I N V E S TO R P R E S E N TAT I O N - Aeroflot...Q1 2017 Q1 2018 25.2 27.6 18.3 22.6 43.4 50.1 2016...
Transcript of I N V E S TO R P R E S E N TAT I O N - Aeroflot...Q1 2017 Q1 2018 25.2 27.6 18.3 22.6 43.4 50.1 2016...
A E R O F L O T G R O U PI N V E S T O R P R E S E N T AT I O N
June 2018
2
This document has been prepared by PJSC “Aeroflot” (the “Company”). By attending the meeting where the presentation is made, or by reading the
presentation slides, you agree to the following.
This document does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to
purchase or subscribe for, any securities of the Company in any jurisdiction, nor shall it or any part of it nor the fact of its presentation or distribution form
the basis of, or be relied on in connection with, any contract or investment decision.
No reliance may be placed for any purpose whatsoever on the information contained in this document or on assumptions made as to its completeness.
No representation or warranty, express or implied, is given by the Company, its subsidiaries or any of their respective advisers, officers, employees or
agents, as to the accuracy of the information or opinions or for any loss howsoever arising, directly or indirectly, from any use of this presentation or its
contents.
This document may include forward-looking statements. These forward-looking statements include matters that are not historical facts or statements
regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial
condition, liquidity, prospects, growth, strategies, and the market in which the Company operates. By their nature, forwarding-looking statements involve
risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you
that forward-looking statements are not guarantees of future performance and that the Company’s actual results of operations, financial condition and
liquidity and the development of the market in which the Company operates may differ materially from those made in or suggested by the forward-
looking statements contained in this document. The Company does not undertake any obligation to review or confirm expectations or estimates or to
update any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation.
Disclaimer
3
36.6 bn
34.5 bn10.3 mln
PAX
+ 6.6 %
ASK
+ 6.1 %
PASSENGER LOAD
FACTOR¹
+ 0.4 p.p. + 8.5 %
103 bn112 bn
Revenue (RUB)
Q1 2017 Q1 2018
¹ Immaterial deviations throughout the presentation are explained by rounding
78.5%78.0%
• In Q1 2018, Aeroflot Group has continued operational development via expanding capacity onthe back of opportunities provided by the market.
• Capacity growth allowed Aeroflot to increase number of passengers transported as well asboost revenues while keeping PLF in the positive territory.
Aeroflot Group Q1 2018 Highlights
11.0 mln
4
Aeroflot Group Business Seasonality
• Russian air transportation market shows highly pronounced seasonality which influences
quarterly results of Aeroflot Group business.
Source: Company data
Million PAX
Passenger Traffic Passenger Revenue (Sch. + Charter) Blended yield (Sch. + Charter)
Billion RUB RUB/RPK
10.3
12.7
15.4
11.8
11.0
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Passenger traffic, million PAX
87.2
113.6
149.7
107.9
96.9
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Passenger revenue, billion RUB
3.24
3.50
3.74
3.50
3.37
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Passenger yield (blended), RUB/RPK
Share of each quarter in 12M 2017 results
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
21% 25% 31% 24% n/m
Share of each quarter in 12M 2017 results
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
19% 25% 33% 24% n/m
Q1 2018 yield deviation
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
4% (4)% (10)% (4)% -
5
1. Market Update
2. Aeroflot Group Overview
3. Aeroflot Group Operating Performance
4. Network and Schedule Overview
5. Fleet Overview
6. Financial Performance
7. Capital Structure and Liquidity
8. Appendix
6
0.17
2.28
0.65 0.43
3.83
2.97
1.41
0.81
UK USA Turkey Russia
39.2 46.3
52.6 56.4
62.6
2013 2014 2015 2016 2017
110.7 103.1 97.9 101.4 102.3
2013 2014 2015 2016 2017
… from airlines on domestic routesRailways facing increasing competition…
Notes: (1) Total local and foreign carriers’ traffic
Sources: FAAT, Aeroflot estimates
Russian Air Transportation Market: Room for Growth
Total CAGR 4.5%
International – (1.3)% | Domestic – 12.4%
Despite fast growth of the recent years,Russian airline industry still haspromising growth prospects comparedto European & US markets
ChangeFY16-17
31.7%
11.0%
(5.1)%(6.9)%
3.6%
10.9%
10.8%
17.9%
RZD long-haul rail traffic (mln PAX) Domestic air traffic (mln PAX)
(2) Airline PAX per capita per year, as of 2017
Sources: FAAT, Aeroflot estimates
0.17
Domestic PAX per capita
2.28
0.65 0.43
x.xx
(5.0)%
13.6%
20.3%
• Russian market is well positioned for long-term growth on the back of still low penetration, additional potential from
ongoing structural changes and increasing propensity to travel by air as well as advantageous geographical
location.
Russian Total Passenger Traffic Growth, mln PAX(1) Trips per Capita (2)
0.8%
7.3%
Long-distance rail routes low over 10mln PAX in the recent 5 years andover 30 mln PAX over a decade
Domestic air traffic growth at a muchhigher pace than other means oftransportation
39.2 46.3 52.6 56.4 62.6
64.4 65.5 54.7 46.461.1
103.7111.8 107.3 102.8
123.7
0.0
50.0
100.0
150.0
2013 2014 2015 2016 2017Domestic Routes International Routes
7
11.0
3.2
1.6 1.8
3.44.6
AeroflotGroup
S7 Group Ural Airlines UTair Group ForeignCarriers
Others
5.7 6.1
4.6 4.9
10.3 11.0
Q1 2017 Q1 2018
25.2 27.6
18.322.6
43.450.1
2016 2017
56.4 62.6
46.461.1
102.8
123.7
2016 2017
Competitive Dynamics
Source: TCH, Company estimates
Note: Incl. foreign carriers’ traffic.
Passenger Traffic: Market vs Aeroflot Group Change in Airlines’ Passenger Numbers
mln PAX, Q1 2018
Q1 2017
Market Share (PAX)
Q1 2018
+0.7
+0.2+0.2
+1.0
Increase in PAX million
Source: TCH, Rosaviatsia, Company estimates / 1 UTair Group includes UTair, Utair-Cargo and Turuhan
Foreign Airlines Other Russian Airlines
-2.5 p.p.
6.6%
6.5%
6.8%
10.8%
15.3%
23.9% Total Market 18.1%
37.1% International 22.0%
12.0% Domestic 14.7%
Russian Air Transportation Market (million PAX)
inc. PAX of Russian and Foreign Carriers and int. transit PAX
Aeroflot Group (million PAX)
10.9%
31.7%
9.7%
23.3%
Market Dynamics Net of Aeroflot Group
• Aeroflot Group continued to deliver growth on further recovering market increasing PAX by 6.6% with acceleration on both
domestic and international routes.
20.3%
“Clean” Market Share of Aeroflot Group (Net of Intl.-Intl. Transit Traffic)
42.9% Aeroflot Group 40.3%
1
+0.3
+0.5
12.9%
15.4%
12.2 13.5
10.4 12.0
22.625.6
Q1 2017 Q1 2018
International Routes
Domestic Routes
45.5%
12.9%
6.8%
5.9%
13.0%
15.9%
43.0%
12.4%6.9%
6.5%
13.4%
17.9%
8
25.3 %
42.5 %
36.1 %
20.7 %
15.3 %13.4% 12.2%
7.4%
12.7%10.8%
18.6% 25.7% 20.5% 16.4% 12.9%
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
International Domestic
Passenger Traffic (Russian and Foreign Carriers) Capacity (Russian and Foreign Carriers)
Continuing Market Recovery
Change in PAX traffic y-o-y, % Change in ASK y-o-y, %
Capacity (Russian Carriers) Passenger Load Factor (Russian Carriers)
• Beginning of 2018 is marked by further market recovery on the back of higher demand in both international and domestic segments.
Change in PLF y-o-y, percentage pointsChange in ASK y-o-y, %
Source: SRS for foreign carriers, Rosaviatsia for domestic carriers, Company calculations
ASK is calculated based on published RPK and PLF dataSource: TCH, Company calculations
Source: Rosaviatsia, Company calculations
ASK is calculated based on published RPK and PLF data
Total market
Source: Rosaviatsia, Company calculations
Quarterly PLF is calculated based on published RPK and PLF data
(2.5)%
13.0%
21.8%
14.6%
16.9%
19.6%21.0%
17.2%
11.9%
16.4%
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018Foreign carriers Russian carriers
24.7%
33.4%
28.8%
17.6%16.4%
14.0%
9.3%
5.9% 6.2%
16.4%
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018International Domestic
5.0
3.8
0.9 0.8 0.3
(0.3)
1.6
0.3
3.7
(3.5)
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
International Domestic
9
1. Market Update
2. Aeroflot Group Overview
3. Aeroflot Group Operating Performance
4. Network and Schedule Overview
5. Fleet Overview
6. Financial Performance
7. Capital Structure and Liquidity
8. Appendix
10
67.3%
Aeroflot Group Multi-Brand Strategy
1 PAX contribution as of 3M 2018. Absolute number of passengers in million in green circle
• Flagship carrier
• Premium product (4 Stars)
• High income and middle class
• Hub and spoke model
• Regional and leisure product
Focus on domestic flights
• Selected international routes,
mostly out of VKO airport in
Moscow
• Charter operations
Premium
Regional and Charter
Regional / Far-East
Low Cost
Business Model Focus Airport PAX Contribution1Brand PAX Growth
Q1 2018
7.0 7.4
7.4
+5.4%
2.0 1.9
1.0
1.4
(6.7)%
+42.2%
0.30 0.33
+7.8%
3M 2017 3M 2018
3M 2017 3M 2018
3M 2017 3M 2018
3M 2017 3M 2018
17.0%
12.8%
3.0%
1.9
1.4
0.3
• Moscow
(Sheremetyevo)
• Saint-Petersburg
(Pulkovo)
• Moscow (Vnukovo)
• Vladivostok,
Khabarovsk,
Yuzhno-Sakhalinsk
• Moscow (Vnukovo)• Short and mid-haul flights
• Mostly domestic segment,
selected international
routes
• Point-to-point carriage
• The Far East airline flying on
short- and mid-haul direct
international and domestic
routes
• Flights to remote cities (local
flights)
• Simplified multi-brand product offering to capture customers in every market segment: from premium to low-cost.
• Aeroflot and Pobeda – key engines of the Group – both increased traffic by approximately 0.4 million PAX
11
Overview of the Initiative
• Mid-single digit decline in PAX traffic in Q1 2018 due to efforts to maximize operational and financial efficiency in
low season.
• Plans to catch up with the annual goals during high season.
Rossiya Airline: Q1 Highlights
PLF: international and domestic (%)Passengers: international and domestic (mln PAX)
Mix of Scheduled and Charter Operations
2,0
0,5
1,4
1,9
0,6
1,3
Total International Domestic
3M 2017 3M 2018
76,8%
90,2%
68,1%
82,2%90,9%
74,6%
Total International Domestic
3M 2017 3M 2018
(6.7%)
10.5%
(13.3%)
5.3 p.p.0.7 p.p.
6.5 p.p.
Scheduled76%
Charter24%
Scheduled74%
Charter26%
PAX, Q1 2017 PAX, Q1 2018
Launched direct flight from St.Petersburg to London (Gatwick)
A-la-carte menu for own flights in VKO
Plans to move operations to SVO in 2019
Intelligent capacity management to increase efficiency (domestic routes)
Continued growth in international segment backed by leisure demand
12
Network
• Operating from Vnukovo airport (3rd Moscow airport by PAX)
• Network comprising 62 routes (38 unique for the Group)
• Additional expansion to international destinations (10 countries)
Fleet
• 18 Boeing 737-800 NG (31.03.2018)
• Plans for 6 more aircraft to be delivered in 2018
• Single class cabin
• 189 seats per plane
Key features
and
achievements in
Q1 2018
• 1.4 million PAX in Q1 2018 (+42.2% y-o-y)• Record high Q1 PLF of 93.1% (+1.5 p.p. y-o-y)• International PPK is 25% of total Pobeda traffic• Active development of intra-region flights, and international flights from the regions
2022 Goals• 45 aircraft• c. 15-16 mln PAX
Improving Load Factor
Overview of Pobeda
• Pobeda, the only Russian LCC, is a timely value proposition to cost conscious passengers.
Pobeda Airline: Three Full Years of Successful Operations
Growing Passenger Flows
thousand PAX
Pobeda’s Network (Summer 2018)
Routes from Moscow Routes from Rostov
Gelenzhik
Rostov
Nazran
Makhachkala
Astrakhan
Volgograd
Kazan
Perm
Ufa
Chelyabinsk
EkaterinburgTyumen
Surgut
Novosibirsk
Bergamo
Bratislava
Cologne
Memmingen
Girona
Samara
Cheboksary
LarnacaPaphos
Tivat
Nab. Chelny
Saint Petersburg
Nalchik
Moscow
Vladikavkaz
Routes from St.-Petersburg
PLF, %
Tbilisi
Route from Makhachkala
Routes from Ekaterinburg
Krasnoyarsk
Gyumri
Anapa
Sochi
Alanya
Pisa
Routes from Sochi
Route from Krasnoyarsk
Baden-Baden
Istanbul
Ulan-Ude,
Irkutsk
345.5 303.1 337.1
985.7
479.7 429.1 492.9
1,401.7
Jan Feb Mar Q12017 2018
38.8% 41.6% 46.2%
42.2%
92.3%
91.0%91.5% 91.6%
94.2%
93.0%
92.2%
93.1%
Jan Feb Mar Q12017 2018
+1.9 p.p.
+2.0 p.p.
+0.7 p.p.
+1.5 p.p.
Karlovy Vary
Leipzig
Reus
Venice
Kaliningrad
Batumi
13
40
80
Sheremetyevo development planEvolution of key operating indicators (max. theoretical capacity)
Source: Sheremetyevo press-center, aviation explorer, public sourcesNote:1 Actual passenger traffic of 2017 2 According to IATA Methodology
New Terminal B Highlights New infrastructure objects launched in 2018
Terminal B Interterminal tunnel Express train
20262017
2018
2019
2021
2024
Terminal C-2
Terminal CTerminal B
Warehouse
Cargo
Terminals
Runway-3
Runway-2
Runway-1
Fuel-filling
Complex
Terminal D
Terminal FInterterminal TunnelTerminal E
mm
pax
Annual pax
capacity
Flights per
hour2
55
90
flig
hts
Infrastructure Expansion to Support Future Growth
• Aeroflot has started transferring domestic flights to the new Terminal B starting from May. During the first stage, expected to
finish on 1 June 2018, the Company will transfer 46 return flights to the new terminal.
Capacity – 20 mln PAX (4,200 PAX per hour)
Size – 110 thd sqm
New technologies implemented in the new terminal
Connected to terminal E via interteminal tunnels
1
14
1. Market Update
2. Aeroflot Group Overview
3. Aeroflot Group Operating Performance
4. Network and Schedule Overview
5. Fleet Overview
6. Financial Performance
7. Capital Structure and Liquidity
8. Appendix
15• Strong operating results in Q1 2018: growing PAX flows and PLF on the back of balanced capacity expansion.
Operating Data – Q1 2018
Indicator Unit
Aeroflot airline Aeroflot Group
Q1 2017 Q1 2018 Y-o-Y Q1 2017 Q1 2018 Y-o-Y
Passenger Traffic th PAX 7,015 7,394 5.4% 10,302 10,985 6.6%
International Routes th PAX 3,754 3,899 3.9% 4,578 4,888 6.8%
Domestic Routes th PAX 3,262 3,495 7.1% 5,724 6,097 6.5%
Passenger Turnover mln pkm 20,059 20,975 4.6% 26,934 28,743 6.7%
International Routes mln pkm 13,760 14,325 4.1% 16,531 17,568 6.3%
Domestic Routes mln pkm 6,299 6,651 5.6% 10,403 11,175 7.4%
Passenger Capacity mln ASK 25,805 27,419 6.3% 34,510 36,624 6.1%
International Routes mln ASK 17,723 18,912 6.7% 20,847 22,504 7.9%
Domestic Routes mln ASK 8,082 8,507 5.3% 13,663 14,120 3.3%
Passenger Load Factor % 77.7% 76.5% (1.2) p.p. 78.0% 78.5% 0.4 p.p.
International Routes % 77.6% 75.7% (1.9) p.p. 79.3% 78.1% (1.2) p.p.
Domestic Routes % 77.9% 78.2% 0.3 p.p. 76.1% 79.1% 3.0 p.p.
Tonne-Kilometres mln tkm 2,031 2,112 4.0% 2,683 2,857 6.5%
International Routes mln tkm 1,399 1,451 3.8% 1,650 1,752 6.2%
Domestic Routes mln tkm 633 661 4.4% 1,032 1,105 7.0%
Revenue Flights flights 55,507 60,232 8.5% 82,350 88,538 7.5%
International Routes flights 28,029 30,259 8.0% 33,765 36,869 9.2%
Domestic Routes flights 27,478 29,973 9.1% 48,585 51,669 6.3%
Flight Hours hours 162,023 174,577 7.7% 224,959 241,954 7.6%
16
Q1 2018 Operating Data by Region (Scheduled Routes)
• Strong operating performance on the scheduled routes was partially offset by selective adjustments
in network due to internal and external reasons
Source: Data presented based on management accounting for scheduled flights of Aeroflot Group (excluding charter flights)
Americas Russia CIS
Europe Middle East Asia
Performance of North and Central Americanmarket was supported by addition of 3rdfrequency to NY and increased ASK to otherdestinations, which weighted on PLF.
Russian market is continuing to show consistentgrowth in 2018 with strong PLF performance onthe back of efficient capacity management.
Group KPIs in CIS came under pressure as aresult of subsidiaries’ operating programoptimization while Aeroflot airline showed steadygrowth on all key routes including Kazakhstan.
European market performance benefited fromlaunch of additional frequencies to keydestinations and from new destinations openingduring the last twelve months, putting slightpressure on PLF.
Operating performance of the region significantlyaffected by increased frequencies to Istanbul,Antalya and Dubai backed by strong demand tothe region
Passenger traffic on key regional destinationsstable or trending towards growth (China), highernumber of frequencies to Male supportive foroverall performance of the region.
10.6 %8.6 %
15.4 %
(4.8) p.p.
Passengerscarried
RPK ASK PLF
8.0 %9.4 %
4.8 %3.3 p.p.
Passengerscarried
RPK ASK PLF
(2.5)%
(6.4)%
(4.9)%
(1.2) p.p.
Passengerscarried
RPK ASK PLF
8.6 %9.8 %
12.6 %
(1.8) p.p.
Passengerscarried
RPK ASK PLF
3.1 %2.5 %
1.7 %
0.6 p.p.
Passengerscarried
RPK ASK PLF
3.5 %3.2 %
3.5 %
(0.3) p.p.
Passengerscarried
RPK ASK PLF
17
1. Market Update
2. Aeroflot Group Overview
3. Aeroflot Group Operating Performance
4. Network and Schedule Overview
5. Fleet Overview
6. Financial Performance
7. Capital Structure and Liquidity
8. Appendix
18
12.610.2
15.213.1
8.2
13.111.0
15.513.8
8.3
Scheduled International Domestic Medium-haul Long-haul
Q1 2017 Q1 2018
Aeroflot routes
Rossiya routes
Aurora routes
Average Scheduled Flight Frequency per Route (Aeroflot Group ex-Pobeda)
• Moderate growth of destinations, focus on increase in frequencies on scheduled routes.• Aeroflot Group operates flights to 169 unique destinations in 53 countries (in 2018 summer schedule, incl. Russia
and new destinations to be launched in the upcoming month).
Aeroflot Group Network
(Q1 2018, y-o-y)
Note: 1 Scheduled flights of Aeroflot Group (excluding Pobeda LCC)
4.4%7.5%
2.0%4.7%
1.4%
# of Flights Evolution by Region1
Increase in Group frequencies by 4.4% was predominantly supported by expansion of the number of frequencies ininternational segment (+7.5%) and in the sector of medium-haul routes (+4.7%).
Los Angeles
MOSCOW
Malaga
Alicante
Amsterdam
Brussels
Stockholm
AthensAntalya
Barcelona
Belgrade
Bologna
BudapestParis
Copenhagen
DresdenDusseldorf
Rome
Frankfurt
Geneva
Hannover
Hamburg
Helsinki
Heraklion
Istanbul
Larnaca
London
Lyon
Madrid
Munich
MilanNice
Oslo
Bucharest
Prague
Riga
Thessaloniki
SofiaSplit
Stuttgart
Berlin
Tbilisi
Tenerife
Tivat
Tallinn
Venice
Vienna
Valencia
Kaunas
Warsaw
Zagreb
Zurich
Lisbon
Havana
Washington
New York
Miami
Male
Phuket
Ho Chi Minh City
Geographic Network
MOSCOW
Anapa
Abakan
Adler
Arkhangelsk
Astrakhan
Barnaul
Chelyabinsk
Belgorod
Magadan
Gelenzhdik
Khanty Mansiysk
Irkutsk
Kemerovo
Kaliningrad
Khabarovsk
Krasnoyarsk
Krasnodar
SamaraKazan
Saint Petersburg
Murmansk
Magnitogorsk
Mineral Waters
NizhnekamskNizhny Novgorod
Nizhnevartovsk
Novokuznetsk
New Urengoy
Novosibirsk
Perm
P. Kamchatsky
Orenburg
Rostov
Saratov
SyktyvkarSurgut
Simferopol
Salekhard
Stavropol
EkaterinburgTyumen
TomskUfa
Yu. Sakhalinsk
Volgograd
Voronezh
Vladivostok
Yakutsk
Aktobe
Almaty
Shymkent
Yerevan
Bishkek
Atyrau
Baku
KaragandaChisinau
KostanayMinsk
Aktau
SamarkandTashkent
Astana
Beirut
Dubai
Teheran
Tel Aviv
Bangkok
HanoiHong Kong
Guangzhou
Delhi Shanghai
Tokyo
Beijing
Seoul
Ulan Bator
Sochi
Frankfurt
Dalian
Harbin
Busan
Antalya
BarcelonaBurgas
Paris
Dusseldorf
Rome
Hamburg
Varna
Larnaca
Munich
MilanNice
Prague
Rimini
Berlin
TivatIstanbul
Vienna
Makhachkala
Orly
Omsk
Minsk
Chisinau
4.7 %
13.5 %
4.4 %
15.7 %
3.4 %
7.2 %
2.9 %
Total
Middle East
CIS
North and CentralAmerica
Asia
Europe
Russia
19
• Aeroflot continued to increase frequencies both on the routes with already high capacity deployed as well as
underserved routes.
• Starting from summer 2018 we are launching flights to 6 new destinations in Russia, Kazakhstan, Italy,
Bulgaria and Egypt.
Network Plans – Summer 2018
Increasing frequencies on
domestic routes (examples)
New destinations to be launched from
Summer 2018
1 July
Naples (Italy)
7 flights per week
1 July
Verona (Italy)
7 flights per week
2 July
Burgas (Bulgaria)
7 flights per week
15 July
Kyzylorda (Kazakhstan)
4 flights per week
11 April
Cairo (Egypt)
3 flights per week
1 May
Saransk (Russia)
14 flights per week
1
2
3
4
5
6
56
42
35
38
35
7
7
7
7
7
7
4
7
7
7
7
Yekaterinburg
Rostov
N.Novgorod
Kaliningrad
Ufa
Khanty-Mansiysk
Magnitogorsk
Novy Urengoy
35
28
28
14
14
7
7
3
7
7
7
14
7
7
7
4
Prague
Rome
Milan
Istanbul
Antalya
Dubai
Bucharest
Lyon
Increasing frequencies on
international routes (examples)
Weekly frequency in summer schedule 2017
Addition in weekly frequencies starting from summer schedule 201825 March
St.Pete – London (LGW)
7 flights per week7
20
Average weekly frequency per route – Aeroflot airline
Increase in International – International Traffic
Aeroflot Airline Domestic and International Transit
Considerable share of transit of Aeroflot airline in Sheremetyevo
4.5%
5.4%
Growth
Q1 2018
2.4%
… Results into a Flexible Approach to Transit Flows
• Increasing flight frequency improves connectivity and supports Aeroflot’s traffic growth in Sheremetyevo airport.
• Advantageous geographical positions and Group’s efforts support traffic growth on key European and Asian
destinations.
Growing Connectivity of Aeroflot Airline’s Flights1 ...
Total Aeroflot airline int. – int. transit traffic, million PAX
Pickup in point-to-point demand combined with expanding capacitiesresulting in growing international transfer volumes
12.4 12.5 13.1 12.713.3
22.923.1
24.223.0
23.6
16.1 16.217.0
16.317.0
16.0x 19.1x 21.2x 19.6x 21.3x
2015 2016 2017 Q1 2017 Q1 2018
International Domestic Combined
14.0% 13.1% 13.6% 14.2% 14.7%
16.7% 16.9% 17.5% 16.6% 15.2%
13.5% 12.1% 11.8% 11.6% 10.2%
44.2%42.1% 42.9% 42.3%
40.1%
2015 2016 2017 Q1 2017 Q1 2018Domestic - DomesticInternational - Domestic / Domestic - InternationalInternational - International
3.6 3.74.4
1.0 1.1
2015 2016 2017 Q1 2017 Q1 2018
10.4%
… Backed by Convenient Location of Aeroflot Hub
Source: Company data, IMF, Eurostat, RITA, Russian State Statistics Service, Rosaviatsia.1 Data for Aeroflot airline’s own flights; Aeroflot adopted new frequency per route and connectivity ratio calculation methodology and previous periods were recalculated retrospectively
Connectivity ratio
From/To Paris London Vienna Stockholm Rome
TokyoVia Moscow 15:00 15:05 13:45 13:15 14:55
Via Dubai 18:30 18:55 17:15 17:45 17:30
ShanghaiVia Moscow 14:05 14:10 12:50 12:20 14:00
Via Dubai 17:25 17:50 16:10 16:40 16:25
Hong KongVia Moscow 15:00 14:40 13:20 12:50 14:30
Via Dubai 18:30 17:10 15:30 16:00 15:45
Moscow
Shortest
geographical
distance
21
Operational initiatives, including extra staff, English
speaking personnel in call centre and host cities,
increased stock of replacement components etc
Support for Russian football fans (5 RUB fares)
Charter flights for national football teams
Additional capacity on routes with strong demand
Direct flights between host cities
High frequencies to all host cities (scheduled flights)
Aeroflot and FIFA World Cup 2018 in Russia
Scheduled Routes to World Cup Locations
- routes per weekRossiya routesAeroflot routes
Volgograd(833k from Moscow)(43k from St. Pete)
Saint Petersburg(4.5mm from Moscow)
Kaliningrad(1.2mm from Moscow)(375k from St. Pete)
Moscow(4.5mm from St.Pete)
Saransk
Sochi(3.6mm from Moscow)
(515k from St. Pete)
Samara(1.3mm from Moscow)(216k from St. Pete)
Kazan(1.3mm from Moscow)(142k from St. Pete)
Ekaterinburg(1.9mm from Moscow)(340k from St. Pete)
NizhnyNovgorod
(530k from Moscow)(33k from St. Pete)
sourced by:
• Aeroflot Group is well positioned to leverage opportunities provided by the World Cup and will actively participate in
passenger transportation, including dedicated direct and charter flights.
• We will also invest in our operations to ensure best in-class service and reliable transportation options for all guests of the
Championship as well provide for affordable transportation for Russian football fans.
70
27
23
35
49
13
49
10
14
42
28
13
63
7
49
77
42
Aeroflot Efforts
1
3
4
5
2
6
140
58
from Moscow:
from Moscow:
from Moscow:
from Moscow:
from St. Pete:
from St. Pete:
from St. Pete:
from St. Pete:
from St. Pete:
from St. Pete:
from St. Pete:
X – weekly # of flights in 2017 summer schedule
(XXmm from …) - 2017A PAX (based on traffic flows on the leg, not a city-pair market)
*
Note: Pobeda also operates services to some host cities, including intra-regional flights. For information on Pobeda’s flights please refer to the respective section of the presentation
Rostov-on-Don(1.6mm from Moscow)(262k from St. Pete)
14
22
1. Market Update
2. Aeroflot Group Overview
3. Aeroflot Group Operating Performance
4. Network and Schedule Overview
5. Fleet Overview
6. Financial Performance
7. Capital Structure and Liquidity
8. Appendix
23
1 Excluding An-24 and An-148 not operated by the airlines of the Group2 Excludes planes out of operation
Aeroflot Group Fleet Breakdown
• Well-balanced fleet structure in line with Group’s strategy
Breakdown by Company 2Breakdown by Aircraft 2 Breakdown by Ownership Type 2
Narrow-body
(medium-haul)67%
Narrow-body
(regional) 17%
Wide-body16%
Aeroflot69%
Rossiya19%
Aurora7%
Pobeda5%
Operating86%
Finance12%
Owned2%
Aircraft TypeOperated by Lease type
OwnedTotal as of Total as of Change vs.
Aeroflot Subsidiaries Finance Operating 31-Mar-18 31-Dec-17 31-Dec-17
Wide-body 38 15 18 35 - 53 52 1
Airbus A330 22 - 8 14 - 22 22 -
Boeing 777 16 6 10 12 - 22 21 1
Boeing 747 - 9 - 9 - 9 9 -
Narrow-body (medium-haul) 152 75 19 208 - 227 222 5
Airbus A319 - 36 9 27 - 36 36 -
Airbus A320 76 5 - 81 - 81 80 1
Airbus A321 38 - 10 28 - 38 38 -
Boeing 737 38 34 - 72 - 72 68 4
Narrow-body (regional) 42 14 - 50 6 56 51 5
DHC 8 - 11 - 5 6 11 11 -
DHC 6 - 3 - 3 - 3 3 -
SSJ 100 42 - - 42 - 42 37 5
Total fleet1 232 104 37 293 6 336 325 11
24
Fleet Expansion Strategy
• Aeroflot Group continues to intelligently manage capacity additions and develop its fleet taking into account market
trends and opportunities.
331
409
2017 2018E 2019E 2020E 2021E 2022E
Aeroflot Group Fleet as at Year-end2
Number of aircraft
Delivery/Phase-out Schedule1
+ 11 aircraft + 27 aircraftNet additions (1)
Type of Q1 2018 (Actual)Current
fleet(1)
Q2-Q4 2018
aircraftDelivery Phase
out
Delivery Phase
out
Wide-body (long-haul) 1 - 53 5 -
A-330 - - 22 - -
B-777 1 - 22 5 -
B-747 - - 9 - -
Narrow-body (medium-haul) 10 (5) 227 26 (14)
A-319 - - 36 - (2)
A-320 3 (2) 81 8 (4)
A-321 3 (3) 38 2 (7)
B-737 4 - 72 16 (1)
Narrow-body (regional) 5 - 56 10 -
SSJ-100 5 - 42 8 -
DHC-8 - - 11 - -
DHC-6 - - 3 2 -
TOTAL 16 (5) 336 41 (14)
1 As of 31.03.2018, not including aircraft leased or subleased to other operator (1 An-24 and 5 An-148 ). Phase-out plans for Q2-Q4 2018 include aircraft in finance lease that will be phased out according to the existing plan.
2 According to existing strategy. Not including aircraft leased or subleased to other operator.
325
25
1. Market Update
2. Aeroflot Group Overview
3. Aeroflot Group Operating Performance
4. Network and Schedule Overview
5. Fleet Overview
6. Financial Performance
7. Capital Structure and Liquidity
8. Appendix
26
RUB mln
(where applicable)Q1 2017 Q1 2018 Change
Passenger Traffic (mln PAX) 10,302 10,985 6.6%
Revenue 103,125 111,942 8.5%
Traffic Revenue 87,205 96,896 11.1%
EBITDAR1 13,742 10,767 (21.6)%
EBITDAR1 margin 13.3% 9.6% (3.7) p.p.
EBITDA (1,136) (7,732) 6.8x
Financial Highlights: Q1 2018
• Financial results of Q1 2018 are explained by seasonality pattern of the Russian aviation market
coupled with macroeconomic factors – fuel and exchange rate dynamics.
• Cost pressure were partially offset by increasing yield that helped us to increase revenues ahead
of passenger traffic and passenger turnover
1 EBITDAR = EBITDA + operating lease expenses.
27
103,125
8,772 920 400 (1,274) 111,942
Q1 2017 ScheduledPassenger
Flights
CharterPassenger
Flights
Cargo OtherRevenue
Q1 2018
103,125 5,333
2,837 722 (75) 111,942
Q1 2017 Volume Currency Pricing Other Q1 2018
Revenue Growth Decomposition
• Positive contribution of all volume and support from FX were the main factors influencing revenue.
• Primary driver of revenue growth was expansion of scheduled passenger flights across all segments, notably in
Russia, Europe and Asia
Revenue by Key Factors
RUB mln
8.5% 8.5%
Revenue by Business Segments
RUB mln
5.2% 2.8% 0.7%+ + 8.5% 0.9% 0.4% (1.2)%+ + +
Growth in operating metrics:RPK + 6.7%PAX + 6.6%
Appreciation ofRUB in Q1 2018y-o-y by c3% vs.USD,depreciation ofRUB in Q1 2018y-o-y by c11%vs. EUR
Growth across geographies:Russian revenue + 11.1%International revenue +10.4%
Cargo volumes + 9.6%
Mainly agreements with airlines driven by appreciating RUB vs. USD
Charter RPK up by c6% y-o-y
+ (0.1)%
28
3.05
3.49
3.31
3.09
3.67
3.43
Domestic International Total
2.30
2.72
2.55
2.44
2.80
2.65
Domestic International Total
Aeroflot Group Scheduled Flights Revenue Units
• RUB dynamics and changing mix of operations at subsidiaries’ level due to rapid expansion of LCC affected
RUB yields in Q1 2018.
Note: Data presented based on management accounting figures, scheduled flights revenue is used for calculations.
% Y-o-Y increase 2017 2018
Q1 Yield (PAX Revenue / RPK)
RUB
Q1 RASK (PAX Revenue / ASK)
RUB
1.6%
3.6%
6.0%
4.3%
5.1%3.1%
29
(4.5)%
(0.4)%
1.8%
0.4%
(0.0)%
1.1% 1.1%1.8%
4.1%
2.1%
4.1%3.7%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
(8.9)%
(7.8)%
(6.3)%(6.1)%
(4.8)%
(2.3)%(2.4)%
(1.3)%
0.0%0.4%
4.4%
7.9%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
(11.4)%(11.9)%(10.6)%
(9.5)%(7.3)%
(4.2)% (4.2)%(2.6)% (1.8)%
(0.1)%
4.5%
9.8%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Aeroflot Airline International Yield
Aeroflot Airline Domestic Yield
Aeroflot Airline Yield Dynamics (Monthly)
RUB/RPK, Change y-o-y in %
RUB/RPK, Change y-o-y in %
Aeroflot Airline Total Yield
• Aeroflot airline yields showed improvement on a monthly basis throughout 2017 (y-o-y) and in 2018 yield dynamics
entered positive zone in both international and domestic segments
• In Q1 2018 international segment was the main driver of Aeroflot growth: towards the end of the quarter in March
2018 yield dynamics reached +9.8% y-o-y.
RUB/RPK, Change y-o-y in %
Source: Company calculations, data presented based on management accounting figures for Aeroflot airline standalone; immaterial deviations vs. historical data may occur due to
adjustments in Revenue Management System (RMS)
2017 2018 2017 2018
2017 2018
30
Operating Expense
(RUB mln If not stated otherwise)Q1 2017 Q1 2018
Change
y-o-y
Change
ex. FX & NRE
% of Total OpEx
(Q1 2018)
Fuel 27,427 34,042 24.1% 27.2% 27.6%
Opex (ex. Fuel) 80,635 89,495 11.0% 12.0% 72.4%
Aircraft, traffic and passenger
servicing21,154 21,908 3.6% 2.2% 17.7%
Staff 18,588 21,404 15.2% 15.3% 17.3%
Operating lease 14,878 18,499 24.3% 28.9% 15.0%
Maintenance 8,179 8,469 3.6% 6.0% 6.9%
SG&A1 6,171 6,160 (0.2)% 0.2% 5.0%
D&A and customs duties 3,800 3,864 1.7% 1.7% 3.1%
Other expenses2 7,865 9,191 16.9% 19.0% 7.4%
Total Opex 108,061 123,538 14.3% 15.8% 100.0%
Operating Costs
• In Q1 2018 operating costs were significantly impacted by expansion of operations, fuel price increase and growing fleet of
the Group. FX dynamics also affected key operating expenses lines.
1 Includes sales and marketing expenses and administration and general expenses.2 Other expenses include Global Distribution Systems cost, reserves accrual, catering expenses, banks’ commissions.
31
3.13
0.05
0.13 (0.01) (0.01)0.07 (0.00) (0.01) 0.02
3.37
0.04
3.42
3.13
Reported CASKQ1 2017
Staff Fuel Maintenance Aircraft, Trafficand Passenger
Servicing
Operating Lease D&A and CD* Admin & Sales &Marketing
Other Costs Reported CASKQ1 2018
FX CASK Q1 2018ex. FX
Reported CASKQ1 2017
Group Unit Costs
• Cost per ASK increased by 7.7% from RUB 3.13 in Q1 2017 to RUB 3.37 in Q1 2018 on the back of fuel, staff and
operating lease expenses pressure.
* Customs duties
Operating Expense per ASK (CASK), RUB Q1 2017 Q1 2018 Change
Fuel 0.79 0.93 17.0%
Opex (ex. Fuel): 2.34 2.44 4.6%
Aircraft, Traffic and Passenger Servicing 0.61 0.60 (2.4)%
Staff 0.54 0.58 8.5%
Operating Lease 0.43 0.51 17.2%
Maintenance 0.24 0.23 (2.4)%
SG&A 0.18 0.17 (5.9)%
D&A and Customs Duties 0.11 0.11 (4.2)%
Other Expenses 0.23 0.25 10.1%
Total Opex 3.13 3.37 7.7%
9.2%1.3%7.7%
32
2018
56.6 56.8 57.1 USD/RUB
69.1 65.7 66.9 Brent (USD)
39 641
33 887
28 000
32 000
36 000
40 000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1(WA)
2018 2017
• Efficient fuel procurement: 1-year supply contracts in
airports across Russia
• Majority of fuel purchased in Russia and almost all
fuel at international airports supplied at formula-
linked price - Jet fuel priceIntl = NW Europe (FOB
Rotterdam) price x Discount x FX rate2 x 1.183 +
Storage/Fuelling/Supply fees (if any of these applicable)
• Increasing average fuel price.
Weighted average fuel purchase price of $697/ton
(RUB 39,641/ton) in Q1 2018 vs $576/ton
(RUB 33,887/ton) in Q1 2017 (17.0% y-o-y increase in
RUB terms)
Fuel Cost Management
• Aeroflot is achieving efficiency gain in fuel costs as new aircraft are put into operation
• Oil price and RUB fluctuations led to further upward pressure on jet fuel price in Q1 2018
Flight Hours
7.6%
Fuel Consumption per ASK Fuel Consumption per RTK
Aeroflot Airline Jet Fuel Price
(thousand hours) (gr/ASK) (gr/RTK)
(RUB per tonne of jet fuel)
1
Source: Bloomberg, Company data1 Weighted average price for Q1
Comments
2 USD/RUB exchange rate as per the Central Bank of Russia3 Assuming 18% VAT rate
(1.2)% (1.5)%
225
242
Q1 2017 Q1 2018
22,9 22,6
Q1 2017 Q1 2018
294,8 290,2
Q1 2017 Q1 2018
33
Headcount Overview
• Improvement in labour productivity has resulted in increase of key performance indicators in Q1 2018.
• Aeroflot Group headcount increased by 7.5% vs. March 31, 2017.
Traffic Revenue / Average Airlines’ Headcount PAX Traffic / Average Airlines’ Headcount
9.0%
(million RUB per employee, annualized to 31.03.2018) (passengers per employee, annualized to 31.03.2018)
Aeroflot Group Headcount by Category
6.0%
1 Aeroflot Group headcount table excludes Aeroflot Aviation School headcount amounting to 181 employees as at 31.12.2017 and 194 employees as at 31.03.2018.
31-Dec-2017 31-Mar-2018 %
Cabin crew 11,259 11,661 3.6 %
Airport services 7,034 7,064 0.4 %
Technical maintenance and repair 4,702 4,914 4.5 %
Flight crew 3,846 3,969 3.2 %
Tickets and services sales, advertising 1,903 1,903 0.0 %
Other airline personnel (inc. airlines’ head office) 5,430 5,539 2.0 %
Other non-airline subsidiaries’ personnel 4,696 4,719 0.5 %
Total1 38,870 39,769 2.3 %
Flight crew10.0%
Cabin crew29.3%
Technical maintenance and repair
12.4%
Tickets and services sales, advertising
4.8%
Airport services17.8%
Other airline personnel13.9%
Other non-airline personnel
11.9%
13.5
14.3
31.03.2017 (LTM) 31.03.2018 (LTM)
1,379
1,503
31.03.2017 (LTM) 31.03.2018 (LTM)
34
(1,136)
5,333 722 (75)
2,837
1,647 (7,469)
(2,838)
(455)(4,297)
(494) (10)(1,497)
(7,732)
Reported
EBITDA Q1
2017
Volume Pricing Other FX benefit on
revenue
FX benefit on
costs
Fuel* Staff* Aircraft, Traffic
and PAX*
Operating
Leases*
Maintenance* Admin & Sales
& Marketing*
Other OPEX* Reported
EBITDA Q1
2018
(RUB mln)
EBITDA Evolution
* Excluding currency impact
• Positive FX impact was observed both on revenue and operating costs due to multidirectional dynamics of
RUB vs. USD and EUR.
• Key drivers of EBITDA adjustment along with the growth in size and scale of operations were fuel and
operating lease costs increase.
Net volume and price effect
∑=(17,059) RUB mln
Total effect on revenue
∑=8,817 RUB mln
Total effect on costs
∑=(15,412) RUB mln
Net volume and price effect
∑=5,980 RUB mlnNet FX effect
∑=4,484 RUB mln
Volume effect(1,641) RUB mln
Price effect(5,382) RUB mln
35
Pobeda Financial Results
Increasing PAX Traffic RASK dynamics
Increasing ASK CASK dynamics
1.89 1.94
Q1 2017 Q1 2018
1.0
1.4
Q1 2017 Q1 2018
Million passengers RUB
Growing Revenues of LCC Segment
1.7
2.6
Q1 2017 Q1 2018
2.28 2.28
Q1 2017 Q1 2018
PAX up by 42.2% in Q1 2018 RASK up by 2.7% in Q1 2018
ASK up by 50.9% in Q1 2018 CASK down by 0.3% in Q1 2018
RUB mln Q1 2017 Q1 2018Change
(Q1 18/17)
Revenue 3,277 5,079 55.0%
EBITDAR1 137 233 69.7%
EBITDAR margin 4.2% 4.6% 0.4 p.p.
EBITDA (685) (882) 28.8%
Net loss (474) (736) 55.1%
Note: based on managerial accounts transformed under IFRS standards1 Calculation based on Total Revenue of the Company
• Pobeda has demonstrated solid results backed by strong demand, active expansion of the fleet and
efficient cost management which allowed LCC to secure flattish CASK while growing RASK in Q1 2018.
Billion ASK RUB
1
36
1. Market Update
2. Aeroflot Group Overview
3. Aeroflot Group Operating Performance
4. Network and Schedule Overview
5. Fleet Overview
6. Financial Performance
7. Capital Structure and Liquidity
8. Appendix
37
RUB mln 31-Dec-2017 31-Mar-2018 Change
Borrowings 3,181 3,530 11.0%
Finance Lease Liabilities 100,689 88,257 (12.3)%
Pension Liabilities 922 931 1.0%
Total Debt 104,792 92,718 (11.5)%
Cash and Short Term
Investments54,909 63,248 15.2%
Net Debt 49,883 29,470 (40.9)%
Leverage and Liquidity
• Net Debt decreased by 40.6% mainly due to decrease in finance lease obligations as well as accelerated growth in
cash position.
• Cash position of RUB 63.1 billion and undrawn credit lines of RUB 99 billion
1 31-Dec-2017 exchange rate - 57.60 RUB per USD , 31-Mar-2018 exchange rate - 57.26 RUB per USD 3 Not including interest; future payments in dollars converted into roubles at exchange rate of 57.26 RUB per USD2 Net debt does not include capitalised operating lease expenses; based on annualized EBITDA 4 From 01-Jan-2018 interest on bank deposits is included in Cash and Short Term Investments (175.6 million RUB
as at 31-Mar-2018)
Debt Profile1 Net Debt / LTM EBITDA2
Debt breakdown by currency Finance Lease Repayment Schedule (RUB billion)3
Borrowings Finance Lease
30-Jun-2017 30-Sep-2017 31-Dec-2017 31-Mar-2018
42,618 48,925 49,883 29,470
63,373 54,147 56,015 49,420
RUB mln
Net Debt 2
EBITDA 2
1.1
0.7
0.9 0.9
0.6
31-Mar-2017 30-Jun-2017 30-Sep-2017 31-Dec-2017 31-Mar-2018
11.0 13.0 12.8 12.9
38.6
2018 2019 2020 2021 2022+89%
11%
RUB USD
2%
98%
4
38
19,371
24,318
786
(13,727)
3,458
1,717 (836)
5,146 (4,242)
14,533
10,291
(1,824)
4,953
6,178 (1,013)
Profit BeforeIncome Tax
D&A InterestExpense
UnrealizedNet FX Gain
Other Adj.Before
WorkingCapital
Changes
Cash FlowsFrom
OperatingActivitiesBefore
WorkingCapital
Changes
WorkingCapital
Changesand Income
Tax
Net CashFlows FromOperatingActivities
CapitalExpenditures
ProceedsFrom Sale of
PPE
DepositPlacementand Return
Net Pre-delivery
Payments forAircraft
Net LeasingDeposits for
a/c inOperatingLease and
Other
Free CashFlow Q1
2018
Free CashFlow Q1
2017
Operating and Free Cash Flows
• Strong Operating and Free Cash Flow generation in Q1 2018 on the back of growing business volumes and solid
operating performance despite lowest quarter of the year.
(RUB mln)
Billion RUB Q1 2018
Other adjustments before working capital changes, incl. 5.1
Change in provisions1 3.5
Effect from revenue hedging (finance lease hedge accounting) 1.3
Loss on fixed assets disposal 0.3
Other 0.1
(20.3)%
1 Change in provisions line mainly consists of provision for regular repairs and maintenance
Billion RUB Q1 2018
Working capital changes and income tax, incl. 14.5
Change in accounts receivable and prepayments (6.6)
Change in accounts payable and accrued liabilities 21.2
Change in tax and restricted cash (0.1)
39
1. Market Update
2. Aeroflot Group Overview
3. Aeroflot Group Operating Performance
4. Network and Schedule Overview
5. Fleet Overview
6. Financial Performance
7. Capital Structure and Liquidity
8. Appendix
40
Key Operating Data of Subsidiary Airlines
Indicator UnitRossiya Airline Pobeda Airline Aurora Airline
Q1 2018 Y-o-Y Q1 2018 Y-o-Y Q1 2018 Y-o-Y
Passenger Traffic th PAX 1,862 (6.7)% 1,402 42.2% 327 7.8%
International Routes th PAX 611 10.5% 298 53.5% 80 2.7%
Domestic Routes th PAX 1,252 (13.3)% 1,104 39.4% 247 9.5%
Passenger Turnover mln pkm 4,856 0.3% 2,442 53.4% 470 6.5%
International Routes mln pkm 2,508 11.3% 620 54.7% 115 (0.9)%
Domestic Routes mln pkm 2,349 (9.2)% 1,822 52.9% 354 9.1%
Passenger Capacity mln ASK 5,909 (6.2)% 2,622 50.9% 674 1.1%
International Routes mln ASK 2,759 10.4% 665 44.5% 168 2.6%
Domestic Routes mln ASK 3,150 (17.1)% 1,956 53.2% 507 0.6%
Passenger Load Factor % 82.2% 5.3 p.p. 93.1% 1.5 p.p. 69.7% 3.5 p.p.
International Routes % 90.9% 0.7 p.p. 93.2% 6.2 p.p. 68.8% (2.4) p.p.
Domestic Routes % 74.6% 6.5 p.p. 93.1% (0.2) p.p. 70.0% 5.5 p.p.
Flight Hours hours 38,846 (5.3)% 18,738 49.2% 9,792 4.8%
41
3.05
3.493.31
3.09
3.67
3.43
Domestic International Total
2.30
2.72
2.552.44
2.80
2.65
Domestic International Total
3.20
3.523.403.35
3.723.58
Domestic International Total
2.36
2.73
2.592.56
2.812.72
Domestic International Total
Q1 RASK ex. Pobeda (PAX Revenue / ASK)Q1 Yield ex. Pobeda (PAX Revenue / RPK)
Aeroflot Group Scheduled Flights Revenue Units
• RUB dynamics and changing mix of operations at subsidiaries’ level affected RUB yields in Q1 2018.
Note: Data presented based on management accounting figures, scheduled flights revenue is used for calculations.
RUB
% Y-o-Y increase
RUB
2017 2018
Q1 Yield (PAX Revenue / RPK)
RUB
Q1 RASK (PAX Revenue / ASK)
RUB
1.6%
3.6%
6.0%
4.3%
5.1%3.1%
4.6%
5.2%
8.7%
5.2%
5.5%3.0%
42
Q1 RASK (Scheduled + Charter PAX Revenue / ASK)Q1 Yield (Scheduled + Charter PAX Revenue / RPK)
Aeroflot Group Flights Revenue Units
• RUB dynamics and changing mix of operations at subsidiaries’ level affected RUB yields in Q1 2018.
Note: Data presented based on management accounting figures, scheduled and charter flights revenue is used for calculations
RUB
% Y-o-Y increase
RUB
2017 2018
Q1 Yield (Scheduled PAX Revenue / RPK)
RUB
Q1 RASK (Scheduled PAX Revenue / ASK)
RUB
3.05
3.493.31
3.09
3.67
3.43
Domestic International Total
2.30
2.72
2.552.44
2.80
2.65
Domestic International Total
3.05
3.363.24
3.11
3.543.37
Domestic International Total
2.1%4.1%
5.3%
2.32
2.662.53
2.46
2.762.65
Domestic International Total
6.1%
4.7%
3.7%
1.6%
3.6%
6.0%
4.3%
5.1%3.1%
43
140 150 165189
224 232
5.2
4.14.4 4.2 4.1 4,0
2013 2014 2015 2016 2017 3/31/2018
Aircraft Average Age
232 251 247289
325 336
7.77.0
6.4 6.5 6.2 6,1
2013 2014 2015 2016 2017 3/31/2018
Aircraft Average Age
• Aeroflot operates the youngest fleet in the industry among airlines with active fleet of 100+ aircraft
• Aeroflot achieved significant progress in fleet renewal both for Aeroflot airline and for the Group
Aeroflot Group Fleet in Operation 1
Aeroflot Airline Fleet in Operation 1
Average Age of the Fleet 2
1 Excludes planes out of operation 2 Average Fleet Age of Selected Airlines with Active Fleet of 100+ Aircraft according to FlightGlobal data (as of March 2018) excluding planes out of operation
Aeroflot Group Fleet Evolution
4.0
4.9
4.9
5.3
5.3
5.5
5.5
5.5
5.6
5.7
5.8
5.9
6.1
6.1
6.2
6.5
6.5
7.5
9.6
10.3
10.4
11.4
12.9
13.5
13.7
14.5
16.7
Hainan Airlines
Shandong Airlines
Spirit Airlines
Xiamen Airlines
Azul
China Eastern Airlines
Sichuan Airlines
Emirates Airline
Lion Air
Garuda Indonesia
Saudia
Etihad Airways
IndiGo
Qatar Airways
Air China
Shenzhen Airlines
Singapore Airlines
Japan Airlines
American Airlines
Qantas
Lufthansa
Air France
Jazz
British Airways
United Airlines
Delta Air Lines
44
Region Q1 2017 Q1 2018 Y-o-YQ1 2018, % of
sch. revenue
Russia 30,562 33,959 11.1% 37.3%
Europe 22,362 25,352 13.4% 27.8%
Asia 16,087 17,465 8.6% 19.2%
CIS 4,058 4,464 10.0% 4.9%
North and Central
America4,997 5,165 3.4% 5.7%
Middle East 4,269 4,702 10.1% 5.2%
Total 82,336 91,107 10.7% 100.0%
Traffic Revenue Analysis
1 Data presented based on management accounting2 Data presented based on management accounting for Aeroflot airline and routes of subsidiary airlines under commercial management of Aeroflot
Q1 2018
Q1 20182
Traffic Revenue Breakdown by Type
Scheduled Traffic Revenue by POS
Revenue from Scheduled Passengers (RUB mln)1
• In Q1 2018 revenue from scheduled passengers grew by 10.7% mainly driven by revenue growth on Russian,
European and Asian markets.
Total Passenger Revenue (Scheduled + Charter, RUB mln)
Segment Q1 2017 Q1 2018 Y-o-YQ1 2018, % of
revenue
Domestic 31,715 34,779 9.7% 35.9%
International 55,489 62,117 11.9% 64.1%
Total 87,205 96,896 11.1% 100.0%
Sheduled Passenger Flights
90.5%
Charter Passenger Flights 5.8%
Cargo 3.8%
Sales abroad30.3%
Online33.8%
Call center and ow n branches
3.3%
Sales in Russia32.6%
45
Reported and Adjusted Net Loss Analysis
• One-off effects had limited influence on Aeroflot Group Q1 2018 financial results.
Q1 Adjusted Net Loss Build-Up (RUB mln)
(11,543) (11,605)
1,052 (251)(863)
Reported Net Loss Q1 2018 Discounting of receipt of leasedeposits
Change in the fair value ofinvestments in equity
securities
FOREX on PDP Adjusted Net Loss Q1 2018
46
(5,339)
(11,543)
10,091 (1,274)
(15,476)
(253) (732)98 272
1,061 9
Reported NetLoss Q1 2017
Traffic Revenue Other Revenue OperatingExpenses
Finance Income Finance Costs Hedging Result Revaluation ofEquity
Investments andother
Taxation Other Reported NetLoss Q1 2018
Net Income Evolution
(RUB mln)
• Increase in revenue generated by growing volumes was offset by a less favorable cost environment
which resulted in adjustment of the bottom line.
Pressure from
higher fuel prices,
staff costs and
operating lease
expenses in Q1
2018.
47
Statement of Comprehensive Income
RUB mln, unless otherwise stated 2013 2014 2015 2016 2017 Q1 2017 Q1 2018
Traffic revenue 257,546 277,354 359,205 433,966 474,916 90,583 100,674
Other revenue 33,410 42,417 55,968 61,914 58,018 12,542 11,268
Revenue 290,956 319,771 415,173 495,880 532,934 103,125 111,942
Operating costs (271,161) (308,503) (371,066) (432,626) (492,523) (108,061) (123,538)
Operating profit / (loss) 19,795 11,268 44,107 63,254 40,411 (4,936) (11,596)
Sale and impairment of investments, net - - (9,159) (2,935) (144) (57) 215
Finance income 2,686 2,471 15,811 19,802 7,127 1,971 1,718
Finance costs (8,814) (28,399) (28,556) (9,443) (8,225) (2,038) (2,769)
Hedging result - (1,723) (23,746) (12,310) (5,613) (1,391) (1,293)
Share of results of associates 37 31 (17) 12 170 (11) (2)
Result from disposal of subsidiaries - - - (5,099) - - -
Profit / (loss) before income tax 13,704 (16,352) (1,560) 53,281 33,726 (6,462) (13,727)
Income tax (6,369) (794) (4,934) (14,455) (10,666) 1,123 2,184
Profit / (loss) for the period 7,335 (17,146) (6,494) 38,826 23,060 (5,339) (11,543)
EBITDAR 51,026 48,673 103,118 137,567 121,808 (13,742) 10,767
EBITDA 31,849 24,839 58,703 78,004 56,015 (1,136) (7,732)
Traffic revenue growth 16.4% 7.7% 29.5% 20.8% 9.4% - 8,5%
Revenue growth 15.0% 9.9% 29.8% 19.4% 7.5% - 11,1%
Operating profit margin 6.8% 3.5% 10.6% 12.8% 7.6% - -
EBITDAR margin 17.5% 15.2% 24.8% 27.7% 22.9% - -
EBITDA margin 10.9% 7.8% 14.1% 15.7% 10.5% - -
48
Assets (RUB mln) 31.12.2013 31.12.2014 31.12.2015 31.12.2016 31.12.2017 31.03.2018
Cash and cash equivalents 18,660 26,547 30,693 31,476 45,978 59,105
Short-term financial investments 272 961 5,917 6,319 8,931 4,143
Accounts receivable and prepayments 55,691 56,769 76,317 78,172 92,932 96,220
Expendable spare parts and inventories 4,927 6,516 7,447 10,040 12,811 12,806
Property, plant and equipment 88,777 116,044 104,494 104,897 97,932 87,959
Prepayments for aircraft 12,318 29,241 35,291 27,830 13,089 9,679
Deferred tax assets 2,174 18,540 21,632 12,252 10,396 11,374
Goodwill 6,660 6,660 6,660 6,660 6,660 6,660
Other assets 19,705 16,440 26,743 21,661 34,601 47,419
Total Assets 209,184 277,718 315,194 299,307 323,330 335,365
Liabilities (RUB mln)
Accounts payable and accrued liabilities 36,249 48,952 54,751 49,868 67,953 71,323
Unearned traffic revenue 16,334 22,469 28,691 39,044 43,695 65,473
Short-term loans and borrowings 5,029 17,343 54,085 9,309 - 175
Long-term loans and borrowings 8,377 6,860 14,375 11,058 3,181 3,355
Finance lease liabilities 63,348 132,366 145,020 107,143 84,674 73,923
Provisions for liabilities 1,655 4,845 6,917 10,791 16,949 19,503
Other liabilities 23,712 58,388 47,475 31,325 39,579 43,245
Total Liabilities 154,704 291,223 351,314 258,538 256,031 276,997
Hedge reserve (383) (48,657) (64,720) (34,187) (25,159) (23,650)
Retained earnings 61,122 45,584 39,755 77,198 81,476 71,393
Total Equity 54,480 (13,505) (36,120) 40,769 67,299 58,368
Total Liabilities and Equity 209,184 277,718 315,194 299,307 323,330 335,365
Condensed Statement of Financial Position
49
Statement of Cash Flows
RUB mln, unless otherwise stated 2013 2014 2015 2016 2017 Q1 2017 Q1 2018
Operating cash flows before working capital changes 32,944 31,603 64,269 81,994 65,330 215 (4,242)
Change in accounts receivable and prepayments (3,014) 4,658 (2,251) (6,191) (27,816) (5,359) (6,556)
Change in expendable spare parts and inventories (1,019) (1,831) (1,216) (2,809) (2,672) (321) 7
Change in accounts payable and accrued liabilities 4,345 8,452 14,705 13,387 24,964 26,763 21,162
Operating cash flows after working capital changes 33,256 42,882 75,507 86,381 59,806 21,298 10,371
Income tax paid (4,260) (6,863) (6,041) (13,943) (13,019) (514) (102)
Net cash flows from operating activities 28,945 35,977 69,664 73,647 47,432 20,798 10,291
Cash flows from investing activities:
Purchases of PPE and intangible assets (4,410) (6,160) (9,196) (10,222) (7,681) (961) (1,824)
Prepayments for aircraft (7,154) (21,361) (22,708) (18,806) (7,931) (85) (1,883)
Return of prepayments for aircraft 7,783 9,620 7,828 29,362 26,274 - 8,061
Net cash flows from/(used in) investing activities (3,599) (18,492) (38,770) 10,331 14,369 3,520 9,080
Cash flows from financing activities:
Repayment of loans and borrowings (14,579) (9,870) (36,267) (72,991) (17,417) (1,573) -
Repayment of finance lease principal (9,795) (15,629) (19,455) (27,024) (15,513) (1,995) (5,356)
Net cash used in financing activities (21,782) (14,673) (28,075) 80,495 46,821 (4,607) (6,142)
Net increase in cash and cash equivalents 3,590 7,887 4,146 783 14,502 19,283 13,127
Cash and cash equivalents at the end of the period 18,660 26,547 30,693 31,476 45,978 50,759 59,105
50
Board of Directors
Executive Board
Personnel and Remuneration
Committee
(6 members)
General Meeting of Shareholders
Board of Directors
Audit Committee
(4 members)
Strategy Committee
(10 members)
Corporate Governance
NameAudit
Committee
Personnel and
Remuneration
Committee
Strategy
Committee
Mikhail Poluboyarinov Chairman of the Board of Directors
Vitaly Saveliev
Lars Erik Anders
BergstromMember Member
Sergey Chemezov
Alexey Germanovich Member Chairman Member
Igor Kamenskoy Member Member Chairman
Dmitry Peskov Member Member
Dmitry Saprykin Member
Vasily Sidorov Chairman Member Member
Yuri Slyusar Member
Mikhail Voevodin Member Member
Board of Directors
The Board of Directors is currently composed of 11
members. The Board’s composition is well balanced
from members’ background perspective, number of
independent, non-executive and executive directors
Incorporated in Russia, PJSC Aeroflot is subject to
Russian corporate governance regulations and follows
Russian Corporate Governance Code
Independent director according to the Russian Corporate Governance Code
51
Aeroflot Group Structure
Airlines Ancillary Companies
PJSC Aeroflot(1)
JSC Rossiya Airlines 75%-1 sh.
LLC Pobeda Airlines 100%
JSC Orenair (2) 100%
JSC Donavia (2) 100%
JSC Aurora Airlines 51%
CJSC Aeromar
In-flight catering51%
LLC Aeroflot-Finance
Financial services100%
JSC Sherotel
Hotel services100%
Aeroflot Aviation School
Education services100%
Notes:
(1) The Group as of March 31, 2018; Aeroflot Group consolidates all entities: PJSC Aeroflot and all subsidiaries.
(2) Non-operating entities
• Over the past years the Group structure was refined with a focus on aviation assets and disposal of non-core assets, which is
in compliance with the Group's strategy to streamline the core business
• PJSC Aeroflot also owns 45.0% of JSC AeroMASh-AB (Aviation security), 2.43% of JSC Sheremetyevo International Airport
(base airport), 3.85% of PJSC Transport Clearing House (mutual settlements between agencies and airlines) and 49.0% of LLC
Transnautic Aero (cargo sales, in liquidation)
A-Technics
Maintenance 100%
52
Address: 119002, Russia, Moscow, Arbat St. 10
E-mail: [email protected]
Website: www.aeroflot.ru
Investor Relations Contacts