Air France-KLM SA (AFRAF) Q4 2024 Earnings Call Transcript

2025-03-06 17:21:04 ET

Air France-KLM SA (AFRAF)

Q4 2024 Results Conference Call

March 06, 2025 03:00 AM ET

Company Participants

Ben Smith - CEO

Steven Zaat - CFO

Marjan Rintel - CEO of KLM

Conference Call Participants

Jarrod Castle - UBS

Alex Irving - Bernstein

James Hollins - BNP Paribas Exane

Harry Gowers - JPMorgan

Ruxandra Haradau-Doser - HSBC

Stephen Furlong - Davy

Presentation

Ben Smith

Good morning, everyone, and thank you for joining us today for the presentation of Air France-KLM's results for the fourth quarter of 2024. Today, I'm joined by Steven Zaat, Group CFO; Anne Rigail, CEO of Air France; and Marjan Rintel, CEO of KLM.

I'll start with key highlights from this quarter, followed by Steven, who will walk you through our financial performance and outlook for the year 2024, and then, we'll wrap it up with closing remarks on our medium-term ambitions before opening the floor for your questions.

Moving first to Slide 4. Okay. Reviewing our key financial indicators for this quarter. The group revenue increased by 6% compared to last year with capacity up 2%. Unit revenue growth accelerated in Q4, plus 4.4% compared to plus 1.4% in Q3, which is adjusted for the impact of the Olympic Games.

The opening result stood at €0.4 billion, a significant improvement from last year's loss. This marks the strongest fourth quarter on record driven by solid unit revenue growth that outpaced unit cost increases as well as lower fuel prices.

The strong year-end performance helped offset earlier headwinds, resulting in a year operating margin of 5.1%. Despite a challenging operational environment, the group generated €300 million in adjusted recurring free cash flow, in line with the ambition set out during the 2023 Capital Market Day.

The net debt-to-EBITDA ratio stood at 1.7x at the end of the fiscal year, well within our target range of 1.5x to 2.0x. We made progress on our fleet modernization strategy with new generation aircraft now accounting for 27% of the fleet as of December, an increase of 7 points since the end of 2023.

Now let's take a moment to highlight some of the major achievements we've accomplished together over the last years. Moving on to Slide 5. We're very proud to highlight the significant progress our airlines have made in advancing key strategic priorities this year. We launched a new fully private Air France La Première ground experience at Roissy-CDG Airport, elevating luxury travel with Air France to an entirely new level....

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