16 February 2018
FULL YEAR 2017 RESULTS STRONG
OPERATING RESULT AND
SIGNIFICANT STRENGTHENING OF THE FINANCIAL
STRUCTURE |
FULL YEAR 2017
-
Robust traffic statistics with 99 million
passengers carried, up 5.6% compared to last year
-
Operating income at 1,488 million euros, up
41.8% compared to 2016.
-
Significant balance-sheet de-risking linked to
the de-recognition of two pension plans, with a related non-current
net expense of 1,429 million euros. Including this impact, the net
result group share stands at -274 million euros.
Excluding this non-current
expense, the 2017 net result stands at +1,155 million euros, up 363
million euros compared to last year.
-
Flat unit costs at constant currency, fuel and
pension charges in spite of increased load factor and profit
sharing effects.
-
Significant strengthening in the group's
financial structure with a net debt reduction of 2 billion
euros resulting from strong operating free cash flow and issued
capital.
-
Adjusted net debt / EBITDAR ratio of 2.1x, an
improvement of 0.8 points compared to 31 December 2016.
OUTLOOK FOR FULL
YEAR 2018
-
First quarter 2018 unit revenue growth expected
to be positive at constant currency compared to last year.
-
Unit cost reduction of between -1.0% and -1.5%
at constant currency, fuel and pension charges.
-
Fuel bill increase of 150 million euros, based
on current forward prices and hedge portfolio.
-
Positive operating free cash flow (before
acquisitions and disposals).
The Board of Directors of Air
France-KLM, chaired by Jean-Marc Janaillac, met on 15 February 2018
to approve the accounts for the Full Year 2017.
Jean-Marc Janaillac made the
following comments: "Air France-KLM closed 2017
with strong results boosted by a positive business environment.
Thanks to the commitment of employees and the continuing focus on
the quality of customer service, the group confirmed its leadership
position in Europe in traffic terms while reporting an operating
income increase of 42% and significantly improving its financial
profile. These achievements went hand in hand with major strategic
advances including the strengthening and broadening of our network
of alliances and the successful launch of Joon. As we enter 2018,
in a context of rising oil prices and even more intense
competition, we will pursue the offensive, work on competitiveness
and unit cost reduction, and capitalize on the realizations of 2017
in order to maintain a profitable growth momentum."
Air
France-KLM Group |
Fourth Quarter |
Full year |
2017 |
Change |
2017 |
Change |
Passengers
(thousands) |
23,665 |
+4.7% |
98,721 |
+5.6% |
Unit
revenue per ASK (€ cts) |
6.51 |
+2.3% |
6.69 |
+2.0% |
Operating
result (€m) |
113 |
+20.2% |
1,488 |
+41.8% |
Net result
- group (€m) |
-977 |
na |
-274 |
na |
Operating
free cash flow (€m) |
-97 |
-194 |
696 |
+349 |
Net debt
at end of period (€m) |
|
|
1,657 |
-1,998 |
Business Review
Network: Strong
results improvement for Passenger and Cargo business in
2017
Network |
Fourth Quarter |
Full year |
2017 |
Change |
Change constant
currency |
2017 |
Change |
Change constant
currency |
Capacity
(EASK m) |
79,992 |
+2.6% |
|
323,239 |
+2.4% |
|
Total
revenues (€m) |
5,485 |
+2.6% |
+4.9% |
22,480 |
+3.4% |
+3.8% |
Scheduled
revenues (€m) |
5,260 |
+3.2% |
+5.5% |
21,561 |
+3.9% |
+4.3% |
Unit
revenue per EASK (€ cts) |
6.57 |
+0.5% |
+2.8% |
6.67 |
+1.4% |
+1.9% |
Unit cost
per EASK (€ cts) |
6.45 |
-0.6% |
+1.9% |
6.30 |
-0.3% |
-0.4% |
Operating
result (€m) |
101 |
+55 |
+45 |
1,192 |
+379 |
+479 |
The combined Passenger and Cargo
operating result amounted to 1,192 million euros for full year
2017, an increase of 479 million euros at constant currency. This
improvement was underpinned by capacity growth, increased unit
revenue and stable unit costs.
Passenger:
Solid growth in Passenger traffic and unit
revenue
|
Fourth Quarter |
Full year |
Passenger network |
2017 |
Change |
Change constant
currency |
2017 |
Change |
Change constant
currency |
Passengers
(thousands) |
20,663 |
+4.5% |
|
83,947 |
+4.7% |
|
Capacity
(ASK m) |
70,678 |
+2.6% |
|
286,190 |
+2.6% |
|
Traffic
(RPK m) |
60,692 |
+3.9% |
|
248,475 |
+4.3% |
|
Load
factor |
85.9% |
+1.1 pt |
|
86.8% |
+1.4 pt |
|
Total
passenger revenues (€m) |
4,901 |
+2.1% |
+4.3% |
20,393 |
+3.6% |
+4.0% |
Scheduled
passenger revenues (€m) |
4,719 |
+2.6% |
+4.8% |
19,630 |
+4.1% |
+4.5% |
Unit
revenue per ASK (€ cts) |
6.68 |
+0.0% |
+2.1% |
6.86 |
+1.5% |
+1.8% |
The number of passengers carried
in 2017 grew by 4.3% to 84 million and unit revenue increased by
1.8% at constant currency.
The Passenger business benefitted from a favourable trading
environment with disciplined capacity growth and dynamic demand.
Demand was particularly strong on the North American routes and on
the medium-haul hub network, with traffic increases of respectively
6.1% and 7.4%. In addition, the recovery in demand on Asian and
Latin America routes had a strongly positive impact on unit
revenues, with increases of respectively 6.5% and 8.3% at constant
currency.
The improved product offerings on board, personalization of the
customer experience and numerous targeted commercial initiatives
also contributed to the achievement of unit revenue growth.
In addition, significant progress
was made in a number of strategic areas. Air France-KLM made
important advances on further expanding its unrivaled global
network. The group significantly strengthened its existing
partnerships and setup new joint ventures, with China Eastern, Jet
Airways and Vietnam Airlines, while the foundations are being laid
for the new North Atlantic Joint Venture with Delta and Virgin
Atlantic.
In December 2017, as planned, Air France successfully launched its
new airline Joon.
Cargo: turnaround
confirmation in second half of 2017
|
Fourth Quarter |
Full year |
Cargo business |
2017 |
Change |
Change constant
currency |
2017 |
Change |
Change constant
currency |
Tons
(thousands) |
301 |
+2.7% |
|
1,138 |
+0.7% |
|
Capacity
(ATK m) |
3,607 |
+3.3% |
|
14,352 |
+0.9% |
|
Traffic
(RTK m) |
2,280 |
+3.3% |
|
8,595 |
+1.8% |
|
Load
factor |
63.2% |
-0.0 pt |
|
59.9% |
+0.6 pt |
|
Total
Cargo revenues (€m) |
583 |
+6.8% |
+10.9% |
2,087 |
+0.9% |
+2.0% |
Scheduled
cargo revenues (€m) |
541 |
+8.2% |
+12.3% |
1,931 |
+1.4% |
+2.4% |
Unit
revenue per ATK (€ cts) |
15.01 |
+4.7% |
+8.6% |
13.45 |
+0.5% |
+1.6% |
The Cargo business confirmed its
turnaround in the second half of 2017. Traffic grew by 1.8% in full
year 2017 and successive quarters showed higher year over year
increases in unit revenue, contributing to a full year unit revenue
increase of 1.6% at constant currency.
The improvement in the Cargo business was driven by solid demand
growth to/from Asia as of the beginning of 2017 and from Latin
America in the second half of the year, enabling optimized revenue
management steering.
The Full Freighter activity significantly improved in 2017 compared
to last year, contributing to the overall Cargo performance.
Transavia:
clearly positive operating result in 2017
|
Fourth Quarter |
Full year |
Transavia |
2017 |
Change |
2017 |
Change |
Passengers
(thousands) |
3,002 |
+5.7% |
14,774 |
+11.3% |
Capacity
(ASK m) |
5,959 |
+5.6% |
28,456 |
+10.5% |
Traffic
(RPK m) |
5,391 |
+8.7% |
25,793 |
+12.2% |
Load
factor |
90.5% |
+2.6 pt |
90.6% |
+1.4 pt |
Total
passenger revenues (€m) |
276 |
+12.7% |
1,436 |
+17.9% |
Unit
revenue per ASK (€ cts) |
4.55 |
+6.7% |
5.00 |
+6.8% |
Unit cost
per ASK (€ cts) |
5.22 |
+14.1% |
4.72 |
+0.8% |
Operating
result (€m) |
-40 |
-23 |
81 |
+81 |
Transavia carried 14.8 million
passengers in 2017, an increase of 11.3% compared to last year.
Capacity in France was up 12.1%, while capacity in the Netherlands
was up 9.6%. Transavia maintained its traffic growth of 12.2% and a
strong unit revenue rise of 6.8%, underpinned by improved
commercial positioning and network rationalization.
In full year 2017, the operating
result increased to 81 million euros with a margin of 5.6%, versus
break-even in 2016.
Maintenance: margin remaining at
a solid level and future order book increase ahead of
target
|
Fourth Quarter |
Full year |
Maintenance |
2017 |
Change |
Change constant
currency |
2017 |
Change |
Change constant
currency |
Total
revenues (€m) |
1,086 |
-3.9% |
|
4,177 |
-0.1% |
|
Third
party revenues (€m) |
461 |
-5.1% |
+2.5% |
1,823 |
-0.6% |
+1.1% |
Operating
result (€m) |
51 |
-15 |
-10 |
215 |
-23 |
-23 |
Operating
margin (%) |
4.7% |
-1.1 pt |
-1.0 pt |
5.1% |
-0.5 pt |
-0.6 pt |
The Maintenance business had flat
revenues in 2017 compared to last year, with third-party revenues
increasing by 1.1% at constant currency. The operating margin
expressed as a percentage of total revenues stood at a healthy
5.1%. Its small decrease of 0.6 points at constant currency was
driven firstly by margin pressure in the Components activity due to
a tougher competitive landscape, including competition from OEMs,
and secondly by manufacturer supply chain pressure and procurement
price escalation in the Engine business. On the other hand the
Airframe activity delivered an improved performance compared to
last year.
The Maintenance order book further
increased to a record high of 10.4 billion dollars at end 2017, an
increase of 16.9%, well ahead of the 2017 target of 10% growth.
Both Engine and Component orders contributed to the increase in the
order book. In the fourth quarter of 2017, several large new CFM56
engine deals and various "Next Gen" components contracts were
signed.
Air France-KLM
Group: Improved operating result driven by solid unit revenue
performance
|
Fourth Quarter |
Full year |
|
2017 |
Change |
Change constant
currency |
2017 |
Change |
Change constant
currency |
Capacity
(EASK m) |
85,951 |
+2.8% |
|
351,695 |
+3.0% |
|
Capacity
excl. Cargo (ASK m) |
76,637 |
+2.8% |
|
314,646 |
+3.3% |
|
Revenues
(€m) |
6,235 |
+2.4% |
+5.1% |
25,784 |
+3.8% |
+4.3% |
EBITDAR
(€m) |
855 |
+0.9% |
+5.3% |
4,352 |
+14.9% |
+19.7% |
EBITDA
(€m) |
594 |
+4.0% |
+7.1% |
3,264 |
+20.3% |
+26.8% |
Operating
result (€m) |
113 |
+20.2% |
+13.3% |
1,488 |
+41.8% |
+60.1% |
Operating
margin (%) |
1.8% |
+0.3 pt |
+0.1 pt |
5.8% |
+1.5 pt |
+2.0 pt |
Lease
adjusted operating result ((€m) |
200 |
+7.5% |
+1.1% |
1,851 |
+31.6% |
+43.4% |
Lease
adjusted operating margin (%) |
3.2% |
+0.2 pt |
-0.1 pt |
7.2% |
+1.5 pt |
+2.0 pt |
Net
result, group share (€m) |
-977 |
-1,339 |
|
-274 |
-1,066 |
|
In 2017, the Air France-KLM Group
realized an operating result of 1,488 million euros, up by 439
million euros or +41.8% compared to last year. This increase was
mainly driven by the rise in unit revenues, accounting for 447
million euros. The other elements contributing to the result
compared to last year were: a capacity growth effect of 28 million
euros, a unit cost effect of -20 million euros, a currency effect
of -119 million euros and a fuel price effect of +101 million
euros.
The operating margin was 5.8% in
2017. Adjusted for the interest portion of operating leases, the
operating margin[1] was 7.2%,
an improvement of 1.5 points compared to last year.
The Air France-KLM Group net
result amounted to -274 million euros for full year 2017. The net
result was impacted by a non-current expense linked to the
de-recognition of pension assets in the Group's balance sheet,
resulting from the de-risking of the KLM pilot and cabin pension
plans. Excluding the pension-related non-current expense effect,
the net result was +1,155 million euros, an improvement of 363
million euros compared to last year.
Flat unit cost in
spite of increased profit sharing and load factor
effects
The unit cost was broadly flat at +0.1% in 2017, on a constant
currency, fuel price and pension-related expense basis. The
structural unit cost reductions were impacted by profit sharing and
by higher flight variable costs related to the increasing load
factor. The unit cost reduction stood at -1.0%, excluding the
effects of load factor and profit sharing, at constant currency,
fuel price and pension expense in 2017.
Employees
delivering productivity and sharing the benefits
Productivity, measured in EASK per FTE, increased by 3.5% while
capacity increased by 3.0%. The average number of staff decreased
by 400 FTEs including +100 FTEs in Pilots and +550 FTEs in Cabin
crew relating to the capacity increase. Ground staff were reduced
by 1,050 FTEs. Net employee costs were stable before profit
sharing, the latter increasing by 176 million euros compared to
last year.
2017 fuel bill
down 90 million euros
The 2017 fuel bill amounted to 4,507 million euros, down 90 million
euros compared to last year.
Significant
strengthening in the financial structure
|
Fourth Quarter |
Full year |
In € million |
2017 |
Change |
2017 |
Change |
Cash flow
before change in WCR and Voluntary Departure Plans, continuing
operations (€m) |
355 |
-142 |
2,769 |
+402 |
Cash out
related to Voluntary Departure Plans (€m) |
-41 |
-21 |
-141 |
+87 |
Change in
Working Capital Requirement (WCR) (€m) |
97 |
+75 |
270 |
+203 |
Net cash flow from operating activities (€m) |
411 |
-88 |
2,898 |
+692 |
Net
investments before sale & lease-back* (€m) |
-508 |
-106 |
-2,202 |
-343 |
Operating free cash flow (€m) |
-97 |
-194 |
696 |
+349 |
* '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
Strong operating
free cash flow
Operating free cash flow stood at 696 million euros, significantly
higher than last year's 347 million euros.
Net investments amounted to 2.2 billion euros, an increase of 343
million euros compared to last year.
Net debt
reduction of 2 billion euros from operating free cash flow and
capital increases
|
31 Dec 2017 |
31 Dec 2016 |
Net debt
(in €m) |
1,657 |
3,655 |
Aircraft
operating leases x 7 (in €m) |
7,616 |
7,511 |
Adjusted net debt (in €m) |
9,273 |
11,166 |
EBITDAR (in
€m) |
4,352 |
3,787 |
Adjusted net debt/EBITDAR ratio |
2.1 x |
2.9 x |
At 31 December 2017, net debt had
been further reduced to 1,657 million euros versus 3,655 million
euros at 31 December 2016, an improvement of 1,998 million euros
from operating free cash flow and issued capital. The Group
completed capital increases totalling 751 million euros reserved to
China Eastern Airlines and Delta Air Lines, and redeemed the OCEANE
2023 in new shares in the value of 523 million euros.
2017 was the sixth year of
improvement in the adjusted net debt[2] / EBITDAR
ratio, which decreased from 2.9x at 31 December 2016 to 2.1x at 31
December 2017, well below the mid cycle target of 2.5x by the end
of 2020.
As of 1 January 2018, the Air
France-KLM Group will implement the international accounting
standards IFRS 9, IFRS 15 and IFRS 16.
With IFRS 16, all lease contracts
will be recognized on the balance sheet. The net debt on the
opening balance sheet as of 1 January 2017 will be between 8.8
billion and 9.2 billion euros[3]. This
compares with an adjusted Net Debt2 of 11.2
billion euros as reported on 31 December 2016, which is a reduction
of between 2.0 billion and 2.4 billion euros.
As of 31 December 2017, there will be a net equity impact which is
estimated between -0.3 billion and -0.6 billion euros. From 2018
onwards, the volatility in the foreign exchange result originating
from the revaluation of the USD lease debt will be limited as the
Group intends to use the USD lease debt as a natural hedge for the
USD revenues.
IFRS 9 Financial Instruments is
expected to have a minor impact on operating Income with reduced
volatility in the financial result.
IFRS 15 Revenue recognition is
expected to have a timing effect on the airline revenues that will
be year-over-year neutral in the P&L. In addition, there will
be a timing effect for maintenance revenues as the revenue
recognition on flight-hour-based contracts will be done on an
expense-incurred basis.
Contribution by
airline to the Group's results
|
Fourth Quarter |
Full year |
|
2017 |
Change |
2017 |
Change |
Air France
Group (€m) |
43 |
-3 |
588 |
+216 |
Operating margin (%) |
1.2% |
-0.0 pt |
3.7% |
+1.3 pt |
KLM Group
(€m) |
70 |
+18 |
910 |
+229 |
Operating margin (%) |
2.8% |
+0.6 pt |
8.8% |
+1.9 pt |
Outlook
The global context remains uncertain given the current geopolitical
environment and fuel price trends
In 2018, to capture the market
growth, the Air France-KLM group plans to increase capacity by
between 3% and 4% in available seat kilometres for the Passenger
Network and by between 6 and 7% for Transavia.
The first data for the Passenger
network show a continued positive trend in demand for early 2018:
the current long haul forward bookings for the coming three months
are ahead of last year's levels with a strong March 2018 due to the
Easter shift.
Passenger Network unit revenue is expected to be positive in first
quarter 2018 at constant currency compared to last year.
The Group is pursuing its
initiatives to reduce unit costs with a targeted reduction of
between 1.0% to 1.5% at constant currency, fuel price and pension
charges for 2018. The unit cost reductions will be achieved through
further increases in productivity, higher fleet utilisation and
efficiency, the lower cost base of the new airline Joon and the
focus on operational performance.
The full year 2018 fuel bill is
expected to increase by 150 million euros compared to 2017 to 4.7
billion euros[4], based on
the forward curve of 9 February 2018.
The Group is targeting positive
free cash flow (before acquisitions and disposals) for full year
2018. The investment plan will be managed in the long-term target
range of 2.0 billion to 2.5 billion euros.
*****
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 2018 from 7:15 am CET.
An Analysts' Meeting hosted by Mr
Janaillac (CEO) and Mr Gagey (CFO) will be held on 16th of February
2018 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:
Confirmation code: 9010012
-
France: Tollfree 0805 101 219 / Local +33 (0)1
76 77 22 74
-
Netherlands: Tollfree 0800 023 1436 / Local +31
(0)20 721 9251
-
Germany: Tollfree 0800 589 4609 / Local +49
(0)69 2222 13420
-
Switzerland : Tollfree 0800 200 831 /
Local +41 (0)22 567 5729
-
UK: Tollfree 0800 358 6377 / Local +44
(0)330 336 9105
-
US: Tollfree 866 548 4713 / Local +1 323
794 2093
To listen to the audio-replay of
the conference call, please dial:
Investor
Relations
Press
Marie-Agnès 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
|
Fourth
Quarter |
Full year |
In
millions euros |
2017 |
2016 |
Change |
2017 |
2016 |
Change |
Sales |
6,233 |
6,086 |
+2.4% |
25,781 |
24,844 |
+3.8% |
Other
revenues |
2 |
1 |
+100.0% |
3 |
2 |
+50.0% |
Revenues |
6,235 |
6,087 |
+2.4% |
25,784 |
24,846 |
+3.8% |
Aircraft
fuel |
-1,079 |
-1,090 |
-1.0% |
-4,507 |
-4,597 |
-2.0% |
Chartering
costs |
-97 |
-100 |
-3.0% |
-403 |
-424 |
-5.0% |
Landing
fees and en route charges |
-460 |
-463 |
-0.6% |
-1,905 |
-1,900 |
+0.3% |
Catering |
-182 |
-109 |
+67.0% |
-784 |
-445 |
+76.2% |
Handling
charges and other operating costs |
-440 |
-369 |
+19.2% |
-1,753 |
-1,565 |
+12.0% |
Aircraft
maintenance costs |
-582 |
-622 |
-6.4% |
-2,424 |
-2,469 |
-1.8% |
Commercial
and distribution costs |
-234 |
-215 |
+8.8% |
-935 |
-905 |
+3.3% |
Other
external expenses |
-413 |
-498 |
-17.1% |
-1,574 |
-1,958 |
-19.6% |
Salaries
and related costs |
-1,969 |
-1,931 |
+2.0% |
-7,624 |
-7,474 |
+2.0% |
Taxes other
than income taxes |
-36 |
-39 |
-7.7% |
-158 |
-164 |
-3.7% |
Other
income and expenses |
112 |
195 |
-42.6% |
635 |
842 |
-24.6% |
EBITDAR |
855 |
846 |
+1.1% |
4,352 |
3,787 |
+14.9% |
Aircraft
operating lease costs |
-261 |
-276 |
-5.4% |
-1,088 |
-1,073 |
+1.4% |
EBITDA |
594 |
571 |
+4.0% |
3,264 |
2,714 |
+20.3% |
Amortization, depreciation and provisions |
-481 |
-476 |
+1.1% |
-1,776 |
-1,665 |
+6.7% |
Income from current operations |
113 |
94 |
+20.2% |
1,488 |
1,049 |
+41.8% |
Sales of
aircraft equipment |
-1 |
5 |
na |
18 |
21 |
-14.3% |
Other
non-current income and expenses |
-1,599 |
153 |
na |
-1,925 |
46 |
na |
Income from operating activities |
-1,487 |
252 |
na |
-419 |
1,116 |
na |
Cost of
financial debt |
-51 |
-72 |
-29.2% |
-249 |
-309 |
-19.4% |
Income from
cash and cash equivalent |
8 |
10 |
-20.0% |
35 |
49 |
-28.6% |
Net cost of financial debt |
-43 |
-62 |
-30.6% |
-214 |
-260 |
-17.7% |
Other
financial income and expenses |
34 |
45 |
-24.4% |
116 |
-33 |
na |
Income before tax |
-1,496 |
235 |
na |
-517 |
823 |
na |
Income
taxes |
511 |
-128 |
na |
229 |
-294 |
na |
Net income of consolidated companies |
-985 |
107 |
na |
-288 |
529 |
na |
Share of
profits (losses) of associates |
5 |
-10 |
na |
21 |
-7 |
na |
Income from continuing operations |
-980 |
97 |
na |
-267 |
522 |
na |
Net income
from discontinued operations |
0 |
256 |
na |
-8 |
270 |
na |
Net income for the period |
-980 |
353 |
na |
-275 |
792 |
na |
Minority
interest |
3 |
9 |
-66.7% |
1 |
0 |
na |
Net income for the period - Group |
-977 |
362 |
na |
-274 |
792 |
na |
Consolidated
Balance Sheet
Assets |
31 Dec
2017 |
31 Dec 2016 |
In
million euros |
Goodwill |
216 |
218 |
Intangible
assets |
1,122 |
1,066 |
Flight
equipment |
9,921 |
9,119 |
Other
property, plant and equipment |
1,492 |
1,480 |
Investments
in equity associates |
301 |
292 |
Pension
assets |
590 |
1,462 |
Other
financial assets |
1,242 |
1,064 |
Deferred
tax assets |
234 |
176 |
Other
non-current assets |
239 |
448 |
Total non-current assets |
15,357 |
15,325 |
Assets held
for sale |
0 |
0 |
Other
short-term financial assets |
421 |
130 |
Inventories |
557 |
566 |
Trade
receivables |
2,136 |
1,868 |
Other
current assets |
1,264 |
1,105 |
Cash and
cash equivalents |
4,673 |
3,938 |
Total current assets |
9,051 |
7,607 |
Total assets |
24,408 |
22,932 |
Liabilities and equity |
31 Dec 2017 |
31 Dec 2016 |
In
million euros |
Issued
capital |
429 |
300 |
Additional
paid-in capital |
4,139 |
2,971 |
Treasury
shares |
-67 |
-67 |
Perpetual |
600 |
600 |
Reserves
and retained earnings |
-2,099 |
-2,520 |
Equity attributable to equity holders of Air
France-KLM |
3,002 |
1,284 |
Non-controlling interests |
13 |
12 |
Total Equity |
3,015 |
1,296 |
Pension
provisions |
2,202 |
2,119 |
Other
provisions |
1,710 |
1,673 |
Long-term
debt |
6,064 |
7,431 |
Deferred
tax liabilities |
11 |
-12 |
Other
non-current liabilities |
361 |
284 |
Total non-current liabilities |
10,348 |
11,495 |
Provisions |
488 |
654 |
Current
portion of long-term debt |
1,378 |
1,021 |
Trade
payables |
2,365 |
2,359 |
Deferred
revenue on ticket sales |
2,889 |
2,517 |
Frequent
flyer programs |
819 |
810 |
Other
current liabilities |
3,100 |
2,775 |
Bank
overdrafts |
6 |
5 |
Total current liabilities |
11,045 |
10,141 |
Total equity and liabilities |
24,408 |
22,932 |
Consolidated
Statement of Cash Flows from 1st January till
31st December
2017
In €
millions |
31 Dec
2017 |
31 Dec 2016 |
Net income
from continuing operations |
-267 |
522 |
Net income
from discontinued operations |
-8 |
270 |
Amortization, depreciation and operating provisions |
1,776 |
1,665 |
Financial
provisions |
54 |
5 |
Loss (gain)
on disposals of tangible and intangible assets |
-34 |
-86 |
Loss
(gain)on disposals of subsidiaries and associates |
-31 |
-312 |
Derivatives
- non monetary result |
26 |
-179 |
Unrealized
foreign exchange gains and losses, net |
-200 |
89 |
Impairment |
0 |
2 |
Other
non-monetary items |
1,594 |
-64 |
Share of
(profits) losses of associates |
-21 |
6 |
Deferred
taxes |
-261 |
264 |
Financial Capacity |
2,628 |
2,182 |
Of which discontinued operations |
0 |
43 |
(Increase)
/ decrease in inventories |
5 |
-61 |
(Increase)
/ decrease in trade receivables |
-329 |
-104 |
Increase /
(decrease) in trade payables |
68 |
23 |
Change in
other receivables and payables |
526 |
209 |
Change in working capital requirements |
270 |
67 |
Change in working capital from discontinued
operations |
0 |
-10 |
Net cash flow from operating activities |
2,898 |
2,239 |
Purchase of
property, plant and equipment and intangible assets |
-2,312 |
-2,072 |
Proceeds on
disposal of property, plant and equipment and intangible
assets |
110 |
213 |
Proceeds on
disposal of subsidiaries, of shares in non-controlled entities |
8 |
364 |
Acquisition
of subsidiaries, of shares in non-controlled entities |
-9 |
-18 |
Dividends
received |
9 |
7 |
Decrease
(increase) in net investments, more than 3 months |
-262 |
791 |
Net cash flow used in investing activities of discontinued
operations |
0 |
-12 |
Net cash flow used in investing activities |
-2,456 |
-727 |
Increase of
capital |
747 |
0 |
Sale of
minority interest without change in control |
0 |
15 |
Issuance of
debt |
742 |
1,331 |
Repayment
on debt |
-332 |
-1,430 |
Payment of
debt resulting from finance lease liabilities |
-711 |
-481 |
Decrease
(increase ) in loans, net |
-83 |
-86 |
Dividends
and coupons on perpetual paid |
-38 |
-38 |
Net cash flow used in financing activities of discontinued
operations |
0 |
22 |
Net cash flow from financing activities |
325 |
-667 |
Effect of
exchange rate on cash and cash equivalents and bank overdrafts |
-33 |
-13 |
Effect of exch. rate on cash and cash eq. and bank
overdrafts of disc. ops. |
0 |
0 |
Change in cash and cash equivalents and bank
overdrafts |
734 |
832 |
Cash and
cash equivalents and bank overdrafts at beginning of period |
3,933 |
3,101 |
Cash and
cash equivalents and bank overdrafts at end of period |
4,667 |
3,933 |
Change in treasury of discontinued operations |
|
0 |
Key Performance
Indicators
EBITDA and
EBITDAR
|
Fourth
Quarter |
Full year |
In
millions euros |
2017 |
2016 |
2017 |
2016 |
Income/(loss) from current operations |
113 |
94 |
1,488 |
1,049 |
Amortization, depreciation and provisions |
481 |
476 |
1,776 |
1,665 |
EBITDA |
594 |
571 |
3,264 |
2,714 |
Aircraft
operating lease costs |
261 |
276 |
1,088 |
1,073 |
EBITDAR |
855 |
846 |
4,352 |
3,787 |
Restated net
result, group share
|
Fourth
Quarter |
Full year |
In
million euros |
2017 |
2016 |
2017 |
2016 |
Net
income/(loss), Group share |
-977 |
362 |
-274 |
792 |
Net
income/(loss) from discontinued operations |
0 |
-256 |
8 |
-270 |
Unrealized
foreign exchange gains and losses, net |
-32 |
-32 |
-200 |
89 |
Change in
fair value of financial assets and liabilities (derivatives) |
-13 |
-48 |
-27 |
-179 |
Non-current
income and expenses |
1,600 |
-158 |
1,907 |
-67 |
Depreciation of shares available for sale |
0 |
0 |
0 |
0 |
De-recognition of deferred tax assets |
-555 |
44 |
-629 |
44 |
Restated net income/(loss), group share |
23 |
-88 |
785 |
409 |
Coupons on
perpetual |
-6 |
-6 |
-25 |
-25 |
Restated net income/(loss), group share including coupons
on perpetual (used to calculate earnings per share) |
17 |
-94 |
760 |
384 |
Restated
net income/(loss) per share (in €) |
0.05 |
-0.32 |
2.05 |
1.30 |
Return on capital employed
(ROCE)
In
million euros |
31 Dec
2017 |
31 Dec 2016 |
31 Dec 2016 |
31 Dec 2015* |
Goodwill
and intangible assets |
1,338 |
1,284 |
1,284 |
1,265 |
Flight
equipment |
9,921 |
9,119 |
9,119 |
8,743 |
Other
property, plant and equipment |
1,492 |
1,480 |
1,480 |
1,670 |
Investments
in equity associates |
301 |
292 |
292 |
118 |
Financial
assets excluding shares available for sale, marketable securities
and financial deposits |
200 |
224 |
224 |
225 |
Provisions,
excluding pension, cargo litigation and restructuring |
-1,693 |
-1,706 |
-1,706 |
-1,558 |
WCR,
excluding market value of derivatives |
-5,634 |
-5,317 |
-5,317 |
-5,125 |
Capital employed before operating leases |
5,925 |
5,376 |
5,376 |
5,338 |
Operating
leases x7 |
7,616 |
7,511 |
Average capital employed (A) |
13,267 |
12,868 |
Adjusted
results from current operations |
1,858 |
1,414 |
- Dividends
received |
-3 |
-2 |
- Share of
profits (losses) of associates |
20 |
-7 |
- Tax
recognized in the adjusted net result |
-399 |
-250 |
Adjusted result from current operations after tax
(B) |
1,476 |
1,155 |
ROCE, trailing 12 months (B/A) |
11.1% |
9.0% |
* Reclassification of Servair as a discontinued
operation
Net debt
|
Balance
sheet at |
In
million euros |
31 Dec 2017 |
31 Dec 2016 |
Current
and non-current financial debt |
7,442 |
8,452 |
Deposits on
aircraft under finance lease |
-342 |
-336 |
Financial
assets pledged (OCEANE swap) |
0 |
0 |
Currency
hedge on financial debt |
19 |
-49 |
Accrued
interest |
-76 |
-89 |
Gross financial debt (A) |
7,043 |
7,978 |
Cash and
cash equivalents |
4,673 |
3,938 |
Marketable
securities |
73 |
53 |
Cash
pledges |
269 |
50 |
Deposits
(bonds) |
379 |
298 |
Bank
overdrafts |
-6 |
-5 |
Other |
-2 |
-11 |
Net cash (B) |
5,386 |
4,323 |
Net debt (A) - (B) |
1,657 |
3,655 |
Adjusted net debt and adjusted
net debt/EBITDAR ratio
Trailing 12 months |
31 Dec 2017 |
31 Dec 2016 |
Net debt
(in €m) |
1,657 |
3,655 |
Aircraft
operating leases x 7 (in €m) |
7,616 |
7,511 |
Adjusted net debt (in €m) |
9,273 |
11,166 |
EBITDAR (in
€m) |
4,352 |
3,787 |
Adjusted net debt/EBITDAR ratio |
2.1 x |
2.9 x |
Operating free cash flow
|
Fourth
Quarter |
Full year |
In
million euros |
2017 |
2016 |
2017 |
2016 |
Net cash
flow from operating activities, continued operations |
411 |
499 |
2,898 |
2,206 |
Investment
in property, plant, equipment and intangible assets |
-543 |
-477 |
-2,312 |
-2,072 |
Proceeds on
disposal of property, plant, equipment and intangible assets |
35 |
75 |
110 |
213 |
Operating free cash flow |
-97 |
97 |
696 |
347 |
Lease adjusted operating
result
|
Fourth
Quarter |
Full year |
In
million euros |
2017 |
2016 |
2017 |
2016 |
Operating
result |
113 |
94 |
1,488 |
1,049 |
Aircraft
operating leases x 1/3 |
87 |
92 |
363 |
358 |
Lease adjusted operating result |
200 |
186 |
1,851 |
1,407 |
Lease
adjusted operating margin |
3.2% |
3.1% |
7.2% |
5.7% |
Unit cost: net cost per
EASK
|
Fourth
Quarter |
Full year |
|
2017 |
2016 |
2017 |
2016 |
Revenues
(in €m) |
6,235 |
6,087 |
25,784 |
24,846 |
Income/(loss) from current operations (in €m) |
-113 |
-94 |
-1,488 |
-1,049 |
Total
operating expense (in €m) |
6,122 |
5,993 |
24,296 |
23,797 |
Passenger
network business - other revenues (in €m) |
-182 |
-200 |
-763 |
-833 |
Cargo
business - other revenues (in €m) |
-43 |
-46 |
-156 |
-165 |
Third-party
revenues in the maintenance business (in €m) |
-461 |
-486 |
-1,823 |
-1,834 |
Transavia -
other revenues (in €m) |
-5 |
-4 |
-14 |
-12 |
Third-party
revenues of other businesses (in €m) |
-11 |
-10 |
-42 |
-41 |
Net cost (in €m) |
5,420 |
5,247 |
21,498 |
20,912 |
Capacity
produced, reported in EASK* |
85,951 |
83,575 |
351,695 |
341,334 |
Net cost per EASK (in € cents per EASK) |
6.30 |
6.28 |
6.11 |
6.13 |
Gross change |
|
0.4% |
|
-0.2% |
Currency
effect on net costs (in €m) |
|
-119 |
|
33 |
Change at constant currency |
|
2.7% |
|
-0.4% |
Fuel price
effect (in €m) |
|
53 |
|
-101 |
Change on a constant currency and fuel price basis |
|
1.7% |
|
0.1% |
Change in
pension-related expenses (in €m) |
|
5 |
|
-2 |
Net cost per EASK on a constant currency, fuel price and
pension-related expenses basis (in € cents per EASK) |
6.30 |
6.19 |
6.11 |
6.10 |
Change on a constant currency, fuel price
and pension-related expenses basis |
|
+1.7% |
|
+0.1% |
* 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
|
Fourth
Quarter |
Full year |
|
2017 |
Change |
2017 |
Change |
Revenue
(in €m) |
3,839 |
+0.1% |
15,828 |
+2.7% |
EBITDA (in
€m) |
366 |
-27 |
1,761 |
+247 |
Operating
result (en m€) |
43 |
-3 |
588 |
+216 |
Operating margin (%) |
1.1% |
-0.1 pt |
3.7% |
+1.3 pt |
Operating
cash flow before WCR and restructuring cash out (in €m) |
264 |
-142 |
1,535 |
+94 |
Operating cash flow (before WCR and restructuring)
margin |
6.9% |
-3.7 pt |
9.7% |
+0.3 pt |
KLM
|
Fourth
Quarter |
Full year |
|
2017 |
Change |
2017 |
Change |
Revenue
(in €m) |
2,509 |
+5.9% |
10,340 |
+5.5% |
EBITDA (in
€m) |
227 |
+50 |
1,496 |
+307 |
Operating
result (en m€) |
70 |
+18 |
910 |
+229 |
Operating margin (%) |
2.8% |
+0.6 pt |
8.8% |
+1.9 pt |
Operating
cash flow before WCR and restructuring cash out (in €m) |
78 |
-88 |
1,251 |
+197 |
Operating cash flow (before WCR and restructuring)
margin |
3.1% |
-3.9 pt |
12.1% |
+1.3 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
31st of December
2017
Aircraft type |
AF
(incl. HOP) |
KL
(incl. KLC & MP) |
Transavia |
Owned |
Finance lease |
Operating lease |
Total |
In operation |
Change / 31/12/16 |
B747-400 |
|
14 |
|
14 |
|
|
14 |
13 |
-4 |
B777-300 |
43 |
14 |
|
10 |
25 |
22 |
57 |
57 |
2 |
B777-200 |
25 |
15 |
|
19 |
10 |
11 |
40 |
40 |
|
B787-9 |
5 |
10 |
|
1 |
2 |
12 |
15 |
15 |
7 |
A380-800 |
10 |
|
|
1 |
4 |
5 |
10 |
10 |
|
A340-300 |
9 |
|
|
9 |
|
|
9 |
7 |
-3 |
A330-300 |
|
5 |
|
|
|
5 |
5 |
5 |
|
A330-200 |
15 |
8 |
|
10 |
1 |
12 |
23 |
23 |
|
Total Long-Haul |
107 |
66 |
0 |
64 |
42 |
67 |
173 |
170 |
2 |
B737-900 |
|
5 |
|
1 |
1 |
3 |
5 |
5 |
|
B737-800 |
|
27 |
60 |
20 |
9 |
58 |
87 |
87 |
7 |
B737-700 |
|
18 |
8 |
3 |
8 |
15 |
26 |
26 |
|
A321 |
20 |
|
|
11 |
|
9 |
20 |
20 |
|
A320 |
42 |
|
|
3 |
4 |
35 |
42 |
42 |
1 |
A319 |
38 |
|
|
20 |
5 |
13 |
38 |
38 |
|
A318 |
18 |
|
|
12 |
6 |
|
18 |
18 |
|
Total Medium-Haul |
118 |
50 |
68 |
70 |
33 |
133 |
236 |
236 |
8 |
ATR72-600 |
|
|
|
|
|
6 |
6 |
6 |
1 |
ATR72-500 |
3 |
|
|
1 |
1 |
1 |
3 |
3 |
-2 |
ATR42-500 |
11 |
|
|
6 |
1 |
4 |
11 |
11 |
-1 |
Canadair
Jet 1000 |
14 |
|
|
14 |
|
|
14 |
14 |
|
Canadair
Jet 700 |
11 |
|
|
11 |
|
|
11 |
11 |
|
Embraer
190 |
10 |
30 |
|
6 |
13 |
21 |
40 |
40 |
|
Embraer
175 |
|
12 |
|
1 |
11 |
|
12 |
12 |
8 |
Embraer
170 |
15 |
|
|
8 |
2 |
5 |
15 |
15 |
|
Embraer
145 |
18 |
|
|
14 |
4 |
|
18 |
13 |
-2 |
Fokker
70 |
|
|
|
|
|
|
|
|
-11 |
Total Regional |
88 |
42 |
0 |
61 |
32 |
37 |
130 |
125 |
-7 |
B747-400ERF |
|
3 |
|
3 |
|
|
3 |
3 |
|
B747-400BCF |
|
1 |
|
1 |
|
|
1 |
1 |
|
B777-F |
2 |
|
|
2 |
|
|
2 |
2 |
|
Total Cargo |
2 |
4 |
0 |
6 |
0 |
0 |
6 |
6 |
0 |
|
|
|
|
|
|
|
|
|
|
Total |
315 |
162 |
68 |
201 |
107 |
237 |
545 |
537 |
3 |
[1] Operating
result adjusted for the interest portion (1/3) of the operating
leases
[2] Adjusted
Net Debt= Net Debt + 7x Yearly Operating lease costs
[3] Including
between 5.1 and 5.5 billion euros lease related portion of debt
[4] Based on
the forward curves of 9 February 2018, 2018 average Brent price of
USD 62, average jet fuel price of USD 604 per ton. Assuming
exchange rate of EUR/USD of 1.22 in 2018
AIR FRANCE-KLM: FULL YEAR 2017
RESULTS
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: AIR FRANCE - KLM via Globenewswire
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