |
Operating margin (%) |
4.4% |
+0.2 pt |
7.7% |
-2.3 pt |
Outlook
Business trends
After a good performance for the Passenger
Network activity with positive unit revenue in January 2020, recent
developments with regards to the Covid-19 have impacted the demand
outlook, especially in the Asian network. This translates in
long-haul forward booking load factors down from February to May
2020. As a consequence the Group anticipates unit revenues at
constant currency to be down for the first quarter of 2020.
The Cargo activity is also impacted by Covid-19,
foreseen to maintain pressure on the load factor and yield in the
first part of 2020.
Based on the Group announcement regarding
Covid-19 (suspension of China operations in February-March and
possible resumption of operations starting from April 20203), the
high-level estimated impact on operating result is of between -150
and -200 million euros for February to April 2020.This impact on
operating result is estimated as the sum of associated loss of
revenue due to suspension of China operations for Passenger and
Cargo, negative impact for connecting traffic and weakness in rest
of Asia and variable cost savings as no redeployment so far is
taken into account.
Full year 2020 guidance
Capacity:Passenger
network activity: In 2020, the Air France-KLM Group plans
to selectively grow capacity by 2% to 3% compared to 2019. Capacity
implications due to the Covid-19-related flight suspensions are
expected to reduce capacity growth to or below the lower-end of
this guided range.Transavia: Continue to grow at a
sustained pace of 4% to 6% in 2020, with around 10% growth foreseen
in France and limited growth for Transavia Netherlands in light of
the capacity constraints at Dutch airports.
Fuel:The 2020 fuel bill is
expected to decrease by 300 million euros compared to 2019 to 5.2
billion euros, based on the forward curve of 14 February 2020.4
Unit cost:The Group will pursue
initiatives to reduce unit costs, with a targeted 2020 reduction of
between -1% to 0% at constant currency and fuel price. Negative
cost implications related to the Covid-19 foreseen due to
lower-than-planned capacity growth and disruption cost.
Capex:The Group plans capital
expenditures of 3.6 billion euros for 2020.
Leverage:Air France-KLM is
targeting a Net debt/EBITDA ratio of circa
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 Universal Registration Document.
The results presentation is available at
www.airfranceklm.com on 20 February 2020 from 7:15
am CET.
A conference call hosted by Mr. Smith (CEO) and Mr. Gagey (CFO)
will be held on 20 February 2020 at 08.30.
To connect to the conference call, please dial:
France: Local +33 (0)1 76 77 22 57Netherlands:
Local +31 (0) 20 703 8261UK: Local +44 (0)330 336 9411US: Local +1
720 543 0214
Confirmation code: 5903128
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– restatement by quarter of
2019
Since January 1, 2019, the Air France-KLM Group
has made changes in accounting treatment for Customer compensation
and the Component approach for Life Limited Parts. A full
explanation of the changes is given in the Consolidated Financial
Statements January 1, 2019 – December 31, 2019, note 2, page
15.
In accordance with IAS 8 “Accounting Policies,
Changes in Accounting Estimates and Errors”, these changes in
accounting policies have been applied retrospectively to each
previous period for which financial information is presented.
€m |
Q1
2019restated |
Q2
2019restated |
Q3
2019restated |
Q4 2019 |
Full year 2019 |
Revenues |
5,942 |
7,021 |
7,609 |
6,617 |
27,188 |
Other Revenue From Operating Activity |
0 |
0 |
0 |
1 |
1 |
External expenses |
-3,707 |
-4,028 |
-4,166 |
-3,992 |
-15,893 |
Salaries & related costs (including external staff) |
-1,972 |
-2,048 |
-2,011 |
-2,108 |
-8,139 |
Other taxes |
-52 |
-41 |
-27 |
-34 |
-154 |
Other income and expenses |
232 |
263 |
247 |
383 |
1,125 |
EBITDA |
443 |
1,167 |
1,652 |
867 |
4,128 |
Amortization, Depreciation and provision |
-729 |
-744 |
-743 |
-771 |
-2,987 |
Income from current operations |
-286 |
423 |
909 |
96 |
1,141 |
Non current result |
18 |
-25 |
-102 |
-22 |
-131 |
Income from operating activities |
-268 |
398 |
807 |
74 |
1,010 |
Gross cost of financial debt |
-106 |
-115 |
-111 |
-110 |
-442 |
Income from cash & cash equivalent |
12 |
15 |
13 |
9 |
49 |
Net cost of financial debt |
-94 |
-100 |
-98 |
-101 |
-393 |
|
|
|
|
|
|
Other financial income and expenses |
-92 |
-41 |
-258 |
120 |
-271 |
|
|
|
|
|
|
Income before taxes |
-454 |
258 |
451 |
93 |
346 |
|
|
|
|
|
|
Income tax |
128 |
-165 |
-94 |
55 |
-76 |
|
|
|
|
|
|
Net income of consolidated companies |
-326 |
93 |
357 |
148 |
270 |
|
|
|
|
|
|
Share in net income of equity affiliates |
2 |
6 |
6 |
9 |
23 |
|
|
|
|
|
|
Net income for the period |
-324 |
99 |
363 |
157 |
293 |
|
|
|
|
|
|
Net income - minority interest |
0 |
1 |
1 |
1 |
3 |
Net income - group part |
-324 |
98 |
362 |
156 |
290 |
€m |
Q1
2018restated |
Q2
2018restated |
Q3
2018restated |
Q4
2018restated |
Full year
2018restated |
Revenues |
5,730 |
6,523 |
7,478 |
6,493 |
26,224 |
Other Revenue From Operating Activity |
0 |
0 |
1 |
2 |
3 |
External expenses |
-3,427 |
-3,704 |
-3,941 |
-3,873 |
-14,946 |
Salaries & related costs (including external staff) |
-1,853 |
-1,959 |
-1,916 |
-2,031 |
-7,759 |
Other taxes |
-49 |
-38 |
-40 |
-39 |
-166 |
Other income and expenses |
235 |
237 |
214 |
249 |
937 |
EBITDA |
637 |
1,059 |
1,796 |
801 |
4,293 |
Amortization, Depreciation and provision |
-742 |
-690 |
-708 |
-748 |
-2,888 |
Income from current operations |
-105 |
369 |
1,088 |
53 |
1,405 |
Non current result |
-47 |
20 |
21 |
-6 |
-12 |
Income from operating activities |
-152 |
389 |
1,109 |
47 |
1,393 |
Gross cost of financial debt |
-114 |
-122 |
-119 |
-110 |
-465 |
Income from cash & cash equivalent |
10 |
10 |
10 |
10 |
39 |
Net cost of financial debt |
-104 |
-112 |
-109 |
-100 |
-426 |
|
|
|
|
|
|
Other financial income and expenses |
25 |
-134 |
-73 |
-153 |
-336 |
|
|
|
|
|
|
Income before taxes |
-231 |
142 |
927 |
-206 |
631 |
|
|
|
|
|
|
Income tax |
-9 |
-58 |
-137 |
-21 |
-224 |
|
|
|
|
|
|
Net income of consolidated companies |
-240 |
84 |
791 |
-227 |
407 |
|
|
|
|
|
|
Share in net income of equity affiliates |
-6 |
6 |
7 |
9 |
15 |
|
|
|
|
|
|
Net income for the period |
-246 |
90 |
797 |
-218 |
422 |
|
|
|
|
|
|
Net income - minority interest |
0 |
1 |
1 |
1 |
2 |
Net income - group part |
-246 |
89 |
796 |
-217 |
420 |
Income Statement
|
Fourth quarter |
Full year |
€m |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
Sales |
6,617 |
6,493 |
+1.9% |
27,188 |
26,224 |
+3.7% |
Other revenues |
1 |
2 |
-50.0% |
1 |
3 |
-66.7% |
Revenues |
6,618 |
6,495 |
+1.9% |
27,189 |
26,227 |
+3.7% |
Aircraft
fuel |
-1,393 |
-1,336 |
+4.3% |
-5,511 |
-4,958 |
+11.2% |
Chartering costs |
-118 |
-143 |
-17.5% |
-525 |
-577 |
-9.0% |
Landing
fees and en route charges |
-462 |
-474 |
-2.5% |
-1,933 |
-1,893 |
+2.1% |
Catering |
-205 |
-194 |
+5.7% |
-822 |
-783 |
+4.4% |
Handling
charges and other operating costs |
-422 |
-425 |
-0.7% |
-1,715 |
-1,673 |
+2.5% |
Aircraft
maintenance costs |
-708 |
-645 |
+9.8% |
-2,628 |
-2,410 |
+9.0% |
Commercial and distribution costs |
-246 |
-258 |
-4.7% |
-1,029 |
-1,034 |
-0.5% |
Other
external expenses |
-438 |
-398 |
+10.1% |
-1,730 |
-1,618 |
+7.2% |
Salaries
and related costs |
-2,108 |
-2,031 |
+3.8% |
-8,139 |
-7,759 |
+4.9% |
Taxes
other than income taxes |
-34 |
-39 |
-12.8% |
-154 |
-166 |
-7.2% |
Other
income and expenses |
383 |
249 |
+53.8% |
1,125 |
937 |
+20.1% |
EBITDA |
867 |
801 |
+8.2% |
4,128 |
4,293 |
-3.8% |
Amortization, depreciation and provisions |
-771 |
-748 |
+3.1% |
-2,987 |
-2,888 |
+3.4% |
Income from current operations |
96 |
53 |
+81.1% |
1,141 |
1,405 |
-18.8% |
Sales of
aircraft equipment |
-2 |
5 |
nm |
22 |
4 |
+450.0% |
Other
non-current income and expenses |
-20 |
-11 |
+81.8% |
-153 |
-16 |
+856% |
Income from operating activities |
74 |
47 |
+57.4% |
1,010 |
1,393 |
-27.5% |
Cost of
financial debt |
-110 |
-110 |
+0.0% |
-442 |
-465 |
-4.9% |
Income
from cash and cash equivalent |
9 |
10 |
-10.0% |
49 |
39 |
+25.6% |
Net cost of financial debt |
-101 |
-100 |
+1.0% |
-393 |
-426 |
-7.7% |
Other
financial income and expenses |
120 |
-153 |
nm |
-271 |
-336 |
-19.3% |
Income before tax |
93 |
-206 |
nm |
346 |
631 |
-45.2% |
Income
taxes |
55 |
-21 |
nm |
-76 |
-224 |
-66.1% |
Net income of consolidated companies |
148 |
-227 |
nm |
270 |
407 |
-33.7% |
Share of
profits (losses) of associates |
9 |
9 |
+0.0% |
23 |
15 |
+53.3% |
Net income for the period |
157 |
-218 |
nm |
293 |
422 |
-30.6% |
Minority
interest |
0 |
0 |
nm |
3 |
2 |
nm |
Net income for the period – Group part |
157 |
-218 |
nm |
293 |
422 |
-30.6% |
2018 and 2019 results restated (with a similar impact in both
years) for limited life parts componentization accounting change.
See notes in the consolidated financial statements paragraph 2,
page 12-15.
Consolidated Balance Sheet
Assets |
31 Dec 2019 |
31 Dec 2018 |
€m |
Goodwill |
217 |
217 |
Intangible assets |
1,305 |
1,194 |
Flight
equipment |
11,334 |
10,308 |
Other
property, plant and equipment |
1,580 |
1,503 |
Right-of-use assets |
5,173 |
5,664 |
Investments in equity associates |
307 |
311 |
Pension
assets |
420 |
331 |
Other
financial assets |
1,096 |
1,487 |
Deferred
tax assets |
523 |
559 |
Other
non-current assets |
241 |
264 |
Total non-current assets |
22,196 |
21,838 |
Other
short-term financial assets |
800 |
325 |
Inventories |
737 |
633 |
Trade
receivables |
2,164 |
2,191 |
Other
current assets |
1,123 |
1,065 |
Cash and
cash equivalents |
3,715 |
3,585 |
Total current assets |
8,539 |
7,799 |
Total assets |
30,735 |
29,637 |
Liabilities and
equity |
31 Dec 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 |
-2,620 |
-3,118 |
Equity attributable to equity holders of Air
France-KLM |
2,284 |
1,786 |
Non-controlling interests |
15 |
12 |
Total Equity |
2,299 |
1,798 |
Pension
provisions |
2,253 |
2,098 |
Return
obligation liability and other provisions |
3,750 |
3,657 |
Financial debt |
6,271 |
5,733 |
Lease
debt |
3,149 |
3,546 |
Deferred
tax liabilities |
142 |
4 |
Other
non-current liabilities |
222 |
459 |
Total non-current liabilities |
15,787 |
15,497 |
Return
obligation liability and other provisions |
714 |
505 |
Current
portion of financial debt |
842 |
826 |
Current
portion of lease debt |
971 |
989 |
Trade
payables |
2,379 |
2,454 |
Deferred
revenue on ticket sales |
3,289 |
3,153 |
Frequent
flyer program |
848 |
844 |
Other
current liabilities |
3,602 |
3,566 |
Bank
overdrafts |
4 |
5 |
Total current liabilities |
12,649 |
12,342 |
Total equity and liabilities |
30,735 |
29,637 |
Statement of Consolidated Cash Flows
from 1st January until 31th December 2019
€m |
31 Dec 2019 |
31 Dec 2018 |
Net income from continuing operations |
293 |
422 |
Amortization, depreciation and operating provisions |
2,987 |
2,888 |
Financial provisions |
217 |
159 |
Loss
(gain) on disposals of tangible and intangible assets |
-43 |
-33 |
Loss
(gain)on disposals of subsidiaries and associates |
0 |
0 |
Derivatives – non monetary result |
30 |
-49 |
Unrealized foreign exchange gains and losses, net |
82 |
223 |
Other
non-monetary items |
238 |
-254 |
Share of
(profits) losses of associates |
-23 |
-15 |
Deferred
taxes |
-21 |
201 |
Financial Capacity |
3,760 |
3,542 |
(Increase) / decrease in inventories |
-93 |
-31 |
(Increase) / decrease in trade receivables |
61 |
-39 |
Increase
/ (decrease) in trade payables |
-133 |
57 |
Change
in other receivables and payables |
300 |
269 |
Change in working capital requirements |
135 |
256 |
Net cash flow from operating activities |
3,895 |
3,798 |
Purchase
of property, plant and equipment and intangible assets |
-3,372 |
-2,844 |
Proceeds
on disposal of property, plant and equipment and intangible
assets |
100 |
133 |
Proceeds
on disposal of subsidiaries, of shares in non-controlled
entities |
13 |
6 |
Acquisition of subsidiaries, of shares in non-controlled
entities |
-1 |
-9 |
Dividends received |
14 |
6 |
Decrease
(increase) in net investments, more than 3 months |
-72 |
4 |
Net cash flow used in investing activities |
-3,318 |
-2,704 |
Increase
of equity due to new convertible bond |
54 |
0 |
Perpetual (including premium) |
0 |
-211 |
Issuance
of debt |
1,617 |
539 |
Repayment on financial debt |
-1,156 |
-1,400 |
Payments
on lease debt |
-1,008 |
-972 |
Decrease
(increase ) in loans, net |
72 |
-106 |
Dividends and coupons on perpetual paid |
-26 |
-38 |
Net cash flow from financing activities |
-447 |
-2,188 |
Effect
of exchange rate on cash and cash equivalents and bank
overdrafts |
1 |
7 |
Change in cash and cash equivalents and bank
overdrafts |
131 |
-1,087 |
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 |
3,711 |
3,580 |
Change in treasury of discontinued operations |
0 |
0 |
Key Performance Indicators
EBITDA
|
Fourth quarter |
Full year |
€m |
2019 |
2018 |
2019 |
2018 |
Income/(loss) from current operations |
96 |
53 |
1,141 |
1,405 |
Amortization, depreciation and provisions |
771 |
748 |
2,987 |
2,888 |
EBITDA |
867 |
801 |
4,128 |
4,293 |
Restated net result, group
share
|
Fourth quarter |
Full year |
In million euros |
2019 |
2018 |
2019 |
2018 |
Net income/(loss), Group share |
156 |
-217 |
290 |
420 |
Unrealized foreign exchange gains and losses, net |
-135 |
79 |
82 |
56 |
Change
in fair value of financial assets and liabilities
(derivatives) |
-20 |
21 |
-29 |
-53 |
Non-current income and expenses |
22 |
6 |
131 |
12 |
Tax
impact on gross adjustments net result |
39 |
-39 |
-52 |
-4 |
Restated net income/(loss), group part |
62 |
-150 |
422 |
431 |
Coupons
on perpetual |
-4 |
-6 |
-17 |
-25 |
Restated net income/(loss), group share including coupons
on perpetual (used to calculate earnings per share) |
58 |
-156 |
405 |
406 |
Restated net income/(loss) per share (in €) |
0.14 |
-0.36 |
0.95 |
0.95 |
Return on capital employed (ROCE)1
In million euros |
31 Dec 2019 |
31 Dec 2018 |
31 Dec 2018 |
30 Dec 2017 |
Goodwill and intangible assets |
1,522 |
1,411 |
1,411 |
1,338 |
Flight
equipment |
11,334 |
10,308 |
10,308 |
9,728 |
Other
property, plant and equipment |
1,580 |
1,503 |
1,503 |
1,418 |
Right of
use assets |
5,173 |
5,664 |
5,664 |
6,216 |
Investments in equity associates |
307 |
311 |
311 |
301 |
Financial
assets, marketable securities and financial deposits |
146 |
133 |
133 |
113 |
Provisions, excluding pension, cargo litigation and
restructuring |
-4,058 |
-3,776 |
-3,776 |
-3,456 |
WCR,
excluding market value of derivatives |
-6,309 |
-6,133 |
-6,133 |
-5,896 |
Capital employed |
9,695 |
9,421 |
9,421 |
9,762 |
Average capital employed (A) |
9,558 |
9,592 |
Income
from current operations |
1,141 |
1,405 |
-
Dividends received |
-2 |
-2 |
- Share
of profits (losses) of associates |
23 |
15 |
-
Normative income tax |
-345 |
-421 |
Income from current operations after tax, trailing 12
months (B) |
817 |
997 |
ROCE, trailing 12 months (B/A) |
8.5% |
10.4% |
Net debt
|
Balance sheet at |
€m |
31 Dec 2019 |
31 Dec 2018 |
Financial debt |
6,886 |
6,216 |
Lease
debt |
4,029 |
4,450 |
Currency
hedge on financial debt |
4 |
7 |
Accrued
interest |
-62 |
-67 |
Gross financial debt (A) |
10,857 |
10,606 |
Cash and
cash equivalents |
3,715 |
3,585 |
Marketable securities |
111 |
74 |
Cash
securities |
300 |
265 |
Deposits
(bonds) |
585 |
522 |
Bank
overdrafts |
-4 |
-5 |
Others |
3 |
1 |
Net cash (B) |
4,710 |
4,442 |
Net debt (A) – (B) |
6,147 |
6,164 |
Adjusted operating free cash
flow
|
Fourth quarter |
Full year |
€m |
2019 |
2018 |
2019 |
2018 |
Net cash flow from operating activities, continued operations |
877 |
893 |
3,895 |
3,798 |
Investment in property, plant, equipment and intangible assets |
-1,134 |
-706 |
-3,372 |
-2,844 |
Proceeds
on disposal of property, plant, equipment and intangible
assets |
16 |
37 |
100 |
133 |
Operating free cash flow |
-241 |
224 |
623 |
1,087 |
Payments on lease debt |
-260 |
-236 |
-1,008 |
-972 |
Adjusted operating free cash flow |
-501 |
-12 |
-385 |
115 |
Unit cost: net cost per ASK
|
Fourth quarter |
Full year |
|
2019 |
2018 |
2019 |
2018 |
Revenues (in €m) |
6,618 |
6,495 |
27,189 |
26,227 |
Income/(loss) from current operations (in €m) -/- |
-96 |
-53 |
-1,141 |
-1,405 |
Total
operating expense (in €m) |
6,522 |
6,442 |
26,048 |
24,822 |
Passenger
network business – other revenues (in €m) |
-178 |
-204 |
-711 |
-640 |
Cargo
network business – other revenues (in €m) |
-79 |
-81 |
-310 |
-300 |
Third-party revenues in the maintenance business (in €m) |
-515 |
-490 |
-2,138 |
-1,920 |
Transavia
- other revenues (in €m) |
-7 |
2 |
10 |
3 |
Third-party revenues of other businesses (in €m) |
-7 |
-10 |
-34 |
-38 |
Net cost (in €m) |
5,736 |
5,659 |
22,865 |
21,927 |
Capacity produced, reported in ASK* |
81,363 |
79,793 |
332,473 |
323,034 |
Net cost per ASK (in € cents per ASK) |
7.05 |
7.09 |
6.88 |
6.79 |
Gross change |
|
-0.6% |
|
1.3% |
Currency effect on net costs (in €m) |
|
54 |
|
305 |
Change at constant currency |
|
-1.5% |
|
-0.1% |
Fuel price effect (in €m) |
|
-4 |
|
188 |
Net cost per ASK on a constant currency and fuel price
basis (in € cents per ASK) |
7.05 |
7.16 |
6.88 |
6.94 |
Change at constant currency and fuel price
basis |
|
-1.5% |
|
-0.9% |
* 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
|
Fourth quarter |
Full year |
|
2019 |
Change |
2019 |
Change |
Revenue (in €m) |
4,056 |
+1.9% |
16,588 |
+4.6% |
EBITDA
(in €m) |
466 |
+33 |
2,171 |
+0 |
Operating result (en m€) |
-19 |
+30 |
280 |
-41 |
Operating margin (%) |
-0.5% |
+0.8 pt |
1.7% |
-0.3 pt |
Operating cash flow before WCR and restructuring cash out (in
€m) |
386 |
+113 |
1,953 |
+161 |
Operating cash flow (before WCR and restructuring) margin |
9.5% |
+2.7 pt |
11.8% |
+0.5 pt |
KLM
Group |
Fourth quarter |
Full year |
|
2019 |
Change |
2019 |
Change |
Revenue (in €m) |
2,690 |
+1.4% |
11,075 |
+1.7% |
EBITDA
(in €m) |
405 |
+30 |
1,943 |
-177 |
Operating result (en m€) |
119 |
+7 |
853 |
-238 |
Operating margin (%) |
4.4% |
+0.2 pt |
7.7% |
-2.3 pt |
Operating cash flow before WCR and restructuring cash out (in
€m) |
435 |
+133 |
1,813 |
+21 |
Operating cash flow (before WCR and restructuring) margin |
16.2% |
+4.8 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 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 |
|
8 |
|
8 |
|
|
8 |
8 |
-3 |
B777-300 |
43 |
14 |
|
14 |
21 |
22 |
57 |
57 |
|
B777-200 |
25 |
15 |
|
25 |
1 |
14 |
40 |
40 |
|
B787-9 |
9 |
13 |
|
7 |
3 |
12 |
22 |
22 |
2 |
B787-10 |
|
4 |
|
3 |
1 |
|
4 |
4 |
4 |
A380-800 |
10 |
|
|
1 |
4 |
5 |
10 |
10 |
|
A350-900 |
3 |
|
|
1 |
2 |
|
3 |
3 |
3 |
A340-300 |
4 |
|
|
4 |
|
|
4 |
4 |
-2 |
A330-300 |
|
5 |
|
|
|
5 |
5 |
5 |
|
A330-200 |
15 |
8 |
|
11 |
|
12 |
23 |
23 |
|
Total Long-Haul |
109 |
67 |
0 |
74 |
32 |
70 |
176 |
176 |
4 |
B737-900 |
|
5 |
|
2 |
|
3 |
5 |
5 |
|
B737-800 |
|
31 |
73 |
29 |
10 |
65 |
104 |
104 |
10 |
B737-700 |
|
16 |
7 |
3 |
5 |
15 |
23 |
23 |
-2 |
A321 |
20 |
|
|
11 |
|
9 |
20 |
20 |
|
A320 |
44 |
|
|
3 |
5 |
36 |
44 |
43 |
|
A319 |
33 |
|
|
20 |
|
13 |
33 |
33 |
-1 |
A318 |
18 |
|
|
17 |
1 |
|
18 |
18 |
|
Total Medium-Haul |
115 |
52 |
80 |
85 |
21 |
141 |
247 |
246 |
7 |
ATR72-600 |
3 |
|
|
|
|
3 |
3 |
2 |
-4 |
ATR72-500 |
|
|
|
|
|
|
|
|
-1 |
ATR42-500 |
1 |
|
|
|
|
1 |
1 |
|
-6 |
Canadair
Jet 1000 |
14 |
|
|
14 |
|
|
14 |
14 |
|
Canadair
Jet 700 |
11 |
|
|
11 |
|
|
11 |
10 |
-1 |
Embraer
190 |
15 |
32 |
|
8 |
13 |
26 |
47 |
47 |
4 |
Embraer
175 |
|
17 |
|
3 |
14 |
|
17 |
17 |
|
Embraer
170 |
15 |
|
|
9 |
1 |
5 |
15 |
15 |
|
Embraer
145 |
17 |
|
|
14 |
3 |
|
17 |
13 |
-5 |
Total Regional |
76 |
49 |
0 |
59 |
31 |
35 |
125 |
118 |
-13 |
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 |
172 |
80 |
224 |
84 |
246 |
554 |
546 |
-2 |
1 The Air France strike had a -335 million euros impact on the
Full year 2018 operating result
2 Passenger unit revenue is the aggregate of Passenger network
and Transavia unit revenues, change at constant currency
3 All flights to China were suspended as of 30 January 2020. Air
France-KLM Group Mainland China network ASKs at 16.5 billion in
2019, representing 5.5% of the total Network Passenger activity
4 Based on the forward curves of 14 February 2020, average Brent
price of USD 57, average jet fuel price of USD 605 per ton
including into plane costs. Assuming exchange rate of EUR/USD of
1.11 in 2020
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 exists,
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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