AIR FRANCE - KLM : First quarter 2013 results

 | Quelle: AIR FRANCE - KLM AIR FRANCE - KLM

May 3rd 2013

FINANCIAL YEAR 2013  

FIRST QUARTER JANUARY-MARCH 2013

  • Stable capacity 

  • Ongoing cost reduction 

  • Reduction in operating loss  

  • Lower net debt 

FULL YEAR OUTLOOK

  • Objectives for Full Year 2013 confirmed: reduction in unit costs at constant currency and fuel price, reduction in net debt  

The Board of Directors of Air France-KLM, chaired by Jean-Cyril Spinetta, met on May 2nd 2013 to examine the accounts for the first quarter of 2013.  

In a persistently tough economic environment, the group pursued its cost and debt reduction measures in this traditionally difficult quarter.

Key data

In millions of euros,
(except per share data in euros)		Quarter to 31st March
20132012
proforma* 		Change2012
published
Revenues5,721 5,6451.3%5,645
EBITDAR[1]
12323+€100m37
Operating result-530-611nm-597

Adjusted operating result2

-451-535nm-521

Net result, group share

-630-379nm-368
Net result per share-2.13-1.28 nm-1.25
Net diluted result per share-2.13-1.28nm-1.25

* Restated for Revised IAS 19 relating to pensions, applicable since 1st January 2013 and backdated to 1st January 2012

Activity
The passenger activity recorded a 0.8% rise in traffic for virtually stable capacity (+0.2%). The load factor gained 0.5 points to 82.1%. Unit revenue per available seat kilometre (RASK) rose by 1.2% (+1.3% ex-currency). Passenger revenues were up 1.4% to 4.49 billion euros. The operating result stood at -447 million euros (-515 million euros a year earlier).

The cargo activity, which continued to be affected by the economic slowdown and the situation of overcapacity in the industry, reduced capacity by 4.1%. With traffic down 6.9%, the load factor declined by 1.9 points to 63.0%. Unit revenue per available tonne kilometre (RATK) fell by 1.9%, and by 1.0% ex-currency. Cargo revenues amounted to 700 million euros (-5.9%). However, thanks to the Transform 2015 measures, the cargo loss was reduced to 50 million euros (70 million euros a year earlier).  

Third party maintenance revenues stood at 302 million euros (+17.1%). The operating result amounted to 20 million euros (15 million euros at 31st March 2012). This improvement was mainly due to component maintenance.  
The other businesses generated revenues of 229 million euros, of which 134 million euros for the leisure business (+14.5%). The operating result stood at -53 million euros (-41 million euros at 31st March 2012).

Total revenues amounted to 5.72 billion euros, up 1.3% after a negative currency effect limited to 0.2%. Unit revenue measured in equivalent available seat kilometre (EASK) rose 0.5% (+0.7% at constant currency).

Reduction in unit costs

Unit costs measured in EASK were down 1.0% and 1.7% on a constant currency and fuel price basis for virtually stable production in EASK (+0.2%).

Operating costs were stable (-0.1%) with the main changes as follows:

  • Despite a rise in the fuel price after hedging of 4%, the fuel bill was slightly down (-14 million euros to 1.67 billion euros) on the back of a 3% decline in volumes.  

  • Employee costs fell 1.7% to 1.89 billion euros mainly reflecting the reduction in headcount (-41 million euros), a 13 million euro rise in non cash pension costs, a consolidation effect linked to the integration of Airlinair of 9 million euros and the French competitiveness tax credit (CICE, -10 million euros). 

  • Maintenance purchases increased by 12.0% to 309 million euros on the back of the increase in third party maintenance. 

The operating result stood at -530 million euros, an improvement of 81 million euros on previous year. The adjusted operating result was -451 million euros (-535 million euros at 31st March 2012).

Net interest charges amounted to 97 million euros (82 million euros at 31st March 2012). 'Other financial income and costs' stood at 51 million euros versus 276 million euros a year earlier. This decrease was mainly due to lower foreign exchange gains (down 50 million euros) and the change in the fair value of hedging instruments, which stood at 43 million euros at 31st March 2013 versus 220 million euros at 31st March 2012, reflecting the  decline in the oil price at the end of the period.

The net result, group share, stood at -630 million euros (-379 million euros at 31st March 2012). Earnings and diluted earnings per share stood at -2.13 euros (-1.28 euros at 31st March 2012).

Reduction in net debt

Investments amounted to 282 million euros with disposals at 108 million euros (416 million euros and 25 million euros respectively at 31st March 2012). Operating free cash-flow stood at 38 million euros in a traditionally negative quarter. At 31st March 2013, Air France-KLM had cash of 4.3 billion euros of which 547 million euros generated by the convertible bond issue. Elsewhere, the group has credit lines of 1.85 billion euros.

As already indicated, the application of revised norm IAS19 on pension, and in particular the suppression of the corridor at 1st January 2013, led to a negative adjustment of shareholders' funds of 1.33 billion euros at 31st December 2012. At 31st March 2013, shareholders' funds reflected a positive trend in the return on plan assets and a revaluation of the discount rate amounting to 347 million euros, as well as various positive adjustments for 200 million euros. As a result, shareholders' funds were stable (3.59 billion euros versus 3.64 billion euros at 31st December 2012). Net debt[3] amounted to 5.90 billion euros (5.97 billion euros at 31st December 2012). The financial cover ratios were stable or slightly improved over the 12 months at 31st March 2013.

Outlook

In a difficult and uncertain environment, the group continues the implementation of Transform 2015 which remains on track.  It confirms its objectives for 2013, of a reduction in unit cost on a constant currency and fuel price basis, and a reduction of net debt.
Information by business  

Passenger

Quarter to 31st March  
20132012
proforma*		Change
Traffic (RPK millions) 52,12951,734+0.8%
Capacity  (ASK millions)63,51763,391+0.2%
Load factor  82.1%81.6%+0.5 pts
Total passenger revenues (€m)4,4904,430 +1.4%
Scheduled passenger revenues (€m)4,2614,205+1.3%  
Unit revenue per RPK (€cts)8.178.12+0.6%
Unit revenue per RPK at constant currency (€cts)--+0.7%
Unit revenue per ASK (€cts) 6.716.63+1.2%
Unit revenue per ASK at constant currency (€cts)--+1.3%
Unit cost per ASK  (€cts)7.417.44-0.4%
Unit cost per ASK at constant currency and fuel price (€cts)---1.0%
Operating result (€m)-447-515nm

* Restated for Revised IAS 19 relating to pensions, applicable since 1st January 2013 and backdated to 1st January 2012

Cargo

Quarter to 31st March  
20132012
proforma*		Change
Traffic (RTK millions)2,4162,594-6.9%
Capacity (ATK millions)3,8333,997-4.1%
Load factor63.0%64.9%-1.9 pts
Total cargo business revenues (€m)700744-5.9%
Revenues from the transportation of cargo (€m)656697-5.9%
Unit revenue per RTK (€cts)27.1726.90+1.0%
Unit revenue per RTK ex currency (€cts)--+1.9%
Unit revenue per ATK (€cts)17.1317.46-1.9%
Unit revenue per ATK ex currency (€cts)---1.0%
Unit cost per ATK (€cts)18.4419.21-4.0%
Unit cost per ATK on constant currency and fuel price (€cts)---5.1%
Operating income (€m)-50-70nm

* Restated for Revised IAS 19 relating to pensions, applicable since 1st January 2013 and backdated to 1st January 2012

Maintenance  

In the first quarter of 2013 the maintenance business realised total revenues of 788 million euros (+2.0%) of which 302 million euros with third parties, up 17% in spite of negative currency impact of 1.6%. The operating result stood at 20 million euros (15 million euros a year earlier). The high value-added activities of engines and components remained robust.

Other businesses

The other businesses comprise mainly the leisure activities of Transavia and the catering business of Servair. In the first quarter of 2013, the other businesses generated revenues of 229 million euros, up 7.5% and an operating result of -53 million euros (-41 million euros at 31st March 2012).  

Transavia

Quarter to 31st March  
20132012
proforma*		Change
Traffic (RPK millions) 2,6002,172+19.7%
Capacity  (ASK millions)3,0342,601+16.7%
Load factor  85.7%83.5%+2.2 pts
Total passenger revenues (€m)134117 +15.0%
Scheduled passenger revenues (€m)124106+17.0%  
Unit revenue per RPK (€cts)4.774.87-2.2%
Unit revenue per RPK at constant currency (€cts)---2.2%
Unit revenue per ASK (€cts) 4.084.07+0.4%
Unit revenue per ASK at constant currency (€cts)--+0.4%
Unit cost per ASK  (€cts)5.765.79-0.5%
Unit cost per ASK at constant currency and fuel price (€cts)---2.6%
Operating result (€m)-51-45nm

 * Restated for Revised IAS 19 relating to pensions, applicable since 1st January 2013 and backdated to 1st January 2012

The catering business generated stable revenues of 219 million euros of which 84 million euros realised with third parties at 31st March 2013. The operating loss stood at one million euros (-6 million euros one year earlier).

Additional information

The accounts for the quarter January to March 2013 are not audited.  

The results presentation is available on www.aifranceklm-finance.com.

Practical information

  • Conference call at 10h00 CET:  

to connect to the conference call, please dial
        - UK 44 (0)20 7162 0125 (password: AKH)
        - US 1 334 323 6203 (password: AKH)

  • To listen to a recording of the conference in English, dial: 

- UK 44 (0)20 7031 4064 (code: 931347)
- US 1 954 334 0342 (code: 931347)

Contacts
Dominique Barbarin        Bertrand Delcaire
SVP Investor Relations   VP Investor Relations
Tel : +33 1 49 89 52 60   Tel : +33 1 49 89 52 59  
Email : dobarbarin@airfranceklm.com        Email : bedelcaire@airfranceklm.com

                            Website: www.airfranceklm-finance.com
                                                                                      
INCOME STATEMENTS (unaudited)  

 
First quarter (January to March)
In euro millions20132012*Variation
SALES5,7215,6451.3%
Other revenues01nm
EXTERNAL EXPENSES(3,880)(3,884)(0.1%)
Aircraft fuel(1,667(1,681(0.8%)
Chartering costs(117)(138)(15.2%)
Aircraft operating lease costs(233)(225)3.6%
Landing fees and en route charges(426)(434)(1.8%)
Catering(137)(138)(0.7%)
Handling charges and other operating costs(348)(321)8.4%)
Aircraft maintenance costs(309)(276)12.0%)
Commercial and distribution costs(223)(221)0.9%
Other external expenses (420)(450)(6.7%)
Salaries and related costs(1,892)(1,925)(1.7%)
Taxes other than income taxes(43)(46)(6.5%)
Amortization and depreciation(387)(390)(0.8%)
Provisions(33)(19)73.7%
Other income and expenses(16)7nm
INCOME FROM CURRENT OPERATIONS(530)(611)13.3%
Sales of aircraft equipment(4)3nm
Sales of subsidiaries(6)98nm
Other non-current income and expenses(17)(6)nm
INCOME FROM OPERATING ACTIVITIES(557)(516)(7.9%)
Income from cash and cash equivalents20195.3%
Cost of financial debt(117)(101)15.8%
Net cost of financial debt(97)(82)(18.3%)
Foreign exchange gains (losses), net454nm
Change in fair value of financial assets and liabilities 43220nm
Other financial income and expenses42nm
INCOME BEFORE TAX(603)(322)(87.3%)
Income taxes28(19)nm
NET INCOME OF CONSOLIDATED COMPANIES(575)(341)(68.6%)
Share of profits (losses) of associates(54)(38)42.1%
INCOME FROM CONTINUING OPERATIONS(629)(379)(66.0%)
Net income from discontinued operations
NET INCOME FOR THE PERIOD(629)(379)(66.0%)
Minority interest(1)nm
NET INCOME FOR THE PERIOD - GROUP(630)(379)(66.2%)

(*) Pro-forma IAS19R. See note 2 in notes to consolidated financial statements
CONSOLIDATED BALANCE SHEET (unaudited)

Assets
In € millions		March  31,
 2013		December 31, 2012
 proforma *		January 1,
 2012
proforma *
Goodwill256252426
Intangible assets867842774
Flight equipment9,81910,04810,689
Other property, plant and equipment1,9261,9322,055
Investments in equity associates322381422
Pension assets2,9612,4772,336
Other financial assets(**)1,7501,6652,015
Deferred tax assets1,3211,3921,322
Other non-current assets171152168
Total non-current assets
19,39319,14120,207
Assets held for sale
7710
Other short term financial assets (**)
910933751
Inventories
535521585
Trade accounts receivables
2,3051,8591,774
Income tax receivables
201110
Other current assets
979828995
Cash and cash equivalents
3,7303,4202,283
Total current assets
8,4867,5796,408
Total assets
27,87926,72026,615

(*) See note 2 in notes to consolidated financial statements

** Including:                                                                      in € millions
March 31, 2013December 31, 2012 January 1,
 2012
Deposits related to financial leases
805
806
656
Marketable securities
915
956
987

Liabilities and equity
In € millions		March  31,
 2013		December 31, 2012
 proforma *		January 1,
 2012
proforma *
Issued capital300300300
Additional paid-in capital2,9712,9712,971
Treasury shares(85)(85)(89)
Reserves and retained earnings3514031,775
Equity attributable to equity holders of Air France-KLM3,5373,5894,957
Non-controlling interests524847
Total equity
3,5893,6375,004
Provisions and retirement benefits
3,1413,1582,692
Long-term debt
9,1399,5659,228
Deferred tax
239149223
Other non-current liabilities
318384321
Total non-current liabilities
12,83713,25612,464
Provisions
585555156
Current portion of long-term debt
2,2571,4341,174
Trade accounts payables
2,4252,2192,599
Deferred revenue on ticket sales
2,8882,1151,885
Frequent flyer programs
759770784
Current tax liabilities
236
Other current liabilities
2,4752,4742,386
Bank overdrafts
62257157
Total current liabilities
11,4539,8279,147
Total liabilities
24,29023,08321,611
Total liabilities and equity
27,87926,72026,615

(*) See note 2 in notes to consolidated financial statements

CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

In € millions
Period from January 1 to March 31,		20132012
proforma
Net income for the period - Equity holders for Air France-KLM(630)(379)
Non-controlling interests1-
Amortization, depreciation and operating provisions420409
Financial provisions(4)(2)
Gain on disposals of tangible and intangible assets8(3)
Loss/ (gain) on disposals of subsidiaries and associates6(98)
Derivatives - non monetary results(47)(229)
Unrealized foreigh exchange gains and losses, net(4)(61)
Share of (profits) losses of associates5438
Deferred taxes(38)13
Other non-monetary items(25)8
Subtotal
(259)(304)
(Increase) / decrease in inventories
(10)33
(Increase) / decrease in trade receivables
(421)(388)
Increase / (decrease) in trade payables
52(131)
Change in other receivables and payables
850732
Net cash flow from operating activities
212(58)
Acquisition of subsidiaries, of shares in non-controlled entities
(9)-
Purchase of property, plant and equipment and intangible assets
(282)(416)
Proceeds on disposal of subsidiaries and investments in associates
9467
Proceeds on disposal of property, plant and equipment and intangible assets
10825
Dividends received
613
Decrease (increase) in investments, net between 3 months and 1 year
41115
Net cash flow used in investing activities
(127)
204
Disposal of subsidiaries without loss of control, of owned shares
-7
Issuance of debt
882325
Repayment on debt
(308)(228)
Payment of debt resulting from finance lease liabilities
(143)(129)
New loans
(33)(8)
Repayment on loans
2528
Net cash flow from financing activities
423
(5)
Effect of exchange rate on cash and cash equivalents and bank overdrafts
(3)(6)
Change in cash and cash equivalents and bank overdrafts
505135
Cash and cash equivalents and bank overdrafts at beginning of period
3,1632,126
Cash and cash equivalents and bank overdrafts at end of period
3,6682,261

(*) See note 2 in notes to consolidated financial statements
AIR FRANCE-KLM FLEET

Group Air France fleet

AircraftAFAirlinair*Brit AirCity JetRégionalVLMTransavia OwnedFinance leaseOperating leaseTotalIn operationChange /
12/31/12
B747-400731377
B777-30037137173737
B777-2002515282525
A380-800813488
A340-300138231311
A330-300
A330-2001532101515
MD11
Long haul105431745105103
B747-400 cargo52353
B777- cargo2222
MD-11-CF
MD-11-F
Freighter74375
B737 900
B737-80010101010+2
B737-700
B737-400
A3212566132525
A32056173365655-1
A31942205174241
A318181171818
Medium haul14110542176151149+1
AVRO RJ 852211112219
ATR72-500713377+7
ATR72-2002222+2
ATR42-500134451313+13
ATR42-3003331+1
Canadair Jet 100013131313
Canadair Jet 900
Canadair Jet 70015691514-1
Canadair Jet 10013121139
Embraer 19010461010
Embraer 170168261616
Embraer 1452112812120-3
Embraer 13564261+1
Fokker 100
Fokker 70
Fokker 50131211313
Regional2541225313873136154138+20
TOTAL25325412253131018869160417395+21

(*) Integrated in the first quarter of 2013

KLM fleet

AircraftKLMKLM CityhopperTransaviaMartinair OwnedFinance leaseOperating leaseTotalIn operationChange /
12/31/12
B747-4002214352222
B777-3007777
B777-20015691515
A380-800
A340-300
A330-3004444+1
A330-20011651111
MD1176176
Long haul662023236665+1
B747-400 cargo433474
B777- cargo
MD-11-CF3333-1
MD-11-F32133+1
Freighter493551310
B737 90052355
B737-8002321510294443-1
B737-700181013152828
B737-400111
A321
A320
A319
A318
Medium haul4731625477876-1
AVRO RJ 85
ATR72-500
ATR72-200
ATR42-500
ATR42-300
Canadair Jet 1000
Canadair Jet 900
Canadair Jet 700
Canadair Jet 100
Embraer 190221392222
Embraer 170
Embraer 145
Embraer 135
Fokker 100111
Fokker 7026262626
Fokker 50
Regional49271394948
KLM11749319566684206199
TOTAL Air France-KLM Group244135244623594+21

[1] Before amortisation, provisions and operating leases
[2]Adjusted for the portion of operating leases corresponding to financial charges (34%)

[3] Definition in 2012 Registration Document page 151. Reconciliation table available in results presentation.

Anhänge

Q1 2013 results
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