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Friday, 3 November 2017

AIR FRANCE - KLM : THIRD QUARTER 2017 RESULTS STRONG OPERATING RESULT DRIVEN BY SOLID TRAFFIC AND INCREASE IN UNIT REVENUE

     

Published: 07:15 CET 03-11-2017 /GlobeNewswire /Source: AIR FRANCE - KLM / : AF /ISIN: FR0000031122


 
 
3rd of November 2017

 

THIRD QUARTER 2017 RESULTS

STRONG OPERATING RESULT DRIVEN BY SOLID TRAFFIC AND

INCREASE IN UNIT REVENUE

 

 

THIRD QUARTER 2017

  • The operating result stands at 1,022 million euros, up 38.7% compared to Q3 2016
  • Robust traffic resulting in an improved load factor, up 1.6 pt
  • Confirmation of the positive trend in Group (Passenger + Transavia) unit revenue per available seat kilometer (RASK) at constant currency: +4.1%

 

GOOD STRATEGIC AND COMMERCIAL MOMENTUM

  • Implementation of a new distribution strategy by adopting NDC
  • Upcoming launch of revamped Flying Blue program

 

FURTHER STRENGTHENING THE FINANCIAL STRUCTURE

  • Soft call exercise of the OCEANE 2023 bond leading to deleverage by up to 520 million euros
  • Finalizing the implementation of de-risked pension schemes for pilots and cabin crew in KLM

 

OUTLOOK

  • Based on current outlook, Q4 2017 unit revenues at constant currency compared to last year expected to be positive
  • Q4 2017 fuel bill in euros forecasted stable
  • Full year 2017 unit cost evolution at constant currency, fuel and pension charges expected slightly negative, and between -1.0 to -1.5% excluding load factor and profit sharing effect
  • Operating free cash flow 2017 above last year, with capex at € 2.2bn
  • Adjusted net debt to EBITDAR expected between 2.2x and 2.3x end 2017 (before acquisition in 2018 of a 31% stake in Virgin Atlantic)
  • On track to implement IFRS16 in 2018

 

The Board of Directors of Air France-KLM, chaired by Jean-Marc Janaillac, met on 2nd of November 2017 to approve the accounts for the Third Quarter 2017.

Jean-Marc Janaillac made the following comments: "The strong operating performance achieved by the Group in the third quarter reflects a sustained execution on our strategic priorities, as well as a robust business environment translated into solid traffic and unit revenue trends. We continued to move forward notably with the expansion of our network of strategic alliances and the implementation of a new distribution model. At the same time, we relentlessly pursued our efforts to strengthen our financial structure. All of these accomplishments demonstrate that Air France-KLM is well on track to deliver on Trust Together strategic priorities of growing revenues and improve competitiveness."

 

Air France-KLM Group

Third Quarter

Nine months

2017

Change

2017

Change

Passengers (thousands)

27,911

+5.1%

75,056

+6.0%

Unit revenue per ASK (€ cts)

7.03

+4.1%

6.75

+1.8%

Operating result (€m)

1,022

+38.7%

1,375

+44.0%

Net result - group (€m)

552

+1.5%

703

+63.5%

Operating free cash flow (€m)

125

+248

793

+543

Net debt at end of period (€m)

 

 

2,796

-859

 


 

Business Review

 

Network: Improvement in unit revenue in both the Passenger and Cargo network

Network

Third Quarter

Nine months

2017

Change

Change
constant currency

2017

Change

Change
constant currency

Capacity (EASK m)

86,312

+1.7%

 

243,247

+2.4%

 

Total revenues (€m)

6,205

+4.2%

+4.9%

16,995

+3.6%

+3.4%

Scheduled revenues (€m)

5,967

+4.9%

+5.6%

16,301

+4.1%

+4.0%

Unit revenue per EASK (€ cts)

6.92

+3.2%

+3.8%

6.70

+1.7%

+1.6%

Unit cost per EASK (€ cts)

6.01

-0.5%

-0.1 %

6.25

-0.2%

+0.7%

Operating result (€m)

782

+218m

+235m

1,091

+324m

+435m

 

The combined Passenger and Cargo operating result amounted to 782 million euros in Q3 2017, an improvement of 235 million euros at constant currency, driven by improvement in unit revenue in both  Passenger and Cargo.

 

Robust Third Quarter Traffic numbers confirming improvement in Passenger unit revenue

 

Third Quarter

Nine months

Passenger network

2017

Change

Change
constant currency

2017

Change

Change
constant currency

Passengers (thousands)

22,951

+5.4%

 

63,284

+4.8%

 

Capacity (ASK m)

76,710

+1.9%

 

215,512

+2.7%

 

Traffic (RPK m)

68,407

+3.9%

 

187,783

+4.5%

 

Load factor 

89.2%

+1.7 pt

 

87.1%

+1.5 pt

 

Total passenger revenues (€m)

5,712

+4.4%

+5.0%

15,492

+4.1%

+3.9%

Scheduled passenger revenues (€m)

5,512

+5.1%

+5.7%

14,911

+4.6%

+4.4%

Unit revenue per ASK (€ cts)

7.19

+3.2%

+3.7%

6.92

+1.9%

+1.7%

Unit revenue per RPK (€ cts)

8.06

+1.2%

+1.8%

7.94

+0.2%

-0.0%

 

The Passenger unit revenue continued to improve in Q3 up 3.7% at constant currency. On long haul, there was a strong premium class performance with unit revenues up by 8.3%, while economy class was up by 3.1%. The improvement continued to be driven mainly by the strong recovery in Asia with unit revenue up 8.8%, and Latin America up 12.1%.

 

Cargo turnaround continuing

 

Third Quarter

Nine months

Cargo business

2017

Change

Change
constant currency

2017

Change

Change
constant currency

Tons (thousands)

279

+0.1%

 

837

+0.0%

 

Capacity (ATK m)

3,726

-0.3%

 

10,745

+0.1%

 

Traffic (RTK m)

2,126

+0.6%

 

6,315

+1.3%

 

Load factor 

57.1%

+0.5 pt

 

58.8%

+0.7 pt

 

Total Cargo revenues (€m)

493

+1.2%

+3.2%

1,503

-1.3%

-1.1%

Scheduled cargo revenues (€m)

455

+1.8%

+3.6%

1,390

-1.0%

-0.9%

Unit revenue per ATK (€ cts)

12.22

+2.0%

+3.8%

12.93

-1.1%

-1.0%

Unit revenue per RTK (€ cts)

21.41

+1.1%

+2.8%

22.01

-2.2%

-2.2%

 

During Q3, the improvement in the Cargo performance was driven by an unit revenue increase of 3.8% at constant currency, confirming the continuation of the turnaround.

 

Transavia: Both France and Netherlands show outstanding performance in Q3 and will have positive operating result in 2017

 

 

Third Quarter

Nine months

Transavia

2017

Change

2017

Change

Passengers (thousands)

4,960

+3.7%

11,772

+12.8%

Capacity (ASK m)

9,532

+3.9%

22,497

+11.8%

Traffic (RPK m)

8,849

+5.7%

20,402

+13.2%

Load factor 

92.8%

+1.6 pt

90.7%

+1.1 pt

Total passenger revenues (€m)

555

+13.3%

1,160

+19.2%

Scheduled passenger revenues (€m)

555

+13.3%

1,151

+19.3%

Unit revenue per ASK (€ cts)

5.83

+9.3%

5.12

+6.7%

Unit revenue per RPK (€ cts)

6.28

+7.4%

5.64

+5.4%

Unit cost per ASK (€ cts)

4.12

-4.8%

4.58

-2.7%

Operating result (€m)

164

+72m

121

+104m

 

Continuing traffic growth (+5.5%) and strong unit revenue rise (+9.3%) resulted in a significant increase in Transavia's revenue (+13.3%). In combination with a decrease in unit costs by 4.8%, this performance led to a strong Q3 operating profit of 164 million euros.

 

Maintenance: Order book in line with target

 

 

Third Quarter

Nine months

Maintenance

2017

Change

Change
constant currency

2017

Change

Change
constant currency

Total revenues (€m)

1,050

+0.4%

 

3,091

+1.3%

 

Third party revenues (€m)

462

-4.1%

-1.5%

1,362

+1.0%

+0.6%

Operating result  (€m)

75

-2m

0m

164

-8m

-12m

Operating margin (%)

7.1%

-0.2 pt

-0.1 pt

5.3%

-0.3 pt

-0.4 pt

 

Over the period, the Maintenance order book has further increased to a record high of 10.4 billion dollars end September 2017, exceeding the 2017 target. Margins remained at a solid level taking into account OEM supply chain pressure in engine business and change in product and business mix from mature to new contracts

 

Group Review

 

Group operating result driven by solid traffic and unit revenue performance

 

 

Third Quarter

Nine months

 

2017

Change

Change
constant currency

2017

Change

Change
constant currency

Capacity (EASK m)

95,844

+1.9%

 

265,744

+3.1%

 

Revenues (€m)

7,235

+4.3%

+5.1%

19,549

+4.2%

+4.1%

EBITDAR (€m)

1,753

+23.5%

+26.0%

3,497

+18.9%

+23.8%

EBITDA (€m)

1,488

+29.5%

+32.0%

2,670

+24.6%

+32.2%

Operating result (€m)

1,022

+38.7%

+42.9%

1,375

+44.0%

+65.8%

Operating margin (%)

14.1%

+3.5 pt

+3.7 pt

7.0%

+1.9 pt

+2.6 pt

Lease adjusted operating result ((€m)

1,110

+34.3%

+37.5%

1,651

+35.2%

+51.0%

Lease adjusted operating margin (%)

15.3%

+3.4 pt

+3.6 pt

8.4%

+1.9 pt

+2.6 pt

Net result, group share (€m)

552

+8

 

703

+273

 

 

The Q3 operating result is 1,022 million euros which is an improvement by 285 million euros compared to last year. The main items contributing are the positive trend in Group's unit revenues resulting in an increase of 266 million euros, whereas the decrease in fuel price including hedge results contributed 61 million euros.

 

Adjusted for the interest portion of operating leases, the operating margin stood at 15.3% versus 11.9% at Q3 2016.

 

Unit cost reduction impacted by increase in load factor and profit sharing

 

The reported Q3 unit cost per EASK is down -0.8%.

On a constant currency, fuel price and pension-related expense basis the unit cost was up 0.6%,  impacted by higher flight variable costs related to the increasing load factor and by profit sharing. Excluding these effects, the unit cost at constant currency, fuel price and pension expense is down -1.6% in Q3.

 

Improved employee productivity

 

Productivity, measured in EASK per FTE, increased by 2.7% while capacity increased by 1.9%. The average number of staff decreased by 700 FTEs including an increase in Pilots by 100 FTEs and in Cabin crew by 600 FTEs. Ground staff FTEs reduced 1400 FTEs. Net employee costs were stable before profit sharing which increased by 99 million euros.

 

Third Quarter 2017 fuel bill down compared to last  year

 

The Third Quarter 2017 fuel bill amounted to 1,148 million euros, down -96 million euros compared to previous year.

 

 

Further strengthening the financial structure

 

Net debt reduction supported by an improvement in EBITDA and working capital

 

 

Third Quarter

Nine months

In € million

2017

Change

2017

Change

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

1,355

+294

2,414

+544

Cash out related to Voluntary Departure Plans

-27

+8

-100

+108

Change in Working Capital Requirement (WCR)

-653

+95

173

+128

Net cash flow from operating activities

675

+397

2,487

+780

Net investments before sale & lease-back*

-550

-149

-1,694

-237

Operating free cash flow

125

+248

793

+543

* Net investments before sale & lease-back is defined as the 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

 

Year to date, operating free cash flow is positive at 793 million euros up 543 million euros compared to last year.

The net debt at 30 September 2017 stood at 2,796 million euros, a reduction of 859 million euros compared to 31 December 2016, driven by the improvement in both EBITDA and working capital. The adjusted net debt decreased by 656 million euros to 10,510 million euros. The ratio adjusted net debt / EBITDAR, twelve months trailing, has decreased to 2.4x, achieving the target to be below 2.5x.

 

De-risking KLM pilot and cabin pension plans

 

Following a change in Dutch pension regulation and in order to mitigate its risks, KLM has conducted negotiations with its cockpit and cabin crew to adjust their pension schemes.

 

An agreement has been reached between KLM and the Dutch Airline Pilot VNV to modify the pilot pension scheme, subject to the approval of the VNV members. The future scheme is expected to be qualified as a collective defined contribution scheme, and according to IAS 19, the de-risking of the pilot pension fund will lead in Q4 to the derecognition of the "Pension asset" of the Group's balance sheet  through non-current expense in the P&L.

 

Another agreement with Cabin crew has been reached in August 17 on a collective defined contribution scheme. The impact on the Group equity and related P&L non-current (and non-cash) expense amounts 311 million euros (net of tax EUR 233 million euros) in Q3 2017

 

Continued reduction in leverage

 

The reserved capital increase allowing Delta and China Eastern to acquire 10% of Air France-KLM has been completed per October 2017 for an amount of 751 million euros.

The exercise by Air France-KLM of the soft call of the OCEANE 2023 will lead to a further debt reduction  up to 520 million euros per 15 November 2017.

With these operations, Air France-KLM will continue the deleveraging of the Group.

 

 

Contribution by airline to Third Quarter 2017 results

 

 

Third Quarter

Nine months

 

2017

Change

2017

Change

Air France Group

484

+173

545

+219

Operating margin (%)

11.0%

+3.6 pt

4.5%

+1.7 pt

KLM Group

540

+118

840

+211

Operating margin (%)

18.5%

+3.5 pt

10.7%

+2.3 pt

 

 

Strategic initiatives in Passenger Business: Developing a new distribution strategy and a revamped loyalty program

 

In order to best serve customers, Air France KLM is embracing NDC (New Distribution Capability, an enriched IATA messaging standard allowing the distribution of rich content and personalized offers), and investing in options for travel partners to access, book and sell it.

At the same time, in order to adapt to market circumstances and to further improve its efficiency, Air France KLM will implement a Distribution Surcharge on GDS sales, effective from April 1st 2018. The surcharge does not apply to travel agency sales via an NDC connection and to Air France and KLM direct sales channels.

 

A complete re-engineering of the Group's loyalty program Flying Blue will be announced on 6th November and will be launched on 1st April 2018, with the purpose to enrich the travel experience, stimulate the loyalty towards our airlines and maximize the attractiveness.   

 

 

 


 

Outlook

 

The global context remains highly uncertain regarding the geopolitical environment in which we operate and regarding fuel prices.

 

In a context of dynamic demand, the capacity growth in Q4 2017 will be 3 to 4% for Passenger network and 6 to 7% for Transavia.

For the passenger network, the long haul forward bookings for the coming four months stand above last year's levels and, based on the current outlook, the variation in unit revenue is expected to be positive in Q4 2017 compared to the previous year.

 

The fuel bill in euros is expected to be stable in Q4 2017 compared to 2016. In 2018, it is expected to be stable in euros and up 300 million dollars compared to 2017[1].

 

The Group is pursuing its initiatives to reduce unit costs. For full year 2017, unit cost evolution at constant currency, fuel and pension charges is expected slightly negative, and between -1.0 to -1.5% excluding load factor and profit sharing effects.

 

The Group is continuing to improve its financial structure. The operating free cash flow 2017 is expected  above last year, with a capex at 2.2 billion euros. With the reserved capital increase and the conversion of the OCEANE, the adjusted net debt to EBITDAR is expected between 2.2x and 2.3x at the end of the year (before the acquisition in 2018 of a 31% stake in Virgin Atlantic).

 

In 2018, the early implementation of IFRS 16 is expected, in a first assessment, to result in a consequential reduction of net debt of at least 1.5 billion euros compared to adjusted net debt (based on 31st December 2016 figures).

 

These initiatives show that Air France-KLM is resolutely committed to implementing Trust Together strategic priorities, by regaining the offensive and improving competitiveness.

 

*****

The Third Quarter 2017 accounts are not audited by the Statutory Auditors.

 

The results presentation is available at www.airfranceklm.com on 3rd of November 2017 from 7:15 am CET.

 

A conference call will be hosted by Mr Gagey (CFO) on 3rd of November 2017 at 8:30am CET.

To connect to the conference call, please dial:

  • France: +33 (0)1 76 77 25 06
  • Netherlands: +31 (0) 20 703 8261
  • UK: +44 (0)330 336 9411
  • US: +1 719 325 4787

Confirmation code: 7819012

 

To listen to the audio-replay of the conference call, please dial:

  • France: +33 (0) 1 70 48 00 94
  • Netherlands: +31 (0) 20 721 8903
  • UK: +44 (0) 207 984 7568
  • US: +1 719-457-0820

Confirmation code: 7819012

 

 

 

Investor Relations                                                                                          Press

Marie-Agn├Ęs de Peslouan                   Wouter van Beek                                                       

+33 1 49 89 52 59                                 +33 1 49 89 52 60                                 +33 1 41 56 56 00

madepeslouan@airfranceklm.com        Wouter-van.Beek@airfranceklm.com

                       

Income Statement

 

Third Quarter

Nine months

In millions euros

2017

2016

Change

2017

2016

Change

Sales

7,234

6,938

+4.3%

19,548

18,758

+4.2%

Other revenues

1

1

+0.0%

1

1

+0.0%

Revenues

7,235

6,938

+4.3%

19,549

18,758

+4.2%

Aircraft fuel

-1,148

-1,244

-7.7%

-3,428

-3,507

-2.3%

Chartering costs

-104

-109

-4.6%

-306

-324

-5.6%

Landing fees and en route charges

-513

-523

-1.9%

-1,445

-1,437

+0.6%

Catering

-214

-121

+76.9%

-602

-336

+79.2%

Handling charges and other operating costs

-457

-446

+2.5%

-1,313

-1,196

+9.8%

Aircraft maintenance costs

-602

-601

+0.2%

-1,842

-1,847

-0.3%

Commercial and distribution costs

-233

-227

+2.6%

-701

-690

+1.6%

Other external expenses

-380

-507

-25.0%

-1,162

-1,460

-20.4%

Salaries and related costs

-1,928

-1,837

+5.0%

-5,655

-5,543

+2.0%

Taxes other than income taxes

-39

-37

+5.4%

-122

-125

-2.4%

Other income and expenses

135

132

+2.3%

523

647

-19.2%

EBITDAR

1,753

1,419

+23.5%

3,497

2,941

+18.9%

Aircraft operating lease costs

-265

-270

-1.9%

-827

-798

+3.6%

EBITDA

1,488

1,149

+29.5%

2,670

2,143

+24.6%

Amortization, depreciation and provisions

-466

-412

+13.1%

-1,295

-1,188

+9.0%

Income from current operations

1,022

737

+38.7%

1,375

955

+44.0%

Sales of aircraft equipment

0

8

-100.0%

19

16

+18.8%

Other non-current income and expenses

-315

0

N/A

-326

-107

+204.7%

Income from operating activities

707

745

-5.1%

1,068

864

+23.6%

Cost of financial debt

-65

-75

-13.3%

-198

-237

-16.5%

Income from cash and cash equivalent

7

11

-36.4%

27

39

-30.8%

Net cost of financial debt

-58

-64

-9.4%

-171

-198

-13.6%

Other financial income and expenses

81

-34

nm

82

-78

nm

Income before tax

730

647

+12.8%

979

588

+66.5%

Income taxes

-186

-113

+64.6%

-282

-166

+69.9%

Net income of consolidated companies

544

534

+1.9%

697

422

+65.2%

Share of profits (losses) of associates

9

2

+350.0%

16

3

+433.3%

Income from continuing operations

553

536

+3.2%

713

425

+67.8%

Net income from discontinued operations

0

12

-100.0%

-8

14

nm

Net income for the period

553

548

+0.9%

705

439

+60.6%

Minority interest

-1

-4

-75.0%

-2

-9

-77.8%

Net income for the period - Group

552

544

+1.5%

703

430

+63.5%


 

Consolidated Balance Sheet

 

Assets

30 Sep 2017

31 Dec 2016

In million euros

Goodwill

216

218

Intangible assets

1,113

1,066

Flight equipment

9,813

9,119

Other property, plant and equipment

1,453

1,480

Investments in equity associates

303

292

Pension assets

2,487

1,462

Other financial assets

1,122

1,064

Deferred tax assets

143

176

Other non-current assets

187

448

Total non-current assets

16,837

15,325

Assets held for sale

0

0

Other short-term financial assets

444

130

Inventories

583

566

Trade receivables

2,293

1,868

Other current assets

1,136

1,105

Cash and cash equivalents

4,102

3,938

Total current assets

8,558

7,607

Total assets

25,395

22,932

 

 

Liabilities and equity

30 Sep 2017

31 Dec 2016

In million euros

Issued capital

300

300

Additional paid-in capital

2,971

2,971

Treasury shares

-67

-67

Perpetual

600

600

Reserves and retained earnings

-883

-2,520

Equity attributable to equity holders of Air France-KLM

2,921

1,284

Non-controlling interests

16

12

Total Equity

2,937

1,296

Pension provisions

2,117

2,119

Other provisions

1,625

1,673

Long-term debt

6,593

7,431

Deferred tax liabilities

451

-12

Other non-current liabilities

338

284

Total non-current liabilities

11,124

11,495

Provisions

561

654

Current portion of long-term debt

1,412

1,021

Trade payables

2,367

2,359

Deferred revenue on ticket sales

3,062

2,517

Frequent flyer programs

819

810

Other current liabilities

3,103

2,775

Bank overdrafts

10

5

Total current liabilities

11,334

10,141

Total equity and liabilities

25,395

22,932

Consolidated Statement of Cash Flows from 1st January till 30th September

In € millions

30 Sep 2017

30 Sep 2016

Net income from continuing operations

713

425

Net income from discontinued operations

-8

14

Amortization, depreciation and operating provisions

1,295

1,194

Financial provisions

37

-7

Loss (gain) on disposals of tangible and intangible assets

-17

-69

Loss (gain)on disposals of subsidiaries and associates

-1

-10

Derivatives - non monetary result

34

-131

Unrealized foreign exchange gains and losses, net

-168

121

Impairment

0

2

Other non-monetary items

221

12

Share of (profits) losses of associates

-16

-1

Deferred taxes

224

141

Financial Capacity

2,314

1,691

Of which discontinued operations

0

29

(Increase) / decrease in inventories

-15

-108

(Increase) / decrease in trade receivables

-487

-198

Increase / (decrease) in trade payables

62

54

Change in other receivables and payables

613

297

Change in working capital requirements

173

45

Change in working capital from discontinued operations

0

-10

Net cash flow from operating activities

2,487

1,726

Purchase of property, plant and equipment and intangible assets

-1,769

-1,595

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

75

138

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

3

4

Acquisition of subsidiaries, of shares in non-controlled entities

-7

-7

Dividends received

2

4

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

-276

798

Net cash flow used in investing activities of discontinued operations

0

-11

Net cash flow used in investing activities

-1,972

-669

Sale of minority interest without change in control

0

0

Issuance of debt

560

686

Repayment on debt

-283

-792

Payment of debt resulting from finance lease liabilities

-533

-387

Decrease (increase ) in loans, net

-74

-51

Dividends and coupons on perpetual paid

0

-1

Net cash flow used in financing activities of discontinued operations

0

-10

Net cash flow from financing activities

-330

-555

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

-26

-16

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

0

-1

Change in cash and cash equivalents and bank overdrafts

159

485

Cash and cash equivalents and bank overdrafts at beginning of period

3,933

3,073

Cash and cash equivalents and bank overdrafts at end of period

4,092

3,561

Change in treasury of discontinued operations

0

-3

Key Performance Indicators

 

EBITDA and EBITDAR

Third Quarter

Nine months

In millions euros

2017

2016

2017

2016

Income/(loss) from current operations

1,022

737

1,375

955

Amortization, depreciation and provisions

466

412

1,295

1,188

EBITDA

1,488

1,149

2,670

2,143

Aircraft operating lease costs

265

270

827

798

EBITDAR

1,753

1,419

3,497

2,941

 

Restated net result, group share

Third Quarter

Nine months

In million euros

2017

2016

2017

2016

Net income/(loss), Group share

552

544

703

430

Net income/(loss) from discontinued operations

0

-12

8

-14

Unrealized foreign exchange gains and losses, net

-68

-1

-168

121

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

-42

-2

-14

-131

Non-current income and expenses

315

-8

307

91

Depreciation of shares available for sale

0

0

0

0

De-recognition of deferred tax assets

-74

0

-74

0

Restated net income/(loss), group share

683

521

762

497

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

2.27

1.74

2.49

1.62

 

Return on capital employed (ROCE)

In million euros

30 Sep 2017

30 Sep 2016

30 Sep 2016

30 Sep 2015*

Goodwill and intangible assets

1,329

1,254

1,254

1,273

Flight equipment

9,813

9,214

9,214

8,773

Other property, plant and equipment

1,453

1,485

1,485

1,702

Investments in equity associates

303

78

78

115

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

195

198

198

214

Provisions, excluding pension, cargo litigation and restructuring

-1,639

-1,557

-1,557

-1,577

WCR, excluding market value of derivatives

-5,532

-5,195

-5,195

-5,345

Capital employed before operating leases

5,922

5,477

5,477

5,155

Operating leases x7

7,714

7,441

Average capital employed (A)

13,415

12,761

Adjusted results from current operations

1,844

1,454

- Dividends received

-3

-2

- Share of profits (losses) of associates

7

5

- Tax recognized in the adjusted net result

-439

-191

Adjusted result from current operations after tax (B)

1,409

1,266

ROCE, trailing 12 months (B/A)

10.5%

9.9%

 *  Reclassification of Servair as a discontinued operation


 

Net debt

Balance sheet at

In million euros

30 Sep 2017

31 Dec 2016

Current and non-current financial debt

8,005

8,452

Deposits on aircraft under finance lease

-337

-336

Financial assets pledged (OCEANE swap)

0

0

Currency hedge on financial debt

9

-49

Accrued interest

-69

-89

Gross financial debt (A)

7,608

7,978

Cash and cash equivalents

4,102

3,938

Marketable securities

98

53

Cash pledges

258

50

Deposits (bonds)

367

298

Bank overdrafts

-10

-5

Other

-3

-11

Net cash (B)

4,812

4,323

Net debt (A) - (B)

2,796

3,655

Adjusted net debt and adjusted net debt/EBITDAR ratio

Trailing 12 months

30 Sep 2017

31 Dec 2016

Net debt (in €m)

2,796

3,655

Aircraft operating leases x 7 (in €m)

7,714

7,511

Adjusted net debt (in €m)

10,510

11,166

EBITDAR (in €m)

4,342

3,787

Adjusted net debt/EBITDAR ratio

2.4 x

2.9 x

Operating free cash flow

Third Quarter

Nine months

In million euros

2017

2016

2017

2016

Net cash flow from operating activities, continued operations

675

278

2,487

1,707

Investment in property, plant, equipment and intangible assets

-561

-443

-1,769

-1,595

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

11

42

75

138

Operating free cash flow

125

-123

793

250

Lease adjusted operating result

Third Quarter

Nine months

In million euros

2017

2016

2017

2016

Operating result

1,022

737

1,375

955

Aircraft operating leases x 1/3

88

90

276

266

Lease adjusted operating result

1,110

827

1,651

1,221

Lease adjusted operating margin

15.3%

11.9%

8.4%

6.5%

 


 

Unit cost: net cost per EASK

Third Quarter

Nine months

2017

2016

2017

2016

Revenues (in €m)

7,235

6,938

19,549

18,758

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

-1,022

-737

-1,375

-955

Total operating expense (in €m)

6,213

6,201

18,174

17,803

Passenger network business - other revenues (in €m)

-200

-227

-581

-633

Cargo business - other revenues (in €m)

-38

-40

-113

-119

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

-462

-482

-1,362

-1,348

Transavia - other revenues (in €m)

0

0

-9

-8

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

-12

-9

-31

-31

Net cost  (in €m)

5,501

5,443

16,078

15,664

Capacity produced, reported in EASK*

95,844

94,081

265,744

257,760

Net cost per EASK (in € cents per EASK)

5.74

5.79

6.05

6.08

Gross change

 

-0.8%

 

-0.4%

Currency effect on net costs (in €m)

 

-15

 

153

Change at constant currency

 

-0.5%

 

-1.4%

Fuel price effect (in €m)

 

-61

 

-154

Change on a constant currency and fuel price basis

 

0.6%

 

-0.5%

Change in pension-related expenses (in €m)

 

2

 

-7

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

5.74

5.71

6.05

6.07

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

 

+0.6%

 

-0.4%

* 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) and the Cargo business (in ATK) converted into EASK based on a separate fixed factor for Air France and for KLM..

 

Individual airline results

Air France

Third Quarter

Nine months

2017

Change

2017

Change

Revenue (in €m)

4,417

+5.1%

11,989

+3.5%

EBITDA (in €m)

806

+217

1,395

+274

Operating result (en m€)

484

+173

545

+219

Operating margin (%)

11.0%

+3.6 pt

4.5%

+1.7 pt

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

756

+236

1,271

+236

Operating cash flow (before WCR and restructuring) margin

17.1%

+4.7 pt

10.6%

+1.7 pt

 

KLM

Third Quarter

Nine months

2017

Change

2017

Change

Revenue (in €m)

2,924

+3.5%

7,831

+5.4%

EBITDA (in €m)

681

+128

1,269

+257

Operating result (en m€)

540

+118

840

+211

Operating margin (%)

18.5%

+3.5 pt

10.7%

+2.3 pt

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

645

+141

1,173

+285

Operating cash flow (before WCR and restructuring) margin

22.1%

+4.2 pt

15.0%

+3.0 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 30 September 2017

 

 



[1] Based on the current forward at October 30th 2017 and assuming a €/$ at 1.18 for October-December 2017

 



Air france-KLM Q3 2017 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 Corporate Solutions clients. Source: AIR FRANCE - KLM, 2 rue de Robert-Esnault-Pelterie BP 93290, Paris FR-75007, France
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