LATAM Airlines Group SA · BCS:LTM
LATAM Airlines Group SA — Q4 2017 Earnings Presentation
15 slides from LATAM Airlines Group SA's earnings presentation, March 2018
Slide 1: Fourth Quarter 2017 Results Presentation
Fourth Quarter 2017 Results Presentation March 2018
Slide 2: Full Year 2017 Highlights
Full Year 2017 Highlights Operating income improved 25.8% YoY reaching US$715MM, the highest amount in the history of LATAM Deepest transformation in the history of LATAM First year of revenue expansion since the combination between LAN and TAM, with RASK increases across all business units Containe
Slide 3: Fourth Quarter 2017 Financial Summary
Fourth Quarter 2017 Financial Summary (US$ Millions) 4Q17 4Q16 Change 2017 2016 Change Total Operating Revenues 2,768 2,569 7.7% 10,164 9,527 6.7% Passenger 2,275 2,112 7.7% 8,494 7,878 7.8% Cargo 337 309 9.0% 1,119 1,111 0.8% Others 156 148 5.5% 550 539 2.1% Total Operating Costs -2,498 -2,374 5.2%
Slide 4: Fourth Quarter 2017 Operating Statistics
Fourth Quarter 2017 Operating Statistics System Capacity Capacity Traffic Load Factor RASK (US Cents) International +3.8% +3.6% 86.1% 6.3 (Long Haul & Regional) 55% (-0.2 p.p.) (+5.6%) BRL 4Q17:+6.6%1 Domestic Brazil +0.9% +2.7% 84.7% 7.0 27% (+1.5 p.p.) (+4.0%) 18% SSC Domestic -0.2% +1.2% 82.3% 7.
Slide 5: Total costs excluding fuel were up by 1.6% in the fourth quarter
Total costs excluding fuel were up by 1.6% in the fourth quarter Total Costs US$MM 4Q17 4Q16 Change Wages & Benefits 520 497 +4.7% Fuel Cost 651 557 +16.9% Fleet Cost 507 472 +7.4% Others 819 848 -3.4% Operating Costs 2,498 2,374 +5.2% CASK 7.2 7.0 +2.9% Operating Costs ex fuel 1,847 1,817 +1.6% CAS
Slide 6: LATAM's operating fleet plan
LATAM’s operating fleet plan 329 307 316 322 +4 +14 +14 -26(1) -5 -8 10 11 9 10 76 77 75 78 Freighter Wide Body 243 223 228 234 Narrow Body 2016 2017 2018 2019 Fleet commitments US$1,952 US$326 US$714 US$1,213 (1) 21 redeliveries and 5 additional subleases 6
Slide 7: Significant improvements on operating cash flow generation
Significant improvements on operating cash flow generation Free cash flow(1) (USD billion) 1,379 549 LTM Dec '16 LTM Dec '17 Better operational results providing higher cash flows Positive impact from the negotiations related to our fleet plan (1) Cash flow from operating activities – Cash flow used
Slide 8: Continue improving main credit metrics and adjusting our fleet
Continue improving main credit metrics and adjusting our fleet December December Changes (US$ Million) 31, 2017 31, 2016 Cash & cash equivalents 1,614 1,486 +128 Cash & Cash RCF & commited credit lines 450 325 +125 equivalents Liquidity(1) 20.3% 19.0% +1.3pp Net Debt 6,277 7,119 -841 Adjusted Net De
Slide 9: Extended Debt Maturity Profile and Lowered Cost of Debt
Extended Debt Maturity(1) Profile and Lowered Cost of Debt Debt maturity by December 31, 2016 Total Gross Debt: US$8,6 Bn 1,544 1,440 1,120 1,105 906 573 501 370 331 207 141 33 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Secured Unsecured Debt maturity(2) by December 31, 2017 Total G
Slide 10: Fuel and FX hedging portfolio
Fuel and FX hedging portfolio LATAM Fuel Hedge (% estimated fuel consumption) 40% 44% 20% 23% 1Q18 2Q18 3Q18 4Q18 LATAM BRL Hedge (US$ mm) 100 100 100 60 1Q18 2Q18 3Q18 4Q18 Information as of February 2018 10
Slide 11: A transformation year for LATAM
A transformation year for LATAM Launched in all Segmented customer 700 self-service kiosks New premium menu in domestic markets offering through in 80 airports to date international long-haul within six months branded-fares flights Implemented Platinum certification Wi-Fi in Brazil’s Wide-body cabin
Slide 12: Strong focus on ancillary initiatives
Strong focus on ancillary initiatives 2017 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec UPG Biding Brazil Preferred Seat Sale New Sales Model ▪ Branded Fares (4 fares with pre-defined features for customer segmentation) Excess Baggage Charge Same Day Flight Change 12
Slide 13: Latin America's Biggest Network
Latin America’s Biggest Network 30 New Routes during 2017 and new destinations for 2018 2017 Domestic routes 2017 International routes Brazil Chile Belo Horizonte - Fortaleza Concepción - Antofagasta Cartagena Melbourne Belo Horizonte - Vitoria Concepción – Punta Arenas Mendoza Neuquén Fortaleza - M
Slide 14: Guidance 2018
Guidance 2018 2017 2018 guidance Passenger (ASK) International 3.8% 6% - 8% Domestic Brazil (3.6%) 2% - 4% Domestic Spanish Speaking Countries (0.1%) 6% - 8% Total 0.9% 5 – 7% Cargo (ATK) (7.1%) 1% - 3% Operating Margin (%) 7.0% 7.5% - 9.5% 14
Slide 15: Fourth Quarter 2017 Results Presentation
Fourth Quarter 2017 Results Presentation March 2018