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Thursday, 16 February 2017

AIR FRANCE - KLM: FULL YEAR 2016 RESULTS

     

Published: 07:15 CET 16-02-2017 /GlobeNewswire /Source: AIR FRANCE - KLM / : AF /ISIN: FR0000031122


Full Year 2016 results

 

 

FULL YEAR 2016

  • Results in line with target, main KPIs show improvement
  • Operating income at 1,049 million euros, up 269 million and up 558 million excluding currency effects
  • Net result group share at 792 million euros, up 674 million.
  • Continuous decrease in ex-fuel unit costs at constant currency and pension costs, down 1.0% in line with target and down 1.7% excluding strike impact and profit-sharing expenses
  • Free cash flow after disposals of 693 million euros contributing to a further 652 million euro decrease in net debt
  • Adjusted net debt / EBITDAR ratio of 2.9x, an improvement of 0.5 points compared to 31 December 2015
  • 93.4 million passengers carried, up 4.0%

 

 

OUTLOOK

  • High level of uncertainty regarding unit revenue and fuel price due to geopolitical, economical and airline industry capacity environment
  • Resilient start to 2017
  • Smart growth in passenger operations, an increase in available seat kilometres of between 3.0% and 3.5% at Group level in 2017
  • Continued focus on unit cost reduction, targeting a minimum of 1.5% in 2017 at constant currency, fuel price and pension expense
  • Based on current forward prices and the hedge portfolio, a fuel bill increase limited to 100 million dollars in 2017
  • Maintaining strict capex discipline, targeting positive free cash flow before disposals in 2017
  • Further net debt reduction, adjusted net debt / EBITDAR ratio below 2.5x mid cycle by end 2020

 

 

 

The Board of Directors of Air France-KLM, chaired by Jean-Marc Janaillac, met on 15th February 2017 to approve the accounts for the Full Year 2016.

 

Jean-Marc Janaillac made the following comments: "Within a contrasting environment, Air France-KLM delivered an improvement in its 2016 results, reflecting the initiatives and efforts of its employees and the loyalty of customers. While the fall in the oil price significantly reduced the Group's costs, the geopolitical context, competition and industry overcapacity all resulted in lower unit revenues. With Trust Together, our strategic project, we are resolutely committed to regaining the offensive, reinforcing our ability to innovate and improving our competitiveness. In an economic and geopolitical context that remains very uncertain, and faced with aggressive competition, the status quo is not an option."

 


 

Key data

 

 

Fourth Quarter

Full Year

 

2016

2015*

Change

2016

2015*

Change

Passengers (thousands)

22,608

21,338

+6.0%

93,442

89,836

+4.0%

Capacity (EASK m)

83,575

81,639

+2.4%

341,334

337,994

+1.0%

Revenues (€m)

6,086

6,242

-2.5%

24,844

25,689

-3.3%

EBITDAR (€m)

846

797

+49

3,787

3,414

+373

EBITDA (€m)

571

532

+39

2,714 

2,387 

+327

Operating result (€m)

94

137

-43

1,049

780

+269

Operating margin (%)

1.5%

2.2%

-0.7 pt

4.2%

3.0%

+1.2 pt

Lease adjusted operating result ((€m)

186

225

-39

 1,407 

 1,122 

+285

Lease adjusted operating margin (%)

3.1%

3.6%

-0.5 pt

5.7%

4.4%

+1.3 pt

Net result, group share (€m)

362

276

+86

792

118

+674

Free cash flow after disposal (€m)

446

67

+379

693

925

-232

Net debt at end of period (€m)

 

 

 

 3,655 

 4,307 

-652

* Reclassification of Servair as a discontinued operation: the consolidated financial statements of the Group were revised as of 1st January 2016 in order to reflect Servair as a discontinued operation. The 2015 financial statements have been restated accordingly. Details of this restatement can be found in the appendix of this press release.

 

Air France-KLM carried 93.4 million passengers in 2016, an increase of 4.0% over last year. Revenues amounted to 24.8 billion euros, down 3.3% compared to 2015.

 

The full year 2016 results were in line with targets with the main KPIs showing an improvement. The operating result stood at 1,049 million euros, up 269 million and up 558 million euros excluding currency effects. The operating result was notably impacted by a pilots strike in June and a cabin crew strike in July, which had a negative effect of 130 million euros. Adjusted for the interest portion of operating leases (1/3 of annual operating lease expenses), the operating margin was 5.7% versus 4.4% at 31 December 2015. EBITDA amounted to 2,714 million euros, an increase of 327 million euros

 

The increase in the 2016 operating result was mainly driven by the fuel tailwind and the good cost performance, while there were negative effects coming from the pressure on unit revenues and currencies. The unit cost per EASK was down in line with the target of 1.0%, on a constant currency, fuel price and pension-related expense basis, against a capacity increase measured in EASK of +1.0%. On a strike-adjusted basis and corrected for the increase in profit-sharing expenses, the unit cost per EASK decreased by 1.7%.

 

The average number of staff decreased by 1,850 FTEs (1,400 FTEs at Air France, 450 FTEs at KLM), resulting in a productivity increase measured in EASK per FTE of 2.3% at Air France and of 4.2% at KLM. As a result, on a constant pension-related expense and profit-sharing basis, employee costs decreased by 0.5% due to restructuring efforts in both Air France and KLM, taking into account a net increase in the profit-sharing expense of 77 million euros. Total employee costs including temporary staff were stable (up 0.1%) at 7,474 million euros.

 

The fuel bill amounted to 4,597 million euros, a sharp 25.7% fall compared to 2015. The decrease was driven by the drop in the fuel market price which had a positive impact of 927 million euros and the drop in fuel hedging losses which were down 605 million euros compared to 2015.

 

In the full year 2016, currencies had a negative 97 million euro impact on revenues, mainly driven by the weakening of several currencies, notably the GBP, BRL and CNY. The negative effect of currencies on costs amounted to 192 million euros driven by the strengthening of the dollar. The net impact of currencies on the operating result thus amounted to a negative 289 million euros.

 

All businesses contributed to the improvement in operating result. The passenger network operating result amounted to 1,057 million euros, up 215 million euros and up 456 million euros excluding the negative currency effect. Despite the challenging operating environment, the Cargo results remained stable on a reported basis, whereas both Maintenance and Transavia recorded further improvement in their operating results.

 

Both Air France and KLM contributed positively to the results. Full year 2016 operating result stood at 372 million euros at Air France and amounted to 681 million euros at KLM.

 

 

Full Year

Operating result per airline (€m)

2016

2015*

Change

Air France

372

426

-54

Operating Margin (%)

2.4%

2.6%

-0.2 pt

KLM

681

384

+297

Operating Margin (%)

6.9%

3.9%

+3.0 pt

* Reclassification of Servair as a discontinued operation. Sum of individual airline results does not add up to Air France-KLM total due to intercompany eliminations at Group level

 

 

Passenger network business

 

 

Fourth Quarter

Full Year

Passenger network

2016

2015

Change

2016

2015

Change

Passengers (thousands)

19,768

19,156

+3.2%

80,163

79,016

+1.5%

Capacity (ASK m)

68,912

67,634

+1.9%

278,807

276,897

+0.7%

Traffic (RPK m)

58,427

56,719

+3.0%

238,183

235,715

+1.0%

Load factor 

84.8%

83.9%

+0.9 pt

85.4%

85.1%

+0.3 pt

Total passenger revenues (€m)

4,799

4,983

-3.7%

19,682

20,541

-4.2%

Scheduled passenger revenues (€m)

4,599

4,787

-3.9%

18,849

19,707

-4.4%

Unit revenue per ASK (€ cts)

6.67

7.08

-5.7%

6.76

7.12

-5.0%

Unit revenue per RPK (€ cts)

7.87

8.44

-6.7%

7.91

8.36

-5.3%

Unit cost per ASK (€ cts)

6.57

6.85

-4.1%

6.38

6.81

-6.3%

Operating result (€m)

74

156

-82

1,057

842

+215

  Of which long-haul (estimated)

 

 

 

1,320

1,070

+250

  Of which medium-haul hub feeding (est.)

 

 

 

-220

-160

-60

  Of which medium-haul point-to-point (est.)

 

 

 

-50

-70

+20

 

A strong passenger network performance with relatively resilient unit revenues. Strict capacity discipline (available seat kilometer (ASK) up by 0.7%) and active yield management limited the downward pressure on unit revenue, particular on premium traffic, whose long-haul unit revenue declined by 1.4%. Ancillary revenues (paid options) were up by 12% amounting to 515 million euros.

 

On the long-haul network, capacity measured in ASKs was up 0.6%, while unit revenue was down 4.7% excluding currency impact. In addition to the soft local flows to France as a result of terrorism, the capacity-demand imbalances observed on different parts of the network caused additional downward pressure on unit revenues. Nevertheless, the estimated long-haul operating result was up 250 million euros to 1,320 million euros.

 

On the medium-haul hub feeding activity, capacity increased by 2.0%, whereas unit revenues decreased by 5.4% excluding currency. The medium-haul network was particularly impacted by the weak local flows to France affecting the operating result which decreased by 60 million euros.

 

As planned, medium-haul point-to-point capacity was further reduced by 3.9%, leading to an improvement in unit revenues of 1.0%, contributing to the 20 million euros improvement in the point-to-point operating result.

 

 

 

 


 

Cargo business

 

 

Fourth Quarter

Full Year

Cargo

2016

2015

Change

2016

2015

Change

Tons (thousands)

293

309

-5.0%

1,130

1,206

-6.2%

Capacity (ATK m)

3,491

3,635

-4.0%

14,228

14,912

-4.6%

Traffic (RTK m)

2,207

2,296

-3.9%

8,441

9,007

-6.3%

Load factor 

63.2%

63.2%

+0.0 pt

59.3%

60.4%

-1.1 pt

Total Cargo revenues (€m)

546

612

-10.8%

2,069

2,425

-14.7%

Scheduled cargo revenues (€m)

500

567

-11.8%

1,904

2,263

-15.9%

Unit revenue per ATK (€ cts)

14.3

15.6

-8.1%

13.4

15.2

-11.8%

Unit revenue per RTK (€ cts)

22.7

24.7

-8.0%

22.6

25.1

-10.2%

Unit cost per ATK (€ cts)

15.2

16.2

-6.6%

15.1

16.8

-10.2%

Operating result (€m)

-28

-23

-5

-244

-245

+1

 

The Group continued to restructure its Cargo activity resulting in its gradual turnaround, in order to address the weak global trade and structural industry overcapacity, and to maximize its contribution to the Group.  During full year 2016, full-freighter capacity was reduced by 24% with a reduction of the number of full-freighters in operation to six, leading to a 4.6% decrease in total Cargo capacity measured in ATK. The ex-fuel unit cost was down 2.6% like-for-like as a result of the restructuring efforts, mainly driven by the 6.7% headcount reduction over the course of the year, while productivity measured in ATK per FTE increased by 2.3%. The losses on the full-freighters were further reduced by 14 million euros resulting in an operating loss of 28 million euros.

 

It has been decided to change the Cargo reporting as per fiscal year 2017 based on contribution margin and to include it in the passenger network results. This change will be effective as from the Q1 2017 results presentation.

 

Maintenance business

 

 

Fourth Quarter

Full Year

Maintenance

2016

2015

Change

2016

2015

Change

Total revenues (€m)

1,130

1,075

+5.1%

4,182

3,987

+4.9%

Third party revenues (€m)

486

429

+13.3%

1,834

1,577

+16.3%

Operating result  (€m)

66

47

+19

238

214

+24

Operating margin (%)

5.8%

4.4%

+1.4 pt

5.7%

5.4%

+0.3 pt

 

In full year 2016, both third party revenues and the operating result further increased, strengthening the growth of the Maintenance business and securing its position as world leader in the airline MRO business. Third-party revenues amounted to 1,834 million euros, up by 16% driven by the contracts gained over the past few years. Over the period, the maintenance order book recorded a 6.0% increase to reach a year-end record of 8.9 billion dollars, including several new A350 and B787 support contracts, and securing future growth and its ambition of value creation. The operating margin was up by 0.3 points to 5.7% (operating result / total revenues) driven by the growth in the Engine and Component segments and the increase in contribution margin from the Airframe business.

 

 


 

Transavia

 

 

Fourth Quarter

Full Year

Transavia

2016

2015

Change

2016

2015

Change

Passengers (thousands)

2,840

2,182

+30.2%

13,279

10,820

+22.7%

Capacity (ASK m)

5,646

4,592

+20.2%

25,762

22,432

+14.8%

Traffic (RPK m)

4,959

4,007

+18.8%

22,983

20,169

+14.0%

Load factor 

87.9%

87.2%

+0.6 pt

89.2%

89.9%

-0.7 pt

Total passenger revenues (€m)

245

207

+18.4%

1,218

1,099

+10.8%

Scheduled passenger revenues (€m)

241

205

+17.6%

1,206

1,086

+11.0%

Unit revenue per ASK (€ cts)

4.27

4.41

-3.1%

4.68

4.84

-3.3%

Unit revenue per RPK (€ cts)

4.86

5.05

-3.8%

5.24

5.38

-2.5%

Unit cost per ASK (€ cts)

4.57

5.21

-12.2%

4.68

5.00

-6.3%

Operating result (€m)

-17

-37

+20

0

-35

+35

 

 

The accelerated ramp-up of Transavia is on track, resulting in a break-even operating result for the full year 2016. Transavia currently serves more than 100 destinations and carrying 13.3 million passengers. Capacity in France was up by 23%, whereas capacity in the Netherlands was up by 11%. Transavia is now the number one low cost carrier in the Netherlands and at Paris Orly, capturing the growth in the European leisure market.

 

Financial situation

 

 

Full Year

In € million

2016

2015*

Change

Cash flow before change in WCR and Voluntary Departure Plans, continuing operations

2,364

1,956

+408

Cash out related to Voluntary Departure Plans

-225

-172

-53

Change in Working Capital Requirement (WCR)

+67

+83

-16

Operating cash flow

2,206

1,867

+339

Net investments before sale & lease-back

-1,859

-1,278

-581

Cash received through sale & lease-back transactions

0

0

0

Net investments after sale & lease-back

-1,859

-1,278

-581

Operating free cash flow

347

589

-242

* Reclassification of Servair as a discontinued operation

 

Due to the disciplined growth in investments, the free cash flow before disposals was positive at 347 million euros. Investment in the fleet continued to improve its competitiveness resulting in fuel efficiencies, lower maintenance costs and move up-market in terms of products and services.

 

Net debt was further reduced thanks to free cash flow generation. As a result, net debt amounted to 3,655 million euros at 31 December 2016, versus 4,307 million euros at 31 December 2015, an improvement of 652 million euros despite currencies having a significant negative impact of 73 million euros. The Group sold a total of 4.95 millions of Amadeus shares representing 1.13% of the share capital and finalized the transaction to sell 49.99% of the Servair share capital and transfer its operational control to gategroup.

2016 is the fifth year of improvement in the adjusted net debt / EBITDAR ratio, which decreased to 2.9x at 31 December 2016 from 3.4x at 31 December 2015.

 

During the course of the year the liquidity situation was further strengthened and finance costs further reduced. The Group continues to enjoy a good level of liquidity, with net cash of 4.3 billion euros at 31 December 2016, and undrawn credit lines of 1.8 billion euros. In 2016, the Group successfully placed a six-year bond for 400 million euros and an issue of ten-year senior notes for 145 million US dollars.

 


 

Outlook

 

The global context remains highly uncertain regarding the geopolitical and economic environment in which we operate, fuel prices and the ongoing overcapacity on several markets, resulting in pressure on unit revenues.

 

However the January traffic statistics and forward bookings indicates a resilient start to the new year. In January 2017 the unit revenue was down by only 0.7% at constant currency for the passenger network and down only 0.6% at constant currency for Transavia.

The Group is targeting a growth for the passenger group (Air France, KLM and Transavia) of between 3.0% and 3.5% measured in ASKs for 2017 in order to regain the offensive in long-haul and to improve the performance in medium-haul.

 

To improve its competitiveness, the Group plans to act on all levels by pursuing and amplifying the initiatives already under way in terms of unit cost reduction. The unit cost reduction target for 2017 is in excess of 1.5% at constant currency, fuel price and pension related expenses.

 

Based on the forward curve of 27 January 2017, the Full Year 2017 fuel bill is expected to increase by 100 million dollars compared to 2016 and to reach 4.9 billion euros[1], and the Full Year 2018 fuel bill is expected to increase to 5.0 billion euros[2].

 

Regarding the balance sheet, the Group is maintaining strict capex discipline, targeting positive free cash flow before disposals. The 2017 investment plan stands at between 1.7 billion euros and 2.2 billion euros.

 

The Group is pursuing a further reduction in net debt, targeting an adjusted net debt to EBITDAR below 2.5x mid cycle by the end of 2020.

We plan to present the comprehensive Trust Together vision at the forthcoming Investor Day, scheduled for 12 May 2017.

 


 

 

*****

 

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 Registration Document.

 

The results presentation is available at www.airfranceklm.com on 16 February 2017 from 7:15 am CET.

 

An Analysts' Meeting hosted by Mr Janaillac (CEO) and Mr Gagey (CFO) will be held on 16 February 2017 at 08.30 CET at the Pullman Paris Tour Eiffel hotel, 18, avenue de Suffren (75015 Paris).

 

A live webcast of the Analysts' Meeting will also be available on the website (password AFKL).

 

To connect to the conference call, please dial:

  • France: +33 (0)1 76 77 25 06
  • Netherlands: +31 (0)20 703 8261
  • United Kingdom: +44 (0)203 043 2002
  • USA: +1 719-325-2226

Confirmation Code: 8241239

 

 

 

Investor relations

 

 

Press

Marie-Agnès de Peslouan

+33 1 41 56 56 00

Head of Investor Relations

 

Tel : +33 1 49 89 52 59

Email: madepeslouan@airfranceklm.com

 

 

 

 

Dirk Voermans

Senior manager, Investor Relations

Tel : +33 1 49 89 52 60

Email: divoermans@airfranceklm.com

 

 


 

INCOME STATEMENT

 

 

 

Fourth Quarter

Full Year

 

In millions euros

2016

2015*

Change

2016

2015*

Change

 

 

 

 

 

 

 

 

Sales

6,086

6,242

-2.5%

24,844

25,689

-3.3%

Other revenues

1

1

0.0%

2

2

0.0%

Revenues

6,087

6,243

-2.5%

24,846

25,691

-3.3%

Aircraft fuel

-1,090

-1,363

-20.0%

-4,597

-6,183

-25.7%

Chartering costs

-100

-105

-4.8%

-424

-430

-1.4%

Landing fees and en route charges

-463

-469

-1.3%

-1,900

-1,947

-2.4%

Catering

-109

-112

-2.7%

-445

-462

-3.7%

Handling charges and other operating costs

-369

-389

-5.1%

-1,565

-1,536

1.9%

Aircraft maintenance costs

-622

-715

-13.0%

-2,469

-2,372

4.1%

Commercial and distribution costs

-215

-193

11.4%

-905

-896

1.0%

Other external expenses

-498

-480

3.8%

-1,958

-1,942

0.8%

Salaries and related costs

-1,931

-1,882

2.6%

-7,474

-7,464

0.1%

Taxes other than income taxes

-39

-35

11.4%

-164

-155

5.8%

Other income and expenses

195

297

-34.3%

842

1,110

-24.1%

EBITDAR

846

797

6.1%

3,787

3,414

10.9%

Aircraft operating lease costs

-275

-265

3.8%

-1,073

-1,027

4.5%

EBITDA

571

532

7.3%

2,714

2,387

13.7%

Amortization, depreciation and provisions

-477

-395

20.8%

-1,665

-1,607

3.6%

INCOME FROM CURRENT OPERATIONS

94

137

-31.4%

1,049

780

34.5%

Sales of aircraft equipment

5

0

na

21

-5

nm

Other non-current income and expenses

153

217

-29.5%

46

305

-84.9%

INCOME FROM OPERATING ACTIVITIES

252

354

-28.8%

1,116

1,080

3.3%

Income from cash and cash equivalents

10

15

-33.3%

49

62

-21.0%

Cost of financial debt

-72

-81

-11.1%

-309

-372

-16.9%

Net cost of financial debt

-62

-66

-6.1%

-260

-310

-16.1%

Other financial income and expenses

45

6

-650%

-33

-604

94.5%

INCOME BEFORE TAX

235

294

-20.1%

823

166

N/A

Income taxes

-128

-25

412%

-294

-30

880%

NET INCOME OF CONSOLIDATED COMPANIES

107

269

-60.2%

529

136

289%

Share of profits (losses) of associates

-10

2

Na

-7

-35

-80%

INCOME FROM CONTINUING OPERATIONS

97

271

-64.2%

522

101

417%

Net income from discontinued operations

256

9

nm

270

26

939%

NET INCOME FOR THE PERIOD

353

280

26.1%

792

127

524%

Minority interest

9

-4

na

0

-9

nm

NET INCOME FOR THE PERIOD - GROUP

362

276

31.2%

792

118

571%

 

*  Reclassification of Servair as a discontinued operation


 

BALANCE SHEET

 

 

Assets

In million euros

December 31,

2016

December 31, 2015*

Goodwill

218

247

Intangible assets

1,066

1,018

Flight equipment

9,119

8,743

Other property, plant and equipment

1,480

1,670

Investments in equity associates

292

118

Pension assets

1,462

1,773

Other financial assets

1,064

1,224

Deferred tax assets

176

702

Other non-current assets

448

295

Total non-current assets

15,325

15,790

Assets held for sale

0

4

Other short-term financial assets

130

967

Inventories

566

532

Trade receivables

1,868

1,800

Other current assets

1,105

1,138

Cash and cash equivalents

3,938

3,104

Total current assets

7,607

7,545

Total assets

22,932

23,335

*  Reclassification of Servair as a discontinued operation

 

Liabilities and equity

In million euros

December 31,

2016

December 31, 2015*

Issued capital

300

300

Additional paid-in capital

2,971

2,971

Treasury shares

-67

-85

Perpetual

600

600

Reserves and retained earnings

-2,520

-3,561

Equity attributable to equity holders of Air France-KLM

1,284

225

Non-controlling interests

12

48

Total Equity

1,296

273

Pension provisions

2,119

1,995

Other provisions

1,673

1,513

Long-term debt

7,431

7,060

Deferred tax liabilities

-12

11

Other non-current liabilities

284

484

Total non-current liabilities

11,495

11,063

Provisions

654

742

Current portion of long-term debt

1,021

2,017

Trade payables

2,359

2,395

Deferred revenue on ticket sales

2,517

2,515

Frequent flyer programs

810

760

Other current liabilities

2,775

3,567

Bank overdrafts

5

3

Total current liabilities

10,141

11,999

Total equity and liabilities

22,932

23,335

*  Reclassification of Servair as a discontinued operation

 


 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

In € millions

2016

2015*

Net income from continuing operations

522

101

Net income from discontinued operations

270

26

Amortization, depreciation and operating provisions

1,665

1,632

Financial provisions

5

59

Loss (gain) on disposals of tangible and intangible assets

-86

-224

Loss (gain)on disposals of subsidiaries and associates

-312

-224

Derivatives - non monetary result

-179

91

Unrealized foreign exchange gains and losses, net

89

294

Share of (profits) losses of associates

6

30

Deferred taxes

264

4

Impairment

2

5

Other non-monetary items

-64

31

Subtotal

2,182

1,825

Of which discontinued operations

43

41

(Increase) / decrease in inventories

-61

36

(Increase) / decrease in trade receivables

-104

-55

Increase / (decrease) in trade payables

23

-64

Change in other receivables and payables

209

166

Change in working capital from discontinued operations

-10

-12

Net cash flow from operating activities

2,239

1,896

Acquisition of subsidiaries, of shares in non-controlled entities

-18

-6

Purchase of property plants, equipments and intangible assets

-2,072

-1,628

Proceeds on disposal of subsidiaries, of shares in non-controlled entities

364

342

Proceeds on disposal of property, plant and equipment and intangible assets

213

350

Dividends received

7

2

Decrease (increase) in net investments, more than 3 months

791

-208

Net cash flow used in investing activities of discontinued operations

-12

-14

Net cash flow used in investing activities

-727

-1,162

Perpetual

0-

600

Sale of minority interest without change in control

15

-

Issuance of debt

1,331

1,062

Repayment on debt

-1,430

-1,540

Payment of debt resulting from finance lease liabilities

-481

-661

New loans

-129

-87

Repayment on loans

43

140

Dividends and coupons on perpetual paid

-38

-19

Net cash flow used in financing activities of discontinued operations

22

1

Net cash flow from financing activities

-667

-504

Effect of exchange rate on cash and cash equivalents and bank overdrafts

-13

-43

Effect of exch. rate on cash and cash eq. and bank overdrafts of disc. ops.

0

4

Change in cash and cash equivalents and bank overdrafts

832

191

Cash and cash equivalents and bank overdrafts at beginning of period

3,101

2,910

Cash and cash equivalents and bank overdrafts at end of period

3,933

3,101

*  Reclassification of Servair as a discontinued operation


 

KEY FINANCIAL INDICATORS

 

EBITDA and EBITDAR

In million euros

Q4 2016

Q4 2015*

FY 2016

FY 2015*

Income/(loss) from current operations

94

137

1,049

780

Amortization, depreciation and provisions

476

395

1,665

1,607

EBITDA

571

532

2,714

2,387

Aircraft operating lease costs

276

265

1,073

1,027

EBITDAR

846

797

3,787

3,414

*  Reclassification of Servair as a discontinued operation

Restated net result, group share

In million euros

Q4 2016

Q4 2015*

FY 2016

FY 2015*

Net income/(loss), Group share (in €m)

362

276

792

118

Net income/(loss) from discontinued operations (in €m)

(256)

(9)

(270)

(26)

Unrealized foreign exchange gains and losses, net (in €m)

(32)

26

89

294

Change in fair value of financial assets and liabilities (derivatives) (in €m)

(48)

(67)

(179)

91

Non-current income and expenses (in €m)

(158)

(217)

(67)

(300)

Depreciation of shares available for sale (in €m)

0

3

0

16

De-recognition of deferred tax assets (in €m)

44

0

44

0

Restated net income/(loss), group share (in €m)

(88)

12

409

193

Restated net income/(loss) per share (in €)

-0.32

0.02

1.30

0.59

*  Reclassification of Servair as a discontinued operation

Return on capital employed (ROCE)

In million euros

31 Dec. 2016

31 Dec. 2015*

31 Dec. 2015*

31 Dec. 2014

Goodwill and intangible assets

1,284

1,265

1,265

1,252

Flight equipment

9,119

8,743

8,743

8,728

Other property, plant and equipment

1,480

1,670

1,670

1,750

Investments in equity associates

292

118

118

139

Financial assets excluding shares available for sale, marketable securities and financial deposits

224

225

225

152

Provisions, excluding pension, cargo litigation and restructuring

(1,706)

(1,558)

(1,558)

(1,434)

WCR, excluding market value of derivatives

(5,317)

(5,125)

(5,125)

(4,928)

Capital employed before operating leases

5,376

5,338

5,338

5,659

Operating leases x7

7,511

7,189

Average capital employed (A)

12,868

12,688

Adjusted results from current operations

1,414

1,129

- Dividends received

(2)

(2)

- Share of profits (losses) of associates

(7)

(35)

- Tax recognized in the adjusted net result

(250)

(30)

Adjusted result from current operations after tax (B)

1,155

1,062

ROCE, trailing 12 months (B/A)

9.0%

8.4%

*  Reclassification of Servair as a discontinued operation


 

Net debt

Balance sheet at

(In million euros)

31 December 
2016

31 December  2015*

Current and non-current financial debt

8,452

9,077

Deposits on aircraft under finance lease

(336)

-453

Financial assets pledged (OCEANE swap)

0

-393

Currency hedge on financial debt

(49)

-40

Accrued interest

(89)

-95

Gross financial debt (A)

7,978

8,096

Cash and cash equivalents

3,938

3,104

Marketable securities

53

466

Cash pledges

50

18

Deposits (bonds)

298

204

Bank overdrafts

(5)

(3)

Other

(11)

0

Net cash (B)

4,323

3,789

Net debt (A) - (B)

3,655

4,307

*  Reclassification of Servair as a discontinued operation

Adjusted net debt and adjusted net debt/EBITDAR ratio

 

31 December
2016

31 December  2015*

Net debt (in €m)

3,655

4,307

Aircraft operating leases x 7 (in €m)

7,511

7,189

Adjusted net debt (in €m)

11,166

11,496

EBITDAR (in €m)

3,787

3,414

Adjusted net debt/EBITDAR ratio

2.9 x

3.4 x

*  Reclassification of Servair as a discontinued operation

Operating free cash flow

In million euros

2016

2015*

Net cash flow from operating activities, continued operations

2,206

1,867

Investment in property, plant, equipment and intangible assets

(2,072)

(1,628)

Proceeds on disposal of property, plant, equipment and intangible assets

213

350

Operating free cash flow, excluding discontinued operations

347

589

Disposals

346

336

Operating free cash after disposal

693

925

*  Operating free cash flow is including the LHR slot sale in October 2015, which is accounted for in net investments as intangible asset disposal

 

Lease adjusted operating result

In million euros

Q4 2016

Q4 2015*

FY 2016

FY 2015*

Operating result

94

137

1,049

780

Aircraft operating leases x 1/3

92

88

358

342

Lease adjusted operating result

186

225

1,407

1,122

Lease adjusted operating margin

3.1%

3.6%

5.7%

4.4%

*  Reclassification of Servair as a discontinued operation


 

Unit cost: net cost per EASK

 

Q4 2016

Q4 2015*

FY 2016

FY 2015*

Revenues (in €m)

6,086

6,242

24,844

25,689

Income/(loss) from current operations  (in €m)

94

137

1,049

780

Total operating expense (in €m)

(5,992)

(6,105)

(23,795)

(24,909)

Passenger network business - other revenues (in €m)

200

196

833

834

Cargo business - other revenues (in €m)

46

45

165

162

Third-party revenues in the maintenance business (in €m)

486

429

1,834

1,577

Transavia - other revenues (in €m)

4

2

12

13

Third-party revenues of other businesses (in €m)

10

11

41

47

Net cost  (in €m)

5,246

5,422

20,910

22,276

Capacity produced, reported in EASK

83,575

81,639

341,334

337,994

Net cost per EASK (in € cents per EASK)

  6.28 

  6.64 

  6.13 

  6.59 

Gross change

 

-5.5%

 

-7.0%

Currency effect on net costs (in €m)

 

59

 

188

Change at constant currency

 

-6.5%

 

-7.8%

Fuel price effect (in €m)

 

(274)

 

(1,531)

Change on a constant currency and fuel price basis

 

-1.6%

 

-1.1%

Change in pension-related expenses (in €m)

 

-18

 

-28

Net cost per EASK on a constant currency, fuel price and pension-related expenses basis (in € cents per EASK)

  6.28 

  6.35 

6.13 

6.18 

Change on a constant currency, fuel price and pension-related expenses basis

 

-1.3%

 

-1.0%

*  Reclassification of Servair as a discontinued operation

 

INDIVIDUAL AIRLINE RESULTS

 

Air France

 

Q4 2016

Q4 2015*

Change

FY 2016

FY 2015*

Change

Revenue (€m)

3,836

3,952

-2.9%

15,414

16,099

-4.3%

EBITDA (€m)

393

364

+29

1,514

1,465

+49

Operating result (€m)

46

102

-56

372

426

-54

Operating margin

1.2%

2.6%

-1.4 pt

2.4%

2.6%

-0.2 pt

Operating cash flow before WCR and restructuring cash out (€m)

406

326

+80

1,441

1,315

+126

Operating cash flow (before WCR and restructuring) margin

10.6%

8.2%

+2.3 pt

9.3%

8.2%

+1.2 pt

*  Reclassification of Servair as a discontinued operation

 

KLM

 

Q4 2016

Q4 2015*

Change

FY 2016

FY 2015*

Change

Revenue (€m)

2,370

2,378

-0.3%

9,800

9,905

-1.1%

EBITDA (€m)

177

169

+8

1,189

911

+278

Operating result (€m)

52

39

+13

681

384

+297

Operating margin

2.2%

1.6%

+0.6 pt

6.9%

3.9%

+3.0 pt

Operating cash flow before WCR and restructuring cash out (€m)

166

129

+37

1,054

746

+308

Operating cash flow (before WCR and restructuring) margin

7.0%

5.4%

+1.6 pt

10.8%

7.5%

+3.2 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 2016

 

Aircraft type

AF

(incl. HOP!)

KL

(incl. KLC & Martinair)

Transavia

Owned

Finance
lease

Operating

lease

Total

In operation

Change /  31/12/15

B747-400

 

18

 

18

 

 

18

17

-8

B777-300

43

12

 

9

25

21

55

55

5

B777-200

25

15

 

19

10

11

40

40

 

B787-9

1

8

 

 

1

8

9

8

6

A380-800

10

 

 

1

4

5

10

10

 

A340-300

12

 

 

5

5

2

12

10

-2

A330-300

 

5

 

 

 

5

5

5

 

A330-200

15

8

 

4

7

12

23

23

-2

Total Long-Haul

106

66

0

56

52

64

172

168

-1

B737-900

 

5

 

1

1

3

5

5

 

B737-800

 

25

55

12

9

59

80

80

10

B737-700

 

18

8

3

8

15

26

26

 

A321

20

 

 

10

1

9

20

20

 

A320

43

 

 

5

3

35

43

41

-2

A319

38

 

 

19

6

13

38

38

 

A318

18

 

 

11

7

 

18

18

3

Total Short and Medium-Haul

119

48

63

61

35

134

230

228

11

ATR72-600

5

 

 

 

 

5

5

5

 

ATR72-500

5

 

 

2

2

1

5

5

-1

ATR42-500

12

 

 

5

3

4

12

12

-1

Canadair Jet 1000

14

 

 

14

 

 

14

14

 

Canadair Jet 700

11

 

 

11

 

 

11

11

-2

Canadair Jet 100

1

 

 

1

 

 

1

 

 

Embraer 190

10

30

 

4

15

21

40

40

 

Embraer 175

 

4

 

 

4

 

4

4

4

Embraer 170

15

 

 

8

2

5

15

15

-1

Embraer 145

18

 

 

13

5

 

18

15

-1

Embraer 135

4

 

 

4

 

 

4

 

 

Fokker 70

 

13

 

13

 

 

13

11

-5

Total Regional

95

47

0

75

31

36

142

132

-7

B747-400ERF

 

3

 

3

 

 

3

3

 

B747-400BCF

 

3

 

2

 

1

3

1

 

B777-F

2

 

 

2

 

 

2

2

 

MD-11

 

 

 

 

 

 

 

 

-3

Total Cargo

2

6

0

7

0

1

8

6

-3

 

 

 

 

 

 

 

 

 

 

Air France-KLM Group

322

167

63

199

118

235

552

534

 

 

 

 



[1] 2017 average Brent price of USD 56, average jet fuel market price of USD 535 per ton, average exchange rate of USD 1.07 per euro

[2] 2018 average Brent price of USD 56, average jet fuel market price of USD 555 per ton, average exchange rate of USD 1.07 per euro



AIR FRANCE-KLM: 2016 RESULTS



This announcement is distributed by Nasdaq Corporate Solutions (One Liberty Plaza, 165 Broadway, New York, NY 10006. Tel: +1 212 401 8700. www.nasdaqomx.com) on behalf of NASDAQ OMX Corporate Solutions clients. Source: AIR FRANCE - KLM, 2 rue de Robert-Esnault-Pelterie BP 93290, Paris FR-75007, France
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