Avation Plc · LSE:AVAP
Avation — FY2017 Earnings Presentation
19 slides from Avation's earnings presentation, Sep 7, 2017
Slide 1: Financial Year 2017 Investor Update
LSE: AVAP Financial Year 2017 Investor Update 7 September 2017 Presented by: Jeff Chatfield Richard Wolanski Robert Heese Iain Cawte Duncan Scott Executive Chairman Finance Director Chief Financial Officer Treasury & Risk General Counsel
Slide 2: Important Notice
Important Notice NOT FOR RELEASE PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN, OR INTO UNITED STATES, AUSTRALIA, CANADA, JAPAN, SINGAPORE OR SOUTH AFRICA. This presentation and any accompanying management discussion of this presentation (the "Presentation") are confidential and being given
Slide 3: Avation Snapshot
Avation Snapshot 35 11 60/40 9 Balance of High Demand Aircraft Airline Customers Countries Covered narrowbody/regional aircraft by value 3.3 Years 7.5 Years 12.8% US$901M Average Remaining Lease Yield Average Aircraft Age Total asset value Lease Term 3.3 3
Slide 4: 5 Year Performance History
5 Year Performance History Total Fleet Average Age of Aircraft Average Remaining Lease Term Years Years 50 12.0 12.0 10.6 10.0 10.0 40 35 7.8 7.5 8.0 8.0 30 6.0 6.0 20 15 3.3 4.0 4.0 10 2.0 2.0 0 0.0 0.0 FY 2012 FY 2017 FY 2012 FY 2017 FY 2012 FY 2017 Lease Revenue(1) Operating Profit(1) Total Asset
Slide 5: Financial Year 2017 Results
Financial Year 2017 Results Lease Revenue Operating Profit (EBIT) US$94.2 million US$60.2 million +32% YoY +32% YoY Total Profit after Tax Operating Cashflow US$21.3 million US$63.0 million +16% YoY +20% YoY Total Assets Earnings per Share US$901.1 million US 36.3 cents +8% YoY +6% YoY 5
Slide 6: 2017 Operational Highlights
2017 Operational Highlights Fleet Diversification and Renewal • Four new A321 aircraft delivered to VietJet • Sale of six ATR aircraft to Chorus, and three Airbus A321 jets • Five oldest aircraft in fleet (Fokker 100) converted to finance lease Fleet metrics • Weighted average fleet age decreased to
Slide 7: Profitability Review
Profitability Review Lease Yield Operating Profit Margin 12.8% 63.9% 2016: 12.3% 2016: 64.0% Profit Before Tax Administrative Expense/ $21.4 million Lease Revenue +18% YoY 8.5% 2016: 10.6% Average Cost of Dividend Secured Debt (1) $0.06 per share 4.5% +85% YoY 2016: 4.3% 1. Weighted average as at 30
Slide 8: Industry Update: Aircraft Leasing Industry
Industry Update Aircraft Leasing Industry 1 • Lessors own 43% of commercial passenger aircraft • Airlines to take delivery of over 1,850 new aircraft in 2 2017 2 Global Passenger Traffic • Passenger growth of 7.4% in 2017 • Airline average load factors at 80.6% 2 Airline Profitability • Airline indu
Slide 9: Leasing Business Objectives
Leasing Business Objectives Strong Diversify Fleet revenue Metrics Increase Profit Scale & Control Growth Costs 9
Slide 10: Low Risk Market Positioning
Low Risk Market Positioning Avation: • Business model of young aircraft with long lease terms • Diversified fleet of aircraft and airline customers • Asia-Pacific and Europe focus • One of small number of lessors with access to ATR aircraft • US$ revenue, assets and dividend Avation has low exposure
Slide 11: Fleet Overview (at 30 June 2017)
Fleet Overview (at 30 June 2017) Added 1st Aircraft Type Fleet Orders Options half 2018 ATR 72-600 13 2 6 27 ATR 72-500 6 - - - A321-200 8 - - - A320-200 3 - - - Fokker 100 5 - - - Total 35 2 6 27 11
Slide 12: Airline Customers
Airline Customers Increasing Diversification Air Quick Duck Pacific Air Berlin VietJet Condor Air Pacific Air India Air France 2% 4% 2% Condor 1% Others 3% 1% Air Berlin 4% 4% 6% 1% 4% Condor Air France UNI Airways 5% 4% 5% Air UNI Air India Pacific Airways 5% VAA 5% Air India VAA 38% 4% 7% 54% Thom
Slide 13: Fleet Growth
Fleet Growth Fleet assets (US$m) 800 600 400 200 0 2011 2012 2013 2014 2015 2016 2017 13
Slide 14: Operating Fleet Metrics
Operating Fleet Metrics Period FY 2014 FY 2015 FY 2016 FY 2017 Fleet 25 29 38 35 Fleet additions (net) 2 4 9 (3) Weighted average fleet age 6.1 yrs 5.3 yrs 4.2 yrs 3.3 yrs Weighted average lease term 7.1 yrs 6.5 yrs 6.8 yrs 7.5 yrs Weighted Average Age of Fleet (years) Weighted Average Remaining Lea
Slide 15: Profit & Loss Summary
Profit & Loss Summary Profit & Loss Summary (US$ million) FY2017 FY2016 Growth Lease revenue and Other income 95.3 74.2 28% Depreciation expense (32.3) (23.2) 39% Gains on sale (net of impairment) 5.4 2.8 94% Administrative expense (8.0) (7.5) 7% Other expenses (0.1) (0.7) Operating Profit/EBIT 60.2
Slide 16: Debt Analysis
Debt Analysis FY2017 FY2016 Net Indebtedness (US$ million) 561.1 567.5 Weighted Average Cost of Secured Debt 4.5% 4.3% Proportion of Fixed Interest Rate Debt 95.1% 91.6% Debt/EBITDA 7.0 9.0 Cost of debt 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 2H 2013 1H 2014 2H 2014 1H 2015 2H 2015 1H
Slide 17: Key Ratios
Key Ratios Comparative Ratios FY2017 FY2016 Lease Yield(A) 12.8% 12.3% Administrative Expense/Lease Revenue 8.5% 10.6% Credit Ratios Debt/Total Assets 72.0% 74.0% Net Leverage (B) 2.9 3.3 Operating Cashflow/Debt 9.7% 8.5% EBITDA/Interest Expense 2.5 2.6 A. Lease Yield = Lease Revenue/Average NBV B.
Slide 18: Summary
Summary Strong Financial Results Attractive Industry Dynamics Leading Fleet Metrics Increased Airline and Aircraft Diversification Experienced Management Primed for Growth 18
Slide 19: Question & Answer Section
Question & Answer Section Avation PLC 65 Kampong Bahru Road Singapore 169370 Phone: + 65 6252 2077 www.avation.net Jeff Chatfield Richard Wolanski Robert Heese Iain Cawte Duncan Scott Executive Chairman Finance Director Chief Financial Officer Treasury & Risk Group General Counsel [email protected] r