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Full Year F15 Results May 27, 2015
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József Váradi
Chief Executive Officer
INTRODUCTION
2
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BUSINESS HIGHLIGHTS FOR F15
Record profitability and margin expansion in F15
18% passenger growth to 16.5m passengers
Excellent operational performance
Increasing our cost advantage
Building on our strong market leadership in CEE
Continued focus on customer experience
IPO raising 150m
3
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UPDATE SINCE THE IPO
Fleet increased to 59 aircraft
Continued network growth and diversification
Further rationalization in Ukraine
Fresh new brand for the next decade
Introduction of fully allocated seating
Launched pilot academies
4
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FINANCIAL PERFORMANCE
Mike Powell
Chief Financial Officer
5
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FINANCIAL HIGHLIGHTS
6
2015 2014 Change
Revenue ( m) 1,227 1,012 + 21%
Net profit for the year ( m), (IFRS) 183 88 + 109%
Underlying net profit after tax* ( m) 146 87 + 67%
CASK* ( cents) 3.61 3.72 - 3.0%
RASK ( cents) 4.19 4.15 + 1.1%
Ancillary revenue per pax ( ) 26.3 25.4 + 3.7%
Load Factor (%) 86.7 85.7 + 1 ppt
Free cash ( m) 449 186 + 263m
Shareholders funds ( m) 460 160 + 300m
Source: Company Information * Excluding exceptional items
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7
RASK ( cent) RPKs ( bn ) Load Factor
EBITDAR ( m) & Margin* Net Income ( m) & Margin*
Source: Company information. * Excluding exceptional items
ASKs (bn)
CASK ( cent)* Revenues ( m)
+21% +41% (3.0%)
RECORD PROFIT AND MARGIN EXPANSION
+67%
3.72 3.61
87
146
241
341 1,227
1,012
27.8%
23.9%
11.9%
8.6%
+21% +20% +1 ppt +1.1%
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STRONG REVENUE GROWTH
Revenue Development
Revenue Bridge
Innovative revenue generation driven by:
F15 passenger volumes +18%
Ticket revenue per pax 48.2 (+1.8%)
Ancillary revenue per pax 26.3 (+3.7%)
Total revenue per pax 74.5 (+2.5%)
Average stage length +2.6%
m
8
340
424 552
577 659
794
119
165
214
274
353
433
459
589
766
851
1,012
2 5 .9% 2 8 .1% 2 7 .9%
3 2 .2%
3 4 .9% 3 5 .3%
F10 F11 F12 F13 F14 F15
Ticket Ancillary Ancillary as % of Revenue
1,227
m
Source: Company Information
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CEE
12.3%
11.5%
7.7%
3.8%
3.0%
2.3%
1.5%
1.3%
1.1%
1.0%
0.8%
2.7%
49%
Western Europe
16.3%
9.6%
5.3%
4.7%
3.8%
3.4%
2.8%
1.7%
1.7%
1.8%
51%
DIVERSE REVENUE MIX
Revenue Split by Point of Sale F15
Source: Company Information. Note: Other includes Finland, Switzerland, Cyprus, Portugal and Greece for Western Europe and Slovenia, Bosnia & Hertz. Georg ia, Azerbaijan, Russian Federation, Turkey, Moldova, Egypt and Croatia for CEE.
Other (1)
Other (1)
UK
Italy
Spain
Germany
Sweden
Netherl.
France
Belgium
Poland
Romania
Hungary
Ukraine
Bulgaria
Lithuania
Czech R.
Serbia
Latvia
Norway
9
Macedonia
Israel
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Revenue Breakdown per Passenger ( )
+16 %
+81 %
+33 %
F10 F11 F12 F13 F14 F15
Ticket 41.5 43.0 49.1 46.8 47.3 48.2
Ancillary 14.5 16.8 19.0 22.2 25.4 26.3
Total 56.0 59.8 68.1 69.1 72.7 74.5
Load Factor and Volume Growth
ANCILLARY REVENUE GROWTH
10
19
Source: Company Information
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DISCIPLINED COST MANAGEMENT
CASK Bridge
Cost per ASK ( cent)
CASK reduction driven by:
Total CASK -3.0%
Fuel CASK -8.4%
CASK ex - fuel +0.5%
Fuel initiatives to support CASK reduction
Active airport mix management
Other cost categories broadly flat in unit terms
11
2.30 2.32
2.25 2.29 2.25 2.26
0.95 1.191.49
1.581.48 1.36
3.25
3.51
3.743.88
3.723.61
F10 F11 F12 F13 F14 F15
CASK ex-fuel Fuel
cent
CASK F14
CASK F15
Fuel Non -consumption
Fuel consumption
Airport, en -route costs
Ownership costs
Source: Company Information * Excluding exceptional items
CASK* and CASK* ex - fuel Development
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CASK KEY DRIVERS
12
2015 2014 %
change
Staff costs 0.28 0.28 (0.2%)
Fuel costs 1.36 1.48 (8.4%)
Distribution and marketing 0.06 0.07 (8.4%)
Maintenance, materials and repairs 0.21 0.20 6.6%
Aircraft rentals 0.47 0.46 1.6%
Airport, handling and en - route charges 1.02 1.03 (0.9%)
Depreciation and amortisation 0.12 0.10 11.1%
Other expenses 0.10 0.11 (4.8%)
3.61 3.72 (3.0%)
cent cent
Source: Company Information
Excluding exceptional items
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EBITDAR MARGIN OF 27.8%
EBITDAR* Growth
EBITDAR* Bridge
Strong EBITDAR improvement:
Volume growth
Rising unit revenues (RASK +1.1%)
Lower unit costs ( -3.0% total, +0.5% ex- fuel CASK)
m
13
105
146
158
241
341
F11 F12 F13 F14 F15
241
341
36 (14)
(47) (18)
215
EBITDARF14
(Inc.)in FuelCosts
(Inc.) inMaint.Costs
(Inc.) inAirport &En-Route
Costs
(Inc.) inOtherCosts
Increasein Revenue
EBITDARF15
(36)
m
28% 18% 24% 19% 19% Margin
Source: Company Information * Excluding exceptional items
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STRONG CASH FLOW
14
mill
ion
s
Source: Company Information
186 186
353 375
326 326
461 450 449
167
34 12
50
149
14 11
0
50
100
150
200
250
300
350
400
450
500
Opening FreeCash
OperatingProfit
Depreciation/
Amortisation
Net WorkingCapital
CAPEX Net IPOProceeds
Financialexpenses,incl. taxes
Others Closing FreeCash
( )
( )
( )
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SUMMARY BALANCE SHEET
Source: Company Information, 1.Current & Non -Current.
15
million
2015 2014
Property, plant and equipment 247 222
Restricted cash 1 74 42
Derivative financial instruments 1 61 0
Trade and other receivables 1 168 116
Cash and cash equivalents 449 186
Other assets 1 23 19
Total assets 1,021 585
Equity 460 160
Trade and other payables 124 121
Borrowings 1 4 20
Convertible debt 1 27 43
Deferred income 1 263 206
Derivative financial instruments 1 82 4
Provisions 1 52 28
Other liabilities 1 8 4
Total equity and liabilities 1,021 585
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LIQUIDITY AND LEVERAGE
Leverage*
17% 16%
18% 14% 11%
Cash as % of LTM Revenue
Cash and Cash Equivalents ( m)
18%
12%
36%
13%
16
Company information. *Leverage is defined as net debt adjusted to include capitalised operating lease obligations divided by earnings before interest tax depreciation, amortisation and aircraft rentals
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$821 $801
$676 $672
HEDGE PROGRAMME
US Dollar
69% 61% Hedge Coverage
Average capped rate Average floor rate
Sensitivities (before hedges) :
A $10 (per metric ton) movement price of jet fuel impacts F16 fuel bill by $6.3 million. A one cent movement in the Euro/US Dollar FX rate impacts F16 operating costs by 5.4 million.
17
Jet Fuel
Notes: 1. Fuel hedged capped rates excludes into plan premium and based on CIF NWE Jet fuel prices. 2. Average floor rates on ly apply to the proportion of fuel hedged with zero cost collars.
$1.30 $1.26
$1.16 $1.11
18% 51%
Zero cost collar instruments Fuel Caps
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Q4 FINANCIAL HIGHLIGHTS
18
( Q4 2015 Q4 2014 Change
Passenger ticket revenue 139,373 124,003 + 12%
Ancillary revenue 96,011 73,861 + 30%
Total revenue 235,384 197,864 + 19%
Fuel costs 83,214 82,003 + 1%
Other expenses 157,864 130,969 +21%
Total operating expenses 244,078 212,972 + 15 %
Operating Profit / (Loss) (5,694) (15,108)
Reported net profit 5,294 (20,784)
Underlying net profit (10,829) (23,466)
Source: Company Information
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IMPROVED WINTER PERFORMANCE
Disciplined capacity management
Benign competitive environment going into winter 2014/15
Modest positive Easter effect
Relatively mild winter 2014/15
Maturing winter ski/sun routes
H2 capacity growth 18%
F11 F12 F13 F14 F15
Drivers H2 Operating profit* development
Source: Company Information * excluding exceptionsl items
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OUTLOOK
2016 Financial Year Other Comments
Capacity growth (ASKs) 17 % H1: 18 %, H2: 16%.
Average stage length Unchanged
Load Factor Modest improvement
Fuel CASK -1.5% Assumes spot price of $625/MT
Ex-fuel CASK 1.0% Assumes $/1.10
Total CASK Unchanged
Revenue per ASK Down low single digit Pass through of lower fuel prices
Tax rate 6 %
Net profit 165-175million Excluding unusual or exceptional items
20
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BUSINESS REVIEW
József Váradi
Chief Executive Officer
21
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CEE A UNIQUE OPPORTUNITY FOR GROWTH
22
kUTASI
Large Addressable Market
Weak Legacy Carriers
GDP Growth Deregulation
Growing Propensity to Air
Travel
Growing LCC Market
Share
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COMPELLING GROWTH PROSPECTS
Higher LCC Penetration
Growing Propensity for Air Travel
+
2 0 %
3 5 %
0%
10%
20%
30%
40%
CEE Western Europe
LCC Penetration
0.4
1.6
0.0
0.5
1.0
1.5
CEE Western Europe
Total Seats / Population
Note: Western Europe defined as EU -15 plus Cyprus, Iceland, Malta, Norway and Switzerland. 1. Source: Innovata (departing seat capacity per country, April 2013 to March 2014 inclusive) and IMF (population data as of January 2015), Capstats. 2. Source: Innovata (departing seat per country, April 2013 to March
Kazakhstan, Lebanon and Tunisia based on the total population in those countries.
23
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STRONG ANTICIPATED ECONOMIC GROWTH
Source: IMF as of January 2015, EIU, Capstats. Note: CEE includes Poland, Hungary, Romania, Czech Republic, Bulgaria, Ukraine, Serbia, Macedonia, Croatia, Lithuania, Latvia , Estonia, Slovakia, Slovenia, Bosnia & Herzegovina, Russia, Moldova, Albania, Belarus, Montenegro and does not include Kosovo due to lack of data. 1. Middle Class defined as population with annual net income of more than US$ 25,000 as per EIU d ata , for CEE data only available for Bulgaria, Czech Republic, Hungary, Romania, Russia and Slovakia.
GDP Growth Middle Class Proportion (1)
GDP per Capita GDP per Capita Growth
CAGR 2014 -2017 2014, as % of Population
2014, in US$ CAGR 2014 -2017
24
(2017E)
7,536
(2017E)
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MARKET POSITION
LCC Market Number 1 Number 2 Number 3
Carrier Carrier Carrier
CEE
Ryanair
Easyjet
Poland Ryanair Norwegian
Romania Blue Air Ryanair
Hungary Ryanair Easyjet
Czech Republic Easyjet Wizz Air Ryanair
Lithuania Ryanair Wizz Air Norwegian
Bulgaria Wizz Air Easyjet Norwegian
Latvia Ryanair Wizz Air Norwegian
Ukraine Wizz Air Pegasus FlyDubai
Slovakia Ryanair Wizz Air Norwegian
Serbia Wizz Air Easyjet Pegasus
Macedonia Wizz Air Pegasus FlyDubai
Bosnia & Herzegovina Wizz Air Pegasus Germanwings
25
Source: Company Information. Innovata, April 2014 to March 2015.
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DE-RISKED GROWTH PROFILE
New Airports
Increasing Frequencies
New Destination Countries
Joining Existing Airports
26
67.1 %
F15 Capacity
27.2 %
5.6 %
0.1 %
Source: Company Information
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SUMMER 2015 VS. SUMMER 2014
Bulgaria
Poland
Romania
Hungary
Ukraine
Lithuania
Serbia
Czech
Slovakia
Latvia
Bosnia -Herz.
3 New Bases Slovakia
Bosnia & Herzegovina
Poland
16 New Destinations
UK
Netherlands
Romania
Germany
Norway
Serbia
Denmark
Portugal
Egypt
Slovakia
Macedonia
Iceland
Macedonia
+ 3
+ 2
+ 2
+ 1
+ 1
+ 1
+ 1
+ 1
+ 1
+ 1
+ 1
+ 1
Base Country (# of Aircraft) 15 14
Poland 19 15
Romania 15 14
Hungary 8 7
Bulgaria 5 4
Lithuania 4 3
Macedonia 3 2
Latvia 2 1
Ukraine 1 2
Serbia 1 1
Czech Republic 1 1
Bosnia 1 -
Slovakia 1 -
Maintenance/Spare Other
2 4
Total 63 54
New aircraft added
27
Source: Company Information
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F15 F16 F17 F18
Average Seat Count 180 183 190 194
Share with Winglets 36% 48% 55% 60%
FLEET ORDER SUPPORTING GROWTH
28
55
88
78
67
Source: Company Information
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DELIVERING COST LEADERSHIP
Source: Company information,
29
CASK ( cent)
Fleet development Economies of scale
Improved financial standing
Fuel costs
Airport, handling, en- route
Depreciation & amortisation
Staff costs
Aircraft rentals
Maintenance, materials & repairs
Others operating costs
3.72 3.61
Opportunities
Distribution & marketing
Challenges
Inflationary pressures Infrastructure costs US dollar strength
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MAXIMISING REVENUE THROUGH
ANCILLARY INCOME
Lowest Possible Ticket Prices
Maximise Appeal to Drive Growth Influence Customer Behaviour Reduce Seasonality Increase Share of Wallet Leverage Brand
+
Large cabin baggage fees
30
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New and exciting destinations
Fully allocated seating
Plus Fare
Mobile enhancements
31 31
Recent changes Coming in F16
EVEN BETTER CUSTOMER EXPERIENCE
Website upgrades
Launch mobile site
Lowest Fare Finder function
Wizz Tours package holidays available in more countries throughout 2015
New deliveries of A320 and A321 in new livery
New interior in A321 from November
New uniforms with refreshed brand colors
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