LATAM Airlines Group SA · BCS:LTM
LATAM Airlines Group SA — Itau BBA 12th Annual Latam CEO Conference 2017
16 slides from LATAM Airlines Group SA's conference presentation, May 17, 2017
Slide 1: Itau BBA's 12th Annual Latam CEO Conference
Itau BBAs 12th Annual Latam CEO Conference New York, May 2017
Slide 2: Commitment to delivering results
Commitment to delivering results 2016 2017 Macro-economic volatility in the region Brazil macro recovery starting 2016 operating margin of 6.0% and first year of Focus on capacity discipline in Brazil net profit since 2011 Rightsizing fleet commitments in line with US$2.2 billion reducti
Slide 3: Consolidating LATAM as the leading airline in the region
Consolidating LATAM as the leading airline in the region Network New Domestic Cost Improving Leadership Business Model Competitiveness Results 3
Slide 4: Leader in Latin America and one of the largest airlines in the world
Leader in Latin America and one of the largest airlines in the world 184 “Best Airline in South America 2016” 145 143 125 110 101 93 67 55 52 45 34 33 31 29 26 20 9 8 Latin American airlines 4
Slide 5: LATAM Airlines Group: One Network One Brand
LATAM Airlines Group: Airlines Colombia One Network 21% market share One Brand Airlines Ecuador 31% market share Airlines Brazil Airlines Peru 35% market share 61% market share Airlines 76% market share Airlines Argentina 25% market share Data as of December 31, 2016 5 Sources: JAC, Aeronautica Civi
Slide 6: Redesign of LATAM's business model for 77% of our passengers
Redesign of LATAM’s business model for 77% of our passengers Revenue Capacity (ASK) Passengers Inter Wide Domestic Domestic Body SSC SSC 13% 20% 18% Domestic Inter Narrow Inter Wide Body SSC Body Inter Wide 34% Body 10% 40% Domestic 42% Domestic Brazil Brazil 28% 27% Domestic Inter Narrow Inter Narr
Slide 7: New domestic business model
New domestic business model: Increase competitiveness vs. ULCC More growth Sustainable margins More passengers 50% more domestic passengers by 2020 Lower fares Up to 20% reduction of base fares More ancillaries Clear opportunity for growth: First and second bag Changes / Flexibility Preferred
Slide 8: Implementation to be completed in 2017
Implementation to be completed in 2017 Colombia Peru Chile Ecuador Argentina Brazil Buy on Board May Jun Jun Feb 15 Mar 15 Apr 26 First Bag/Branded Fares June May May June n.a. Aug 8
Slide 9: Consistent drive for cost efficiency
Consistent drive for cost efficiency 3% ASK-equivalent reduction since 2013 212,237 208,723 206,198 210.000 14.000 205,538 12.000 200.000 16% reduction in Opex ex-fuel since 2013 (29% reduction in total Opex since 2013) 10.000 $8,598 190.000 $8,130 8.000 $7,299 $7,244 180.000 6.000 170.000 4.000 160
Slide 10: Focus on increasing productivity
Focus on increasing productivity Employees(1)/Aircraft # Aircraft and Average Seats # Employees 750 # aircraft 300 -16% (year end) 650 Narrow Body Fleet Wide Body Fleet Avg. # Seats 53,072 250 45,916 550 238 163 44,565 169 215 200 151 450 137 350 329 150 327 306 74 76 250 76 100 150 238 243 221 50 5
Slide 11: Results reflect the resilience of our business model
Results reflect the resilience of our business model Operating Revenues (US$Bn) EBIT (US$mm) Net income (US$mm) -12.6% EBIT Margin +1.9 pp -3.3 pp 102 69 66 6.1% 6.0% 4.1% 9.4% 12,5 44% increase in +6.3% fuel prices 10,1 9,5 -9.7% 513 514 568 -110 -219 2,3 2,5 219 152 2014 2015 2016 1Q16 1Q17 2014 2
Slide 12: Historically low fleet commitments for 2017 and 2018
Historically low fleet commitments for 2017 and 2018 Reduction of $2.2 bn in fleet assets for 2016-2018, in line with our announced target # of Aircraft 329 336 345 1.952 1.409 1.486 4Q 2015 2016 2017 2018 # of Aircraft 329 311 306 4Q 2016 1.952 469 555 2016 2017 2018 Lower fleet capex Lower fleet c
Slide 13: Focus on operating cash flow generation
Focus on operating cash flow generation 2016 free cash flow generation (in USD million) ($569) $1,526 $2,095 ($1,254) $64 $336 Adj. EBITDAR Aircraft rentals EBITDA Capex Change in working capital & Cash Flow from Operations others after Investments Source: Company filings. 13 (1) Does not include ai
Slide 14: Improvement in liquidity and leverage
Improvement in liquidity and leverage Adjusted Net Debt(1)/EBITDAR LTM Cash and Equivalents as % of LTM revenues 19,0% 18,0% 5,8x 5,3x 5,4x 14,5% 1.811 1.739 1.466 325 325 105 9.061 8.605 8.425 1.486 1.361 1.414 Dec 15 Dec 16 mar-17 Dec 15 Dec 16 mar-17 Cash Committed Lines & RCF Total Gross Debt Ad
Slide 15: Forward-looking statements disclaimer
This presentation may include forward-looking comments regarding the Company’s business outlook and anticipated financial and operating results. These expectations are highly dependent on the economy, the airline industry, commodity prices, international markets and external events. Therefore, they
Slide 16: Itau BBA's 12th Annual Latam CEO Conference
Itau BBAs 12th Annual Latam CEO Conference New York, May 2017
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