AF-KLM Full Year 2022 Results
02/17/2023 - 01:00 AM
February 17, 2023
FULL YEAR 2022 RESULTS
BACK TO POSITIVE NET INCOME AFTER A SUCCESSFUL YEAR IN A CHALLENGING CONTEXT POSITIVE OPERATING RESULT FOR BOTH AIR FRANCE AND KLM THANKS TO SIGNIFICANT I NCREASE IN REVENUES AND TRANSFORMATION EFFORTS
Strong Group capacity ramp up at 85% compared to 2019 with load factor at 84% Group revenues at €26.4b n, with highest fourth quarter revenues in history Operating result at €1.2b n with operating margin at 4.5% above 2019 level (4.2% ), despite surging fuel price Positive net income at €0.7b n supporting the Group’s equity restoration Positive Adjusted operating free cash flow ast €1.9b n and solid cash at hand at €10.6b n Net debt down by €1.9b n euros, compared to end of 2021 Commenting on the results, Mr. Benjamin Smith, Group CEO , said:“ Throughout 2022, Air France-KLM once again demonstrated its resilience and agility in a context of unprecedented crises. In spite of the Omicron strain, the war in Ukraine, the inflationary situation and the operational disruptions at major international airports last summer, our Group and its airlines were able to successfully capture a strong demand for travel. On the financial side, we successfully undertook major operations to both restore our equity and consolidate our balance sheet while continuing to pay back the State aids we received. We secured landmark deals, including a strategic commercial partnership with CMA CGM Group which became our largest private shareholder. All the while, we moved forward with our transformation efforts at every level of our Group to emerge stronger and more efficient from the pandemic as a leader of sustainable aviation. Our fleet renewal efforts and our investments in SAF fully demonstrate our determination to play an active role in the decarbonization, not just of our own operations, but of the industry as a whole . We close out the year with a positive net income, having turned the page on Covid, and look to the future with confidence in our ability to address the challenges ahead. I would like to thank all the customers who chose to fly our airlines this year as well as all our employees, who made this year a success through their hard work and commitment to excellence. ”
Highest Q4 revenue in history and Full Year operating margin at 4.5%
Fourth quarter Full Year 202 2 Change Change constant currency 202 2 Change Change constant currency Revenues (€m) 7,128 +47.3% +42.8% 26,393 +84.4% +79.7% EBITDA (€m) 786 -42 -40 3,615 +2,870 2,891 Operating result (€m) 134 -45 -42 1,193 +2,819 2,839 Operating margin (%) 1.9% -1.8 pt -1.6 pt 4.5% +15.9 pt +15.7 pt Net income – Group part (€m) 496 +622 728 +4,020 Adj. operating free cash flow (€m) -551 -776 1,903 +2,534 Net debt at end of period (€m)1 6,337 -1,879
In Q4 2022, revenues were up 47.3% compared to Q4 2021, a record level in the Group’s history, despite a difficult context. Full Year 2022 revenues were up 84.4% up compared to last. This improvement was driven by an increase in capacity, load factor and passenger yield. The Air France-KLM Group posted a positive operating result of 1,193 million euros, up by 2,839 million euros at a constant currency compared to last year. Full Year 2022 operating margin is 0.3 points higher than 2019 (4.2% ).
Fourth quarter Full Year 202 2 Change Change constant currency 202 2 Change Change constant currency Passengers (thousands) 20,995 +32.2% 83,323 +86.5% Capacity (ASK m) 72,698 +21.3% 282,826 +44.2% Traffic (RPK m) 62,422 +45.7% 237,567 +104.6% Passenger load factor 8 5 . 9 % 14.4pt 8 4 . 0 % 24.8pt Passenger unit revenue per ASK (€ cts) 7.87 +36.5% +32.3% 7.45 +55.9% +51.6% Group unit revenue per ASK (€ cts) 8.88 +22.3% +18.5% 8.52 +33.4% +29.5% Group unit cost per ASK (€ cts) at constant fuel 8.69 +24. 9 % +5.1% 8.10 +12.2% -4.5%
In 2022, Air France-KLM welcomed 83.3 million passengers which is 86.5% above previous year. As capacity increased by 44.2% and traffic grew by 104.6% , the load factor increased by 24.8 points compared to last year. 51.6% against a constant currency compared to last year. This increase was driven by both load factor and yield. 4.5% versus last year thanks to an increase in capacity and the Group’s ongoing transformation efforts.
The full year unit cost is up 1.9% at a constant fuel price and constant currency (USD & related currencies only) versus 2019, with a capacity down by 15% . The ongoing transformation programs enable Air France-KLM to limit the impact of increasing costs such as airport and ATC charges, and the increase of labor cost.
Compared to December 2019, the number of Full Time Equivalents (FTE’s) decreased by 16% at Air France (excluding Transavia France) and by 9% at KLM.10% compared to the same quarter in 2019 mainly thanks to FTE reduction and government support on wages, mainly received in the first quarter.
In 2021 and 2022, Air France-KLM continued redeeming liquidity support while maintaining a solid cash position
In December 2021, Air France-KLM redeemed €500 million of the outstanding 4 billion euros bank loan guaranteed by the French State (the “PGE”). In June 2022, Air France-KLM successfully completed a €2.256 billion rights issue, of which €1.6 billion were allocated to the partial redemption of the €3.0 billion perpetual hybrid instruments held by the French State. End of June 2022, KLM fully redeemed its RCF and Dutch State Loan for a total amount of 0.9 billion euros. In July 2022, Air France-KLM and Apollo closed a €500 million transaction whereby Apollo subscribed to perpetual bonds issued by an Air France ad hoc operating affiliate that owns a pool of spare engines dedicated to the airline’s Engineering and Maintenance. The €500 million proceeds were used to further redeem part of the perpetual hybrid instruments held by the French State. In November 2022, Air France-KLM successfully placed undated deeply subordinated unsecured bonds convertible into new shares and/or exchangeable for existing shares, for a nominal amount of c. €300 million . The net proceeds of this offering were fully allocated to the partial redemption of the perpetual hybrid instruments held by the French State. In November 2022, Air France-KLM continued to deleverage and reprofile its unsecured debt with an agreement with the French state and the syndicate of nine banks participating in the PGE to proceed with the early redemption of an additional €1.0 billion , bringing its outstanding amount to €2.5 billion at end-2022. Altogether, by December 2022, Air France-KLM redeemed €4.9 billion liquidity support, thus rebalancing the Group’s debt profile.
In 2023, Air France-KLM will continue to strengthen its balance sheet …
In the course of March 2023, the Group will fully redeem the “PGE” (2.5 billion euros outstanding) by using the 1.0 billion euros proceeds of the Sustainability-Linked Bonds issued in January 2023 and by using an additional 1.5 billion euros of cash. In April 2023, Air France & Air France-KLM combined and KLM intends to implement two new Sustainability-linked Revolving Credit Facilities. Aside of net profit generation, Air France-KLM intends to restore its balance sheet by means of non dilutive initiatives such as quasi-equity financing instruments2 (similarly to the one raised by Air France on a pool of spare engines in July 2022), supported by Loyalty Program and/or MRO assets, and/or straight hybrid bonds. … a nd will be fully released from current State s support
The remaining €1.2b n French State Recapitalization Aid, granted under EU State Aid Covid Temporary Framework, is currently composed by:
€600m French State perpetual hybrids instruments.€600m shares, acquired by the French State as part of the May 2021 right issue.As of April 19th , 20233 , Air France-KLM intends to fully exit this current €1.2b n French State recapitalization Aid and its related bans. th , 2023, by the EU Commission of a French State Compensation Aid without any bans, the Group will achieve this exit of the French Recapitalization Aid through the following steps:
March 2023: Air France-KLM will redeem and refinance €300m of French State perpetual bonds into French State perpetual hybrid instruments without bans attached, enabling to cross the 75% redemption threshold of the Recapitalization French State Aid. As of April 19th , 2023: The rest of the c.€300m French State perpetual hybrid instruments and the remuneration associated to the State aid will be redeemed and refinanced similarly. The Group will settle all final obligations related to the exit of the remaining Recapitalization Aid without change needed of the capital structure. In April 2023 KLM intends to exit the current Dutch State framework with banks & State loans being replaced by a Sustainability Linked Revolving Credit Facility.
OUTLOOK
Capacity
90% -95% for the First quarter of 202390% -95% for the Second quarter of 2023above 95% for the Second Half of 2023 95% -100% for the Full Year 2023Transavia will contribute to this growth and expects to be at circa 135% for the Full Year 2023.
Other
Unit cost: The Group expects for Full Year 2023 a stable unit cost, against a constant fuel price, constant currency and excluding furlough contribution, compared to FY 2022. Net capex: Full year 2023 Net Capex spending is estimated at 3.0 billion euros. Medium Term Outlook 4
The Group continues its swift transformation initiatives and confirms its medium-term financial ambition with the long-term focus of achieving increased competitiveness. To do this, the Group remains agile in optimizing fleet, workforce, network, costs and continues its sustainability efforts. The Group expects capacity in Available Seat Kilometers back to 2019 levels as from 2024.
The transformation efforts of the Group, including FTE reduction, fleet renewal and spend optimization, will compensate the inflationary pressure on cost. Therefore, the Group expects to decrease its unit cost by -1% to -4% against a constant fuel price, constant currency and excluding Emission Trading Scheme costs (ETS) compared to 2022.
The Adjusted Operating Free Cash Flow excluding exceptionals is expected to remain positive. Exceptionals include the payment of the air-freight litigation and the deferrals of social charges and wage taxes accumulated during the Covid 19 period.
The Net debt/EBITDA target ratio is expected to remain between 1.5x and 2.0x.
The Group’s medium-term financial ambition is to reach an Operating Margin of 7% to 8% .
BUSINESS REVIEW
Network: Significant improvement in revenues and operating result
Network Fourth quarter Full Year 202 2 Change Change constant currency 202 2 Change Change constant currency Total revenues (€m) 6,204 +46.3% +41.9% 22,758 +85.7% +80.5% Scheduled revenues (€m) 5,941 +47.6% +42.7% 21,844 +89.6% +83.6% Operating result (€m) 237 +91 +97 1,131 +2,713 +2,732
Compared to 2021, Full year 2022 total revenues increased by 80.5% at constant currency to 22,758 million euros. The operating result amounted to 1,131 million euros, which represents an 2,732 million euros increase at constant currency compared to last year.
Strong yields on our diversified network
Fourth quarter Full Year Passenger network 202 2 Change Change constant currency 202 2 Change Change constant currency Passengers (thousands) 16,490 +28.4% 64,968 +81.2% Capacity (ASK m) 63,282 +18.3% 245,457 +39.4% Traffic (RPK m) 54,439 +44.4% 205,733 +103.5% Load factor 86.0% +15.5 pt 83.8% +26.4 pt Total passenger revenues (€m) 5,359 +66.3% +61.7% 19,254 +122.2% +116.7% Scheduled passenger revenues (€m) 5,210 +66.4% +60.9% 18,794 +125.0% +118.1% Unit revenue per ASK (€ cts) 8.23 +40.6% +36.0% 7.66 +61.3% +56.4%
FY 2022 capacity in Available Seat Kilometers (ASK) was 39.4% higher than last year and at 85% of 2019 Fourth quarter level, which is at the same level as the Group’s guidance provided during the Third quarter 2022 results presentation.
In response to the rise in fuel prices and other external costs, the Group proceeded to several fare increases during 2022 across all flights. The amount of the increase varied according to destination and class of travel, and applied to flights operated by Air France and KLM. Additionally, in line with the strong summer demand, the strong performance in Premium cabins and the solid corporate traffic recovery have all led to a yield above 2019 for the full year.
During Q4 we observed per area the following trends:
North Atlantic: Q4 is slightly down after this summer's performance but still very dynamic with capacity slightly higher than 2019. Performance continued driven by Point of Origin North America and India with a positive impact on yield. Good performance of business cabin for Air France and premium economy for KLM. Latin America: Capacity gradully increased since summer in still favorable performance context. Asia & Middle East: Additional capacity due the reopening of Japan and extra frequencies on Dubai. India continued to show a strong performance on volumes and yields. Business cabin performance remained strong with good dynamics. Caribbean & Indian Ocean: Continuation of good Third quarter results especially driven by French West Indies and last minute demand. Africa: A strong corporate recovery was observed in all areas. For KLM, the performance was driven by East and South Africa with strong yield increase linked to positive cabin mix and a positive economy yield evolution. For Air France, performance was driven by West and Central African countries with a good steering strategy. Short and Medium-haul: Strong demand on the Air France side resulting in slightly higher Load factors than in 2019. KLM volumes were impacted by capacity cuts in the context of a tight labor market as well as imposed departing passenger limits, though yield development was favorable. Over the course of 2022, the Group continued to introduce new generation aircraft to its fleet and phased out old generation aircraft which resulted in a reduction of 15 aircraft. The long haul fleet was expanded by 1 aircraft, while the medium haul fleet has been reduced by 7 aircraft and the regional fleet decreased by 9 aircraft.
Cargo: decrease in traffic compensated by strong yield resulting in a broadly stable revenue in 2022
Fourth quarter Full Year Cargo business 202 2 Change Change constant currency 202 2 Change Change constant currency Tons (thousands) 236 -10.8% 931 -11.6% Capacity (ATK m) 3,403 +9.6% 13,256 +15.6% Traffic (RTK m) 1,756 -12.3% 6,888 -14.5% Load factor 51.6% -12.9 pt 52.0% -18.3 pt Total Cargo revenues (€m) 844 -17.2% -20.2% 3,502 -2.4% -5.9% Scheduled cargo revenues (€m) 732 -18.2% -20.9% 3,049 -3.7% -7.0% Unit revenue per ATK (€ cts ) 21.51 -25.3% -27.8% 23.00 -16.7% -19.5%
2022 was a dynamic year, a very strong first half-year was followed by a more softening second part. Due to the resumption of passenger travel, belly capacity improved and resulted in an increase in Available Ton Kilometers of 15.6% versus Full Year 2021. The slower growth of global trade and the partial rebound of sea freight led to decreasing demand for air cargo from the second quarter onwards. Traffic decreased with 14.5% and the unit revenue per ATK decreased by 16.7% due to a decline in yield as well, although the yield remained still above 2021 level. Total Cargo revenues were 2.4% below Full Year 2021.
Compared to the pre-COVID year 2019, cargo capacity in the Full Year was 9% below. However, due to strong yield performance, total revenues in 2022 were 63% higher compared to 2019.
In 2022, Air France-KLM laid a strong foundation for the coming years to remain a credible and prominent air cargo player with the signing of a ten-year cooperation agreement with the CMA-CGM Group. Moreover, as part of Air France-KLM program to replace its aging Full Freighters and to strengthen Cargo’s financials and sustainability, the Group firmed an order for four Airbus A350F freighters destined to Air France in March 2022 (further to an LOI announced in December 2021) and early 2023 an additional order for four A350F freighters (to replace current fleet) to be operated by Martinair on behalf of KLM Cargo was announced.
Investments in Transavia’s growth capacity continues
Fourth quarter Full Year Transavia 202 2 Change 202 2 Change Passengers (thousands) 4,505 +48.1% 18,355 +108.3% Capacity (ASK m) 9,416 +45.9% 37,369 +85.9% Traffic (RPK m) 7,983 +55.6% 31,834 +112.1% Load factor 84.8% +5.3 pt 85.2% +10.5 pt Total passenger revenues (€m) 513 +57.3% 2,218 +119.3% Unit revenue per ASK (€ cts) 5.44 +7.6% 6.06 +19.9% Unit cost per ASK (€ cts) 6.64 +17.7% 6.32 +9.1% Operating result (€m) -113 -7 6 -100 +50
During 2022, the demand recovery in leisure traffic in Europe and North Africa continued. Compared to last year, the capacity increased by 85.9% , traffic increased by 112.1% , and the number of passengers increased by 108.3% resulting in a load factor 10.5 points above 2021.
The operating result stood at -100 million euros and improved by 50 million euros compared to Full Year 2021.
Compared to 2019, Full Year 2022 showed activity levels at index 114 and a load factor below 2019 levels. The average unit revenue per ASK increased by 14% compared to 2019, mainly driven by a strong yield increase of 23% . The average unit cost per ASK increased by 28% versus 2019, mainly driven by the high fuelprice and higher disruption cost.
The fleet of Transavia reached 99 aircraft by the end of the year.
Maintenance business : S olid performance during 2022
Fourth quarter Full Year Maintenance 202 2 Change Change constant currency 202 2 Change Change constant currency Total revenues (€m) 1,018 +27.9% 3,586 +28.0% Third-party revenues (€m) 405 +54. 0 % +41.4% 1,389 +35.8% +33.7% Operating result (€m) 16 -53 -55 163 75 81 Operating margin (%) 1.5% -7.1 pt -7.0 pt 4.5% +1.4 pt +1.7 pt
Full Year operating result stood at 163 million euros, which represents an increase of 81 million euros at constant currency compared to Full Year 2021 and is due to a higher activity and an operational improvement.
Total revenues increased by 28% in 2022 while third party revenues increased by 33.7% at constant currency, showing a strong recovery. 4.5% , which is 1.4 point higher than the operating margin in 2021. Compared to Full Year 2019 the margin is still one point lower.
Adjusted operating free cash flow positive leading to a Net debt/EBITDA ratio at 1.8 x
Fourth quarter Full Year In € million 202 2 Change 202 2 Change Cash flow before change in WCR and Voluntary Departure Plans, continuing operations (€m) 683 -28 3,121 +2,901 Cash out related to Voluntary Departure Plans (€m) -58 +20 -233 +63 Change in Working Capital Requirement (WCR) (€m) -280 -529 1,968 +358 Net cash flow from operating activities (€m) 345 -537 4,856 3,322 Net investments* (€m) -688 -239 -2,092 -789 Operating free cash flow (€m) -343 -776 2,764 2,533 Repayment of lease debt -208 +0 -861 +1 Adjusted operating free cash flow** -551 -776 1,903 +2,534
* S um 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 .
** The “Adjusted operating free cash flow ” is operating free cash flow after deducting the repayment of lease debt.
The Group generated an adjusted operating free cash flow in 2022 of 1.9 billion euros, which is 2.5 billion euros higher than last year.
In € million 3 1 Dec 202 2 31 Dec 202 1 Net debt 6,337 8,216 EBITDA trailing 12 months 3,615 745 Net debt/EBITDA 1.8 x 11.0 x
Significant increase in Full Year revenues resulting in positive and improved operating result for both airlines
Fourth quarter Full Year 202 2 Change 202 2 Change Air France Group Operating result (€m) 144 +9 2 483 +1,886 Operating margin (%) 3.2% +1.4 pt 3.0% +19.0 pt KLM Group Operating result (€m) -2 -129 706 +933 Operating margin (%) -0.1% -6.3 pt 6.6% +10.3 pt
The audit procedures have been completed. The audit report is in the process of being issued.
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The results presentation is available at www.airfranceklm.com on February 17, 2023 from 7:00 am CET.
A conference call hosted by Mr. Smith (CEO) and Mr. Zaat (CFO) will be held on February 17, 2023 at 08.15 am CET.
France: Local +33 (0)1 76 77 22 88
Confirmation code: 8967838
Income Statement
Fourth quarter Full Year €m 202 2 202 1 * Change 202 2 202 1 * Change Revenues from ordinary activities 7,128 4,838 47% 26,393 14,315 84% Aircraft fuel -2,057 -937 120% -7,241 -2,748 164% Chartering costs -101 -93 9% -387 -325 19% Landing fees and air route charges -439 -350 25% -1,710 -1,185 44% Catering -195 -132 48% -720 -382 88% Handling charges and other operating costs -418 -317 32% -1,608 -1,027 57% Aircraft maintenance costs -613 -444 38% -2,256 -1,625 39% Commercial and distribution costs -246 -130 89% -887 -385 130% Other external expenses -412 -312 32% -1,488 -1,152 29% Salaries and related costs -2,049 -1,526 34% -7,289 -5,340 36% Taxes other than income taxes -38 -16 138% -156 -116 34% Other income and expenses 226 247 -9% 964 715 35% EBITDA 786 828 -5% 3,615 745 385% Amortization, depreciation and provisions -652 -649 0% -2,422 -2,371 2% Income from current operations 134 179 -25% 1,193 -1,626 nm Sales of aircraft equipment 21 1 2000% 66 -19 nm Other non-current income and expenses -21 20 nm -65 -887 -93% Income from operating activities 134 199 -33% 1,194 -2,532 nm Cost of financial debt -153 -247 -38% -569 -730 -22% Income from cash and cash equivalent 33 0 nm 41 2 1950% Net cost of financial debt -120 -247 -51% -528 -728 -27% Other financial income and expenses 295 -91 nm -324 -289 12% Income before tax 309 -139 nm 342 -3,549 nm Income taxes 183 26 604% 390 282 38% Net income of consolidated companies 492 -113 nm 732 -3,267 nm Share of profits (losses) of associates 12 -13 nm 12 -27 nm Net income for the period 504 -126 nm 744 -3,294 nm Non-controlling interests 8 0 nm 16 -2 nm Net income for the period – Group part 496 -126 nm 728 -3,292 nm
* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)
Consolidated Balance Sheet
Assets 3 1 Dec 202 2 31 Dec 202 1 €m Goodwill 225 222 Intangible assets 1,337 1,235 Flight equipment 10,614 10,466 Other property, plant and equipment 1,375 1,402 Right-of-use assets 5,428 5,148 Investments in equity associates 120 109 Pension assets 39 - Other non-current financial assets 1,184 951 Non-current derivatives financial assets 262 143 Deferred tax assets 714 278 Total non-current assets 21,298 19,954 Other current financial assets 620 484 Current derivatives financial assets 327 469 Inventories 723 567 Trade receivables 1,785 1,511 Other current assets 847 966 Cash and cash equivalents 6,626 6,658 Assets held for sale 79 74 Total current assets 11,007 10,729 Total assets 32,305 30,683
Liabilities and equity 3 1 Dec 202 2 31 Dec 202 1 In million euros Issued capital 2,571 643 Additional paid-in capital 5,217 4,949 Treasury shares -25 -25 Perpetual bonds 933 3,151 Reserves and retained earnings -11,700 -12,542 Equity attributable to equity holders of Air France-KLM -3,004 -3,824 Non-controlling interests 524 8 Total Equity -2,480 -3,816 Pension provisions 1,634 1,939 Non-current return obligation liabilities and provisions for leased aircraft and other provisions 4,149 4,055 Non-current financial liabilities 9,657 11,274 Non-current lease debt 3,318 2,924 Non-current derivatives financial liabilities 21 25 Deferred tax liabilities 1 1 Other non-current liabilities 2,343 2,555 Total non-current liabilities 21,123 22,773 Current return obligation liabilities and provisions for leased aircraft and other provisions 740 885 Current financial liabilities 896 1,215 Current lease debt 834 825 Current derivatives financial liabilities 83 46 Trade payables 2,424 1,850 Deferred revenue on ticket sales 3,725 2,644 Frequent flyer programs 900 888 Other current liabilities 4,057 3,369 Bank overdrafts 3 4 Total current liabilities 13,662 11,726 Total equity and liabilities 3 2 , 305 30,683
Statement of Consolidated Cash Flows from 1 January until 3 1 December 2022
€m 3 1 Dec 202 2 3 1 Dec 202 1 * Net income 744 -3,294 Amortization, depreciation and operating provisions 2,422 2,371 Financial provisions 145 115 Loss (gain) on disposals of tangible and intangible assets -92 18 Loss (gain) on disposals of subsidiaries and associates 1 -26 Derivatives – non monetary result -4 -39 Unrealized foreign exchange gains and losses, net 151 257 Share of (profits) losses of associates -12 27 Deferred taxes -436 -284 Impairment 32 40 Other non-monetary items -63 739 Financial Capacity 2,888 -76 (Increase) / decrease in inventories -155 -41 (Increase) / decrease in trade receivables -146 -239 Increase / (decrease) in trade payables 570 395 Increase / (decrease) in advanced ticket sales 1,092 227 Change in other assets and liabilities 607 1,268 Change in working capital requirement 1,968 1,610 Net cash flow from operating activities 4,856 1,534 Acquisition of subsidiaries, of shares in non-controlled entities -3 -4 Purchase of property, plant and equipment and intangible assets -2,972 -2,202 Proceeds on disposal of subsidiaries, of shares in non-controlled entities -1 75 Proceeds on disposal of property, plant and equipment and intangible assets 880 899 Dividends received 2 2 Decrease (increase) in net investments, more than 3 months -59 -9 Net cash flow used in investing activities -2,153 -1,239 Increase of equity 1,551 1,024 Capital increase paid by non controlling interests 3 - Perpetual -969 - Coupons on perpetual -252 - Issuance of debt 1,110 1,724 Repayment on debt -3,078 -1,993 Payments on lease debt -861 -862 New loans -305 -188 Repayment on loans 45 219 Dividends paid - -1 Net cash flow from financing activities -2,756 -77 Effect of exchange rate on cash and cash equivalents and bank overdrafts (net of cash acquired or sold) 22 14 Change in cash and cash equivalents and bank overdrafts -31 232 Cash and cash equivalents and bank overdrafts at beginning of period 6,654 6,422 Cash and cash equivalents and bank overdrafts at end of period 6,623 6,654
* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)Return on capital employed (ROCE)
In million euros 31 Dec 2022 30 Sep 2022 30 Jun 2022 31 Mar 2022 31 Dec 2021 30 * Sep 20 21 30 * Jun 20 21 31 * Mar 20 21 Goodwill and intangible assets 1,562 1,425 1,437 1,473 1,457 1,456 1,464 1,479 Flight equipment 10,614 10,298 10,521 10,537 10,466 10,478 10,645 10,800 Other property, plant and equipment 1,375 1,349 1,358 1,378 1,402 1,418 1,453 1,476 Right-of-use assets 5,428 5,536 5,439 5,205 5,148 5,061 5,033 4,795 Investments in equity associates 120 111 108 107 109 172 166 223 Financial assets excluding marketable securities and financial deposits 169 164 162 158 157 147 147 146 Provisions, excluding pension, cargo litigation and restructuring -4,347 -4,792 -4,473 -4,240 -4,180 -4,180 -4,033 -4,083 WCR, excluding market value of derivatives -10,092 -10,434 -11,156 -9,589 -8,262 -7,995 -7,745 -6,410 Capital employed 4,829 3,657 3,396 5,029 6,297 6,557 7,130 8,426 Average capital employed (A) 4,228 7,103 Adjusted results from current operations 1,193 -1,626 - Dividends received -1 0 - Share of profits (losses) of associates 12 -27 - Normative income tax -311 462 Adjusted result from current operations after tax (B) 893 -1,191 ROCE, trailing 12 months (B/A) 21.1% -16.8%
* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)
Net debt
Balance sheet at €m 3 1 Dec 202 2 31 Dec 202 1 Current and non-current financial liabilities 10,553 12,489 Current and non-current lease debt 4,152 3,749 Accrued interest -127 -128 Deposits related to financial liabilities -101 -99 Deposits related to lease debt -99 -85 Derivatives impact on debt -35 -14 Gross financial liabilities (A) 14,343 15,912 Cash and cash equivalents 6,626 6,658 Marketable securities > 3 months 572 513 Bonds 811 529 Bank overdrafts -3 -4 Net cash (B) 8,006 7,696 Net debt (A) – (B) 6,337 8,216
Adjusted operating free cash flow
Fourth quarter Full Year €m 202 2 202 1 202 2 202 1 Net cash flow from operating activities 345 882 4,856 1,534 Investment in property, plant, equipment and intangible assets -890 -659 -2,972 -2,202 Proceeds on disposal of property, plant, equipment and intangible assets 202 210 880 899 Operating free cash flow -343 433 2,764 231 Payments on lease debt -208 -208 -861 -862 Adjusted operating free cash flow -551 225 1,903 -631
Bridge from EBITDA to Financial capacity
Fourth quarter Full Year 202 2 202 1 * 202 2 202 1 * EBITDA 786 828 3,615 745 Provisions (CO2 and other) 75 10 90 -6 Correction of spare parts inventory -5 1 -1 5 Addition to pension provisions 28 38 125 206 Reversal to pension provisions (cash-out) -50 -40 -100 -140 Sales of tangible and intangible assets (excluding aeronauticals) 5 -1 32 30 Income from operation activities - cash impact 839 836 3,761 840 Restructuring costs -58 -78 -233 -296 Other non-current income and expenses 0 -8 -7 -74 Cost of financial liability -153 -137 -582 -577 Financial income 28 -3 25 -14 Realized foreign exchanges gain/loss -11 14 -22 63 Termination of trading hedges - cash 0 0 0 -8 Settlements of forwards derivates - cash 0 0 0 -3 Current income tax -20 5 -46 -1 Other financial charges & expenses - cash 0 0 -11 -8 Other elements 0 4 3 2 Financial capacity 625 633 2,888 - 76
* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)
Unit cost: net cost per ASK
Fourth quarter Full Year 202 2 202 1 * 202 2 202 1 * Revenues (in €m) 7,128 4,838 26,393 14,315 Income/(loss) from current operations (in €m) -/- -134 -179 -1,193 1,626 Total operating expense (in €m) 6,994 4,659 25,200 15,941 Passenger network business – other revenues (in €m) -150 -92 -461 -313 Cargo network business – other revenues (in €m) -113 -125 -453 -421 Third-party revenues in the maintenance business (in €m) -405 -263 -1,389 -1,023 Transavia - other revenues (in €m) -1 0 45 3 Third-party revenues of other businesses (in €m) -5 -7 -26 -27 Net cost (in €m) 6,319 4,173 22,914 14,161 Capacity produced, reported in ASK* 72,698 59,937 282,826 196,116 Net cost per ASK (in € cents per ASK) 8.69 6.96 8.10 7.22 Gross change 24.9% 12.2% Currency effect on net costs (in €m) -141 -397 Change at constant currency 20.8% 9.1% Fuel price effect (in €m) 639 2,078 Net cost per ASK on a constant currency and fuel price basis (in € cents per ASK) 8.69 8.26 8.10 8.48 Change at constant currency and fuel price basis +5.2% -4.5%
* Restated figures include the change in accounting principles for pensions (interpretation of IAS19)
Group results
Air France Group
Fourth quarter Full Year 202 2 Change 202 2 Change Revenue (in €m) 4,541 +53.9% 16,285 +86.2% EBITDA (in €m) 532 +6 9 1,961 +1,915 Operating result (in €m) 144 +9 2 483 +1,886 Operating margin (%) 3.2% +1.4 pt 3.0% +19.0 pt Operating cash flow before WCR and restructuring cash out (in €m) 457 +65 1,601 +1,919 Operating cash flow (before WCR and restructuring) margin 10.1% -3.2 pt 9.8% +13.5 pt
KLM Group
Fourth quarter Full Year 202 2 Change 202 2 Change Revenue (in €m) 2,758 +35.3% 10,679 +76.1% EBITDA (in €m) 261 -10 4 1,678 +984 Operating result (in €m) -2 -129 706 +933 Operating margin (%) -0.1% -6.3 pt 6.6% +10.3 pt Operating cash flow before WCR and restructuring cash out (in €m) 213 -115 1,535 +1,010 Operating cash flow (before WCR and restructuring) margin 7.7% -8.4 pt 14.4% +5.7 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 3 1 December 202 2
Aircraft type AF (incl. HOP) KL (incl. KLC & MP) Transavia Owned Finance lease Operating lease Total In operation Change / 31/12/2 1 B777-300 43 16 18 17 24 59 59 B777-200 18 15 26 1 6 33 33 -3 B787-9 10 13 4 7 12 23 23 B787-10 7 2 5 7 7 2 A380-800 4 2 1 1 4 A350-900 20 3 7 10 20 20 8 A330-300 5 5 5 5 1 A330-200 15 6 11 10 21 21 Total Long-Haul 110 62 0 66 38 68 172 168 8 B737-900 5 5 5 5 B737-800 31 95 34 8 84 126 125 9 B737-700 9 4 7 6 13 10 -4 A321 18 10 8 18 18 -1 A320 39 3 4 32 39 39 -3 A319 19 11 8 19 17 -11 A318 9 5 4 9 9 -3 A220-300 16 12 4 16 15 9 Total Medium-Haul 101 45 99 87 12 146 245 238 -4 Canadair Jet 1000 6 6 6 -11 Canadair Jet 700 Embraer 195 E2 14 14 14 14 7 Embraer 190 19 30 17 4 28 49 49 2 Embraer 175 17 3 14 17 17 Embraer 170 13 10 3 13 13 -2 Embraer 145 Total Regional 38 61 0 36 18 45 99 93 -4 B747-400ERF 3 3 3 3 B747-400BCF 1 1 1 1 B777-F 2 2 2 2 Total Cargo 2 4 0 4 0 2 6 6 0 Total 251 172 99 193 68 261 522 505 0
FOURTH QUARTER 2022 TRAF F IC
Passenger network activity*
Q 4 Year to date Total Passenger network* 2022 2021 Variation 2022 2021 Variation Passengers carried (‘000s) 16,490 12,840 28.4% 64,968 35,855 81.2% Revenue pax-kilometers (m RPK) 54,438 37,710 44.4% 205,732 101,091 103.5% Available seat-kilometers (m ASK) 63,281 53,485 18.3% 245,457 176,019 39.4% Load factor (%) 86.0% 70.5% 15.5 83.8% 57.4% 26.4 Long-haul Passengers carried (‘000s) 6,123 4,147 47.6% 22,908 11,038 107.5% Revenue pax-kilometers (m RPK) 45,488 30,066 51.3% 168,207 78,353 114.7% Available seat-kilometers (m ASK) 52,143 42,893 21.6% 198,824 143,359 38.7% Load factor (%) 87.2% 70.1% 17.1 84.6% 54.7% 29.9 North America Passengers carried (‘000s) 2,067 1,248 65.7% 8,303 3,100 167.9% Revenue pax-kilometers (m RPK) 14,799 8,971 65.0% 59,383 22,405 165.0% Available seat-kilometers (m ASK) 17,101 13,461 27.0% 70,608 42,631 65.6% Load factor (%) 86.5% 66.6% 19.9 84.1% 52.6% 31.5 Latin America Passengers carried (‘000s) 859 562 53.0% 3,102 1,293 139.9% Revenue pax-kilometers (m RPK) 8,175 5,420 50.8% 29,502 12,454 136.9% Available seat-kilometers (m ASK) 9,031 6,590 37.0% 33,097 23,211 42.6% Load factor (%) 90.5% 82.2% 8.3 89.1% 53.7% 35.5 Asia / Middle East Passengers carried (‘000s) 1,150 606 89.8% 3,623 1,706 112.4% Revenue pax-kilometers (m RPK) 8,561 4,090 109.3% 26,121 11,440 128.3% Available seat-kilometers (m ASK) 10,062 7,905 27.3% 32,915 29,731 10.7% Load factor (%) 85.1% 51.7% 33.3 79.4% 38.5% 40.9 Africa Passengers carried (‘000s) 1,040 845 23.1% 3,870 2,578 50.1% Revenue pax-kilometers (m RPK) 6,357 4,846 31.2% 23,170 14,398 60.9% Available seat-kilometers (m ASK) 7,449 6,657 11.9% 27,974 23,003 21.6% Load factor (%) 85.3% 72.8% 12.5 82.8% 62.6% 20.2 Caribbean / Indian Ocean Passengers carried (‘000s) 1,007 887 13.5% 4,012 2,362 69.8% Revenue pax-kilometers (m RPK) 7,595 6,738 12.7% 30,032 17,656 70.1% Available seat-kilometers (m ASK) 8,501 8,280 2.7% 34,230 24,782 38.1% Load factor (%) 89.3% 81.4% 8.0 87.7% 71.2% 16.5 Short and Medium-haul Passengers carried (‘000s) 10,366 8,693 19.3% 42,057 24,817 69.5% Revenue pax-kilometers (m RPK) 8,951 7,644 17.1% 37,525 22,739 65.0% Available seat-kilometers (m ASK) 11,138 10,592 5.2% 46,634 32,660 42.8% Load factor (%) 80.4% 72.2% 8.2 80.5% 69.6% 10.8
* Air France and KLM
Transavia activity
Q 4 Year to date Transavia 2022 2021 Variation 2022 2021 Variation Passengers carried (‘000s) 4,505 3,042 48.1% 18,355 8,814 108.3% Revenue pax-kilometers (m RPK) 7,983 5,131 55.6% 31,834 15,012 112.1% Available seat-kilometers (m ASK) 9,416 6,452 45.9% 37,369 20,097 85.9% Load factor (%) 84.8% 79.5% 5.3 85.2% 74.7% 10.5
Total group passenger activity**
Q 4 Year to date Total group** 2022 2021 Variation 2022 2021 Variation Passengers carried (‘000s) 20,995 15,881 32.2% 83,323 44,669 86.5% Revenue pax-kilometers (m RPK) 62,422 42,841 45.7% 237,567 116,103 104.6% Available seat-kilometers (m ASK) 72,698 59,937 21.3% 282,826 196,116 44.2% Load factor (%) 85.9% 71.5% 14.4 84.0% 59.2% 24.8
** Air France, KLM and Transavia
Cargo activity
Q 4 Year to date Total Group 2022 2021 Variation 2022 2021 Variation Revenue tonne-km (m RTK) 1,756 2,001 (12.2% ) 6,888 8,057 (14.5% ) Available tonne-km (m ATK) 3,403 3,106 9.6% 13,256 11,469 15.6% Load factor (%) 51.6% 64.4% (12.9) 52.0% 70.2% (18.3)
Air France activity
Q4 Year to date Total Passenger network activity 2022 2021 Variation 2022 2021 Variation Passengers carried (‘000s) 10,153 7,644 32.8% 39,130 21,816 79.4% Revenue pax-kilometers (m RPK) 33,203 22,153 49.9% 123,444 60,180 105.1% Available seat-kilometers (m ASK) 38,313 30,327 26.3% 146,796 93,568 56.9% Load factor (%) 86.7% 73.0% 13.6 84.1% 64.3% 19.8
Long-haul Passengers carried (‘000s) 3,829 2,586 48.0% 14,282 6,988 104.4% Revenue pax-kilometers (m RPK) 27,696 17,862 55.1% 101,269 47,127 114.9% Available seat-kilometers (m ASK) 31,588 24,429 29.3% 119,437 75,071 59.1% Load factor (%) 87.7% 73.1% 14.6 84.8% 62.8% 22.0
Short and Medium-haul Passengers carried (‘000s) 6,323 5,058 25.0% 24,844 14,828 67.6% Revenue pax-kilometers (m RPK) 5,508 4,291 28.4% 22,175 13,054 69.9% Available seat-kilometers (m ASK) 6,725 5,898 14.0% 27,360 18,497 47.9% Load factor (%) 81.9% 72.8% 9.1 81.1% 70.6% 10.5
Q4 Year to date Cargo activity 2022 2021 Variation 2022 2021 Variation Revenue tonne-km (m RTK) 929 955 (2.7% ) 3,559 3,603 (1.2% ) Available tonne-km (m ATK) 1,950 1,677 16.3% 7,494 5,871 27.7% Load factor (%) 47.6% 56.9% (9.3) 47.5% 61.4% (13.9)
KLM activity
Q4 Year to date Total Passenger network activity 2022 2021 Variation 2022 2021 Variation Passengers carried (‘000s) 6,337 5,196 22.0% 25,838 14,039 84.0% Revenue pax-kilometers (m RPK) 21,236 15,558 36.5% 82,289 40,912 101.1% Available seat-kilometers (m ASK) 24,968 23,158 7.8% 98,660 82,452 19.7% Load factor (%) 85.1% 67.2% 17.9 83.4% 49.6% 33.8
Long-haul Passengers carried (‘000s) 2,294 1,561 47.0% 8,626 4,050 113.0% Revenue pax-kilometers (m RPK) 17,793 12,204 45.8% 66,939 31,227 114.4% Available seat-kilometers (m ASK) 20,555 18,463 11.3% 79,386 68,288 16.3% Load factor (%) 86.6% 66.1% 20.5 84.3% 45.7% 38.6
Short and Medium-haul Passengers carried (‘000s) 4,043 3,635 11.2% 17,212 9,989 72.3% Revenue pax-kilometers (m RPK) 3,443 3,353 2.7% 15,350 9,685 58.5% Available seat-kilometers (m ASK) 4,413 4,694 (6.0% ) 19,274 14,163 36.1% Load factor (%) 78.0% 71.4% 6.6 79.6% 68.4% 11.3
Q4 Year to date Cargo activity 2022 2021 Variation 2022 2021 Variation Revenue tonne-km (m RTK) 828 1,047 (20.9% ) 3,330 4,454 (25.2% ) Available tonne-km (m ATK) 1,453 1,430 1.7% 5,762 5,598 2.9% Load factor (%) 57.0% 73.2% (16.3) 57.8% 79.6% (21.8)
1 Change versus 31 Dec 2021
