Air Berlin PLC 29 May 2013 Commerzbank Roadshow Hamburg
airberlin a strong European carrier Market position as of 31 December 2012 No. 2 in core market: Germany / Austria / Switzerland < No. 7 in Europe with 33.3 m guests in 2012 Network carrier focused on business & leisure travelers Group revenue of EUR 4.31 billion Positive operating result (EBIT) of EUR 70.2 million improvement of more than EUR 300 million over the previous year Net profit of EUR 6.8 million 2
Management Board Air Berlin PLC Wolfgang Prock-Schauer Chief Executive Officer (CEO) Paul Gregorowitsch Chief Commercial Officer (CCO) Ulf Hüttmeyer Chief Financial Officer (CFO) Helmut Himmelreich Chief Operating Officer (COO) Dr. Martina Niemann Chief Human Resources Officer (CHO) 3
Board of Directors Air Berlin PLC Dr Hans-Joachim Körber Chairman Board of Directors, Chairman Nominations Committee, Member Remuneration Committee, Finance Committee James Hogan CEO Etihad Airways, Vice Chairman Board of Directors, Member Nominations Committee Wolfgang Prock- Schauer Chief Executive Officer (CEO) Joachim Hunold Former CEO Air Berlin PLC, Member Board of Directors Austin Reid Member Board of Directors of Air Berlin PLC since 3 January 2013, Member Audit Committee James Rigney CFO Etihad Airways, Member Board of Directors, Member Finance Committee Ali Sabanci Member Board of ESAS Holding and Chairman Pegasus Airlines, Member Board of Directors, Finance Committee Heinz-Peter Schlüter Chairman Supervisory Board of Trimet Aluminium AG, Essen, Member Board of Directors, Chairman Audit and Remuneration Committee, Member Nominations Committee Nicholas Teller CEO E.R. Capital Holding GmbH & Cie. KG, Hamburg, Member Board of Directors, Chairman Finance Committee, Member Audit, Nominations and Remuneration Committee Johannes Zurnieden Managing Director Phoenix Reisen GmbH, Bonn, Former Chairman Board of Directors, Member Board of Directors, Nomination and Remuneration Committee 4
airberlin route network from Hamburg in summer 2013 + 27 connections via Dusseldorf Los Angeles Tenerife Gran Canaria New York Fort Myers Miami Varadero Cancun Puerto Plato Punta Cana Ponta Delgada Funchal Curacao Faro Malaga Lanzarote Fuerteventura Hamburg Direct destinations Connections via Dusseldorf Moscow London Dusseldorf Guernsey Jersey Nuremberg Stuttgart Vienna Munich Zurich Salzburg Milan Venice Nice Florence Alicante Rome Thessaloniki Palma Olbia Lamezia Terme Lesbos Cagliari Ibiza Corfu Samos Catania Kos Karpathos Heraklion Adana Antalya Hurghada Tel Aviv Abu Dhabi fourth-largest airberlin airport in Germany more than 3.1 Mio. guests in 2012 no. 2 in Hamburg 6 based aircraft 26 direct destinations 23% market share almost 300 employees in Hamburg *passenger share in Dusseldorf in 2012 **weeklyab-ab Connections <=180 Min. transfer time in S13 5
airberlin s lounge concept Hamburg 6
Key performance indicators FY 2012 Operational development 2012 vs. 2011 35.30-5.5% Guests [m] Capacity [m] Number of flights [#] 33.35 Guests [m] Due to capacity reductions, number of guests declined 45.14-7.4% 41.79 Capacity [m] Cancellation of unprofitable routes, hence number of offered seats reduced -7.4% 270,498 250,406 Flights Network adjustments result in fewer number of total flights 78.2 Seat load factor [%] +1.6%p. 79.8 Guests/capacity [%] Seat load factor improves in line with capacity adjustments 111.4 +7.7% Yield [EUR] Yield [EUR] 120.1 Due to cancellation of unprofitable routes and measures to increase yield, topline quality improved based on IFRS flight revenue including a/p tax revenue 62.16-2.8% ASK 60.40 ASK [bn] Due to route adjustments available seat kilometer declined by -2.8% 2011 2012 7
Financial Performance FY 2012 Revenue EBITDAR EBIT Net result Despite a reduction of capacity, an increase in revenue is achieved from a slightly higher seat load factor and an increase in yield [EUR m] Revenue growth, volume related cost reductions and "topbonus" transaction helped to improve EBITDAR significantly Improvement in EBIT is following EBITDAR development Followed by a better financial result, the company returned to net profit and improved by more than EUR 270 m (before adjustment of deferred taxes in 2011) +2% 4,227.3 4,311.7 +73% 425.9 736.4 +128% 70.2 6.8 2011 2012-247.0-420.4 8
Financial Performance [EURm] Q1 2013 compared to Q1 2012 Revenue EBIT Net result Despite 11% decline in available seat kilometers, revenue only declined by 3% due to better yield and load performance 812.9-3% 791.9 EBIT in Q1 2013 was EUR 188.4m after EUR 149.3m Taking into account the non-recurring effects from asset sales in Q1 2012, EBIT would have been EUR 173.1m Taking into account non-recurring effects in Q1 2013, turnaround charges and other extraordinary items such as the strike of security personnel at several airports, EBIT in Q1 2013 was 171.2m Thus, adjusted EBIT came in on previous year s level Due to weaker non-cash financial result, net result is weaker than previous year -20% -149.3-188.4-173.1-171.2-163.6-196.3 Q1/12 Q1/13 ACTUAL excl. other operating income & turnaround charges 9
Balance sheet structure [EUR m] B/S as of Dec 31, 2012 B/S as of Mar 31, 2013 2,218 2,473 6% Equity Fixed assets 53% Fixed assets 48% Other current assets 32% 94% Debt Other current assets 33% 102% Debt Liquid assets 15% Liquid assets 19% -2% Equity Net debt: 770 Net debt: 728 10
Dollar hedging Hedging profile [%] FX rate development [USD/EUR] 1) 100 90 80 70 60 50 100 99 75 55 1.40 1.38 1.36 1.34 1.32 1.30 1.28 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1.26 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Hedging rate 2013 (as of 07 May 2013) Hedging rate 2012 (as of 11 May 2012) Current hedge rate Market / Forward rate Hedge rate 2012 1) as of 07 May 2013 / 11 May 2012 11
Fuel hedging Hedging profile [%] Price development [USD/t] 1) 82 94 79 76 100 1,100 95 90 85 1,050 80 75 1,000 70 65 60 950 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 550 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Hedging rate 2013 (as of 07 May 2013) Hedging rate 2012 (as of 11 May 2012) Current hedge price Market / Forward price Hedge price 2012 1) as of 07 May 2013 / 11 May 2012; excl. differentials 12
airberlin well positioned in core market Europe 150 destinations in 40 countries (incl. codeshare partners: 260 destinations) Second largest airline in DACH region and seventh largest in Europe >80% of passengers in short / medium haul segment Well-known European brand Network carrier that serves business and leisure guests Leveraging global connectivity through Etihad Airways and oneworld Destinations Codeshare destinations 13
Optionality and network breadth is further extended by code sharing with numerous airlines airberlin codeshares with 14 codeshare partners Etihad Airways is No.1 airline partner of airberlin More than 300,000 guests on codeshare routes in 2012 New codeshare agreement with EY partner Air Seychelles Virgin Australia: Codesharing planned for 2013 * End of March airberlin will celebrate 1-year partnership in oneworld alliance Codeshare agreements with seven oneworld partners More than 100 codeshare destinations with oneworld partners Other partners Codesharing with five non-aligned carriers Extension of the airberlin network *Planned to be implemented in 2013 14
Strategic partnership with Etihad Airways continues to grow impressively the development promises to significantly exceed 2012 Codeshare performance Etihad Airways Common Guests development 2012 Q1 2013 [ 000] Etihad Airways is codeshare partner No.1 for airberlin Portfolio of nearly 100 codeshare routes 323.2 Further extensions intended, implementation upon approval of traffic rights 279.9 240.8 198.2 Utilization of growing opportunities resulting from hub improvement (i.e. Vietnam) 141.2 162.4 114.9 Adding codeshare agreements with more Etihad Airways partner airlines in 2013 (i.e. Virgin Australia, JAT) 90.3 47.0 13.4 0.2 2.2 52.2 33.4 74.5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 2013 15
oneworld presents further opportunities for growth by providing airberlin with access to new destinations and additional passengers Codeshare performance oneworld Common Guests development 2012 Q1 2013 [ 000] More than 300,000 guests on joint codeshare routes in 2012 Extended codeshare network with oneworld partners cause strong increase of booking intakes demand exceeded 100,000 already in first quarter Alliance of service-orientated quality airlines Highest quality and safety standards News: American Airlines Expansion of cooperation, now including AA s hub in Chicago Planned merger with US Airways prospectively increases the route portfolio 59.5 34.4 31.6 16.3 Jan Feb 2012 310.1 279.6 253.6 222.7 189.5 157.8 126.9 103.1 98.2 74.6 56.1 Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2013 16
Fleet development Number of aircraft Total number of aircraft 165 69-16 -6 149 143-9.7% 65 61 14 13 14 A320 family A330 family 10 65 7 10 54 7 10 51 7 B737 family E190 Q400 Q1/12 Q1/13 2013e 17
Stakeholder negotiations Lean & smart What we are doing to fix our core business Turbine combines internal structural changes and negotiations with major stakeholders 1 Internal: highly efficient organisation & processes External: highly regarded by customer LEAN a Network & Fleet SMART Optimise operations Efficient structures and workflows Cost reduction b c Commercial Product / Service Focus on key markets Touristic and business segments Customer needs Brand values d Operation 2 Bring major stakeholder relationships in line with market best practice Airport & ground handling Labour and overhead Wet lease providers Lessors & OEMs TOP & distributors Maintenance suppliers 18
Turbine: Timeline for achieving financial targets Cumulative benefit 2013/14 (Illustrative) Target ~ EUR 400m >EUR 200m 2013 Q1 Q2 Q3 Q4 2014 Q1 Q2 Q3 Effects of >EUR 200m on EBIT level targeted in 2013 Majority of effects in 2013 ramp up from Q3 onwards Program will deliver ~EUR 400m on EBIT level compared to 2012 Realisation of network effects full on track Q1/Q2 with over proportional fix costs, i.e. aircraft, aircraft redeliveries, personnel etc. 19
Guidance for 2013 Operational performance Capacity Increase in long haul Decrease in short and medium haul Capacity utilization and income Increasing load factor through network reduction, improved sales platform and partnerships Result Revenue Growth in revenue through yield and load factor expected despite capacity reduction Expenses Cost per ASK excl. fuel will decrease in the course of the year Structural cost increases will be offset through Turbine Result Operational profitability Balance sheet A L Balance sheet Liquidity improved through the issued convertible bond and good booking intakes Equity ratio target of 15-20% by mid term Deleveraging is the key objective for 2013; initiatives are on the way Net debt target remains to be around EUR 500 m by the end of 2013 Target: operational profitability 20
Air Berlin PLC: Shareholder structure Shareholder structure by voting rights Shareholder structure by nationality Shareholder structure by EU / and Non EU shareholders Etihad Airways 29.21 % ESAS Holding A.S. 12.02 % Hans-Joachim Knieps 5.48 % Free float according to the standards of the Deutsche Börse 53.29 % Germany 54.67 % United Arab Emirates 29.21 % Turkey 12.02 % USA 0.90 % United Kingdom 0.78 % Luxembourg 0.53 % EU shareholders 56.91 % Non EU shareholders 43.09 % Other EU Member States / EEA 1.36 % Other 0.53 % 21