ABC Company Limited - SpiceJetcorporate.spicejet.com/Content/pdf/Corporate... · Source: IMF, World Economic Outlook, October 2017 Indian Economy: Steady Growth Supported by Strong

December 2016

Corporate PresentationCorporate Presentation

November 2018

2

Disclaimer

The information in this presentation has been prepared by Spicejet Limited (the “Company”) and has not been independently verified. No representation or warrantyexpressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions containedherein. The information presented or contained in these slides is current as of the date hereof and is subject to change without notice, and its accuracy is notguaranteed. Neither the Company, nor any of its advisers or representatives, nor any of their respective affiliates makes any undertaking to update any suchinformation subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice. No consideration has been given to theparticular objectives, financial situation or particular needs of any recipient. Neither the Company nor any of its advisors or representatives, nor any of their respectiveaffiliates shall have any liability whatsoever (in negligence or otherwise) for any loss arising from the use of this presentation or its contents or otherwise arising inconnection with this presentation. By assessing this presentation, you are agreeing to be bound by the trailing restrictions.

This presentation is intended for financial institutions and professional investors only and is not intended for distribution or reproduction to, or use by, retail investors.This presentation is also not intended for distribution or reproduction to, or use by, any person or entity in any jurisdiction or country where such distribution or usewould be contrary to law or regulation.

The information in this presentation is given in confidence, and reproduction of this presentation, in whole or in part, or disclosure of any of its contents, without priorconsent of the Company, is prohibited. This presentation should be distributed and read in its entirety. This presentation remains the property of the Company and onrequest must be returned and any copies destroyed.

This presentation is for information and convenient reference and does not constitute or form part of, and should not be construed as, any offer for sale or subscriptionof, or solicitation of any offer to buy or subscribe for, any securities of the Company nor should it, or any part of it, form the basis of, or be relied on in connection with,any contract or commitment whatsoever. This presentation does not constitute an offer of securities for sale in any jurisdiction, including the United States, and anysecurities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended or anexemption from such registration.

Please refer to the financial statements of the Company that have been filed with the stock exchanges and is available on the Company’s website. This presentation isnot intended to be fully inclusive and may not contain all of the information that you may consider material. This presentation contains historical information of theCompany that should not be regarded as an indication of future performance or results.

Certain statements in these slides may be considered forward-looking. These statements are based on management’s current expectations and are subject touncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors.

By accepting any copy of this presentation, you agree to be bound by the foregoing limitations.

3

Table of Contents

1 Industry Snapshot

2 Spicejet: Fact Sheet

3 Corporate Strategy

4 Key Financials and Stock Price Performance

4

Table of Contents

1 Industry Snapshot




5

Real GDP Growth ProjectionCY2016 – CY2022E

7.7%

6.0%

5.2%

3.5%

3.1%

2.2%1.9% 1.8%

India China ASEAN-5 Middle East &North Africa

Sub-SaharanAfrica

Latin America &Caribbean

European Union Advancedeconomies

World average of 3.7%

Source: IMF, World Economic Outlook, October 2017

Indian Economy:Steady Growth Supported by Strong Fundamentals

India is likely to reclaim itsposition as the fastest growingmajor economy of the worldahead of China in CY18 accordingto World Bank.

Growth projections of Indianeconomy range from 6.7% to7.1% for FY 18 and expects~7.45% for FY19.3

With 1.3 billion population base,the share of elite, affluent andaspirers households is expectedto increase to 36% of the totalwhile the share of strugglers isexpected to drop to 18% by 2025according to Boston ConsultingGroup (BCG).

Total FDI inflows in Indiaincreased to $61.9 billion at CAGRof 13% from FY13 to FY18.

According to IATA, India is set tobecome third largest airpassenger market by 2025.

Strong Economic Growth

34 36

45

5660 62

0

10

20

30

40

50

60

70

FY13 FY14 FY15 FY16 FY17 FY18

FDI Inflows into India

Source: Department of Industrial Policy & Promotion

Note: 1. CY2016 population data is updated for all countries except Germany, for which data has been estimated by the IMF. CY2017 to CY2022 population data for all countries are estimates by the IMF.2. Income distribution is calculated in constant 2015 dollars, $1 = 65 Rupees3. Source includes Moody, IMF, World Bank and other financial institutions.

(> 30.8)

USD

$ b

illio

n

Source: BCG Report “The New Indian: The Many Facets of a Changing Consumer”, March 2017

Indian Households by Income (Millions) 2

8255

121

140

40

61

1733

6.5 15.8

2015 2025

Strugglers Next billion Aspirers Affluent Elite(15.4-30.8)(7.7-15.4)(2.3-7.7)(<2.3)

Household Income ($ ‘000) (>30.8)

6

Indian Aviation: Global Comparison

Population and Fleet Size

11.5%

7.3%8.3% 8.7%

5.5%4.9%

3.2%

6.0%

3.4%4.6%

6.2%5.6%

3.9%

5.3%6.3%

4.7%3.8%

4.5%3.3%

4.5%

0%

2%

4%

6%

8%

10%

12%

14%

Domestic India Domestic PRC Domestic Turkey DomesticEmerging Asia

Domestic SubSahara Africa

Domestic SouthAmerica

Domestic SouthAfrica

Domestic Brazil Domestic NorthAfrica

DomesticCaribbean

2017-2027 CAGR 2027-2037 CAGR

Source: Airbus Global Market Forecast, July 2018

2.49

1.00

1.451.23

1.40

0.610.39

1.85

0.43 0.48 0.38 0.41 0.33 0.10

United StatesBrazilIndonesiaVietnamChinaSouth AfricaIndia

2037 2017

Domestic Air Passenger Traffic Forecast(Top 10 Markets)

Annual Trips per Capita

According to Airbus, Domestic India is projected to be fastest growing domestic aviation market at 11.5% CAGR (2017-27)

3.9 x

Source: Airbus Global Market Forecast , July 2018Source: Internet research, World Economic Outlook, October 2017

1,3831,309

323 259 20693 56

8,000

0

2,000

4,000

6,000

8,000

10,000

0

400

800

1,200

1,600

China India UnitedStaes

Indonesia Brazil Vietnam SouthAfrica

Population Fleet Size

Mill

ion

Indian Aviation: Demand & Supply Trends

72

62 70

76 82

91

102

66 73

FY12 FY13 FY14 FY15 FY16 FY17 FY18 08M FY18 08M FY19

54 48

55 60

65 71

82

53 58


59 57 59 67

81

99

117

74

88


79 76 81 85

98

117

135

87

103


RPK of Domestic Scheduled Services (billions)

ASK of International Scheduled Services (billions)

Source: DGCA data (November 2018)

RPK of International Scheduled Services (billions)

ASK of Domestic Scheduled Services (billions)




7

Demand has kept pace with Supply on account of economic growth and change in travelling trends

Indian Domestic Full-Service Carriers vs. Low-Cost Carriers Market Share

8

Indian Aviation: Competitive Landscape

Airline PromoterMarket Share(1) #

(Domestic)Capacity Share(1) *

(Domestic)Service Type(2) Fleet Size(2) Aircraft Type(2) Airports(2)

IndiGo InterGlobe Enterprises 43.1% 43.5% LCC 205 A320, A320N, ATR48-Dom15-Int

Air India Govt of India 11.9% 12.4% FSC 182A319, A320, A320N, A321, B747, B777, B787, ATR42/72

72-Dom44-Int

Jet Airways Naresh Goyal 14.2% 14.3% Dual 123A330, B737, B777, ATR72, B737MAX

45-Dom20-Int

SpiceJet Ajay Singh 12.5% 10.9% LCC 733 B737, B737MAX, Q40049-Dom8-Int

GoAir Wadia Group 8.7% 8.6% LCC 49 A320, A320N24-Dom2 – Int

Vistara Tata Group 3.5% 4.6% FSC 22 A320 22-Dom

Air Asia AirAsia, Tata Sons 5.3% 5.2% LCC 19 A320 21 – Dom

Source: (1) DGCA (November 2018)(2) Company website and Internet search (01st January 2019); Airport data is as of January 01, 2019; Fleet data indicates Passenger fleet

61.5% 64.0% 65.3% 64.6% 68.3% 69.4%

38.5% 36.0% 34.7% 35.4% 31.7% 30.6%

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018

LCC Market Share FSC Market Share

Source: DGCANote:(3) Company operates 2 aircrafts on wet lease ; #Percentage of total passengers carried; *Percentage of total ASKM deployed

9

Indian Aviation: Airport Development

Operational airports in

India, out of total 464

airports and airstrips 1125

Airports aimed to be

operational across the

country by 2020 2250

Airports to be connected by

Airport Authority of India

under UDAN scheme in the

first phase 3

22

Cr INR budget allocated to

Civil Aviation Ministry for

FY 19, an increase of 27%

as compared to Union

Budget for FY18

6,602

Cr INR will be invested by

AAI in upgrading airport

infrastructure over a period

till 2019-20 3

17,500

FDI allowed under

automatic route in

Greenfield Projects &

74% for brownfield

projects 1

100%

Income tax for airport

projects for a period of 10

years by govt. 10%

Installations of Radar,

VOR/DVOR and Distance

Measuring Equipment

across all major air-routes

over Indian landmass 3,4

208Source: 1. DGCA, 2. Make in India 3. AAINote: 4. Includes 29 Radar installations, 89 VOR/DVOR installations & 90 Distance Measuring Equipment installations

10

Table of Contents

1 Industry Snapshot




11

Key Highlights: Strong Performance, Consistent Execution

One of the few airlines globally to turn in 14 consecutive quarter of operating profit after near shutdown (1)

#1 Best performing Indian airline stock in terms of investor returns over the last 3 years

#2

#3 Average OTP of 81% since June’16 at metro stations – One of the leading OTP in the industry(2)

#4 Industry Leading Load Factor of 90%+ for 44 months in a row (2)

#5Unique two pronged fleet strategy helps in optimizing network and adapting to existing infrastructure conditions & different demand profiles

#6Strong foothold in domestic market and substantial presence in regional and international operations. Spicejet is in a better position to take advantage of the growth witnessed in tier 2 / tier 3 cities

Note: 1. Data as of November 2018, 2. Source: DGCA (November2018)

#7 Strong management team with Mr. Ajay Singh at the helm – pioneer of low cost aviation in India

Best positioned to capitalize on aviation growth backed by strong demand from India’s secondary centres

12

Route Network

~ Pax carried per day55,874

~ Flights per day436

Domestic destinations 49

International destinations8

Note: Data for November 2018

13

Operations Overview

History and Corporate Matters

Started in May 2005, 2nd largest airline by Jul’14

Change of control in 2010,Acquired by Marans

Change of control again,Ajay Singh takes over following scheme of reconstruction and

revival in Feb’15

Passenger Fleet Details(1)

Scale of OperationsPassengers Ferried:

55,874 per day1.67 million per month

Market Share(2):12.5% on domestic operations

Passenger Load Factor(2):91.1% - Highest in industry

(domestic) consistently

Share Market Data(1)

CMP: Rs 8952week H/L: Rs. 148 /62

Market Cap: ~Rs. 53,198 Mn(31st December’18)

Promoter Shareholding: 60.03%

Stock Performance since Jan’15 (announcement of change in

control): 378%

B737-700Fleet: 3 aircraft



Q400Fleet: 26 aircraft

Note: (1) Fleet Data as of 01st January, 2019; Passenger Data as of 30th November 2018; Market Share Data as of November, 2018(2) Source: DGCA Statistics as of 30st November 2018

B737-MAX8Fleet: 10 aircraft

14

Management

The Company has a strong management team supported by robust middle management

Ajay Singh

Chairman & MD

Leadership Team

Manjiv Singh

Chief Project Officer

SPS Suri

Executive Vice President Flight Operations

Chandan Sand

Sr. Vice President

Legal & Company Secretary

GP Gupta

Chief Strategy Officer & Accountable Manager

Kiran Koteshwar

Chief Financial Officer

Debojo Maharshi

Chief Marketing Officer

Arun Kashyap

Executive Vice President Engineering & Maintenance

Shilpa Bhatia

Chief Sales & Revenue

Officer

GPS Grewal

Chief of Flight Safety

Kamal Hingorani

SVP & Head - IFSD & Customer Experience

Surajit Banerjee

Sr. Vice President & Head -

Human Resources

15

AIRLINE STRATEGY AWARDS 2018

SpiceJet CMD Mr. Ajay Singh awarded with the Global‘Low-Cost Leadership Award’ at the Airline StrategyAwards 2018 in London on July 15. The 2018 juryincluded Geoff Dixon former MD & CEO of Qantas,Ray Webster, former CEO of EasyJet, Montie Brewerformer CEO of Air Canada, Rigas Doganis, Advisor togovernments and airlines on air transport policy,among others.

‘USISPF (U.S. – India Strategic Partnership Forum)Leadership Award’ in Washington D.C. on July 12, 2018

‘Outstanding Entrepreneur of the decade’ award and ‘Bestairlines operating under RCS’ at the Air PassengersAssociation of India (APAI)

Awarded as “Best Domestic Airline” award at the WingsIndia Awards for excellence in the aviation sector

SpiceJet CMD Mr. Ajay Singh was named ‘IndianEntrepreneur of the Year 2017 for BusinessTransformation’ by EY

SpiceJet was conferred the CAPA Chairman’s Order ofMerit for Excellence in Indian Aviation

Capital Finance International has awarded SpiceJet the2017 Best Corporate Governance India Award

SpiceJet Awarded Best In-Flight Asia-Pacific Award forInterior Retrofit Project in association with STG Aerospaceat the Inflight Asia-Pacific Awards

SpiceJet was awarded the Best Domestic Airline at the 4thWest India Awards held at Ahmedabad

Awards and Recognition

16

Table of Contents

1 Industry Snapshot




17

Corporate Strategy

Maximize passenger related ancillaries through a range of value-based products

Integrate travel related services like hotels, vacations, car hire etc.

Develop cargo and merchandise business units

Maintain fleet reliability

Develop a continuous line of trained professionals through its academy

Implement and maintain high level of automation

Highly skilled and motivated work force

Build its financials to avoid shocks

Monitoring and improving fuel consumption

Readiness for import of fuel or hedging

Lower aircraft acquisition & associate maintenance costs

Bring down other costs by insourcing or securing long terms contracts

Maximize asset utilization

Expand international

Focus on key sectors

Develop regional markets with Q400

Dynamic fleeting capability to address seasonality variations

Sizing capacity to demandLow Cost

Operations

Increase Ancillary Revenue

Consolidate Operations &

Strengthen Financials

Revenue Maximization /

Optimization

18

Industry leading load factors and improving OTP performance testament to increasing passenger confidence

Well placed to tap the smaller and regional routes that are driving disproportional market growth

Increased regional connectivity together with focus on international expansion to propel market share

Market Leader in terms of Load Factor

Strengthening Performance and maintain steady market presence

Source: DGCA

Note: * Average of 04 metro stations

Maintain operational efficiency with strong focus on high OTP and low cancellations

Growth in Market Share

Source: DGCA

4%

6%

8%

10%

12%

14%

16%

No

v-1

5

Feb

-16

May

-16

Au

g-1

6

No

v-1

6

Feb

-17

May

-17

Au

g-1

7

No

v-1

7

Feb

-18

May

-18

Au

g-1

8

No

v-1

8

65%

75%

85%

95%

No

v-1

5

Feb

-16

May

-16

Au

g-1

6

No

v-1

6

Feb

-17

May

-17

Au

g-1

7

No

v-1

7

Feb

-18

May

-18

Au

g-1

8

No

v-1

8

Significant Improvement in OTP *

Source: DGCA

40%

50%

60%

70%

80%

90%

100%

No

v-1

5

Feb

-16

May

-16

Au

g-1

6

No

v-1

6

Feb

-17

May

-17

Au

g-1

7

No

v-1

7

Feb

-18

May

-18

Au

g-1

8

No

v-1

8

• Operates 26 Q400s: 13 on finance lease and 13 on operating lease

• With 78/90 seats each, these serve as excellent connecting agents for niche routes with high passenger yields

• Provide the airline with significant flexibility to develop regional routes and test new markets

• Operates 47 B737 family aircraft on operating lease

• Serves 49 domestic and 8 international routes

• Additionally, the company operates 2 aircraft on wet lease making it a total of 47 narrow body operations.

19

Current Passenger Fleet and Expansion PlansFocus on Increasing Regional & International Presence; Create Strong Foothold Domestically

Boeing Fleet Bombardier Fleet

Fleet Size (1)

Seat capacity

Aircraft Type • Boeing 737-700

• 3 aircraft

• 2*149 Y, 1*144Y

• B737 – MAX8

• 10 aircraft

• 189 Y

• Boeing 737-900

• 4 aircraft

• 212 Y

• Q400

• 26 aircraft

• 22*78Y, 4*90Y

Expansion plans

Description

• January 2017: Placed an order with Boeing for 155 firm and 50 options for B737 Max aircraft

• June 2017: Placed an order with Bombardier for purchase of 25 and purchase right for 25 Q400 aircraft at Paris Air Show

Note: (1) Data as of 1st January 2019(2) Include 02 aircraft on wet lease

• June 2017: Entered into an MOU with Boeing for 20 B737 Max 10 aircraft and 20 conversions from previous order at Paris Air Show

• Boeing 737-800

• 30 aircraft 2

• 189 Y

20

Sustain Profitability: Focus on increasing Margins by Reducing Costs

Continuous Focus on

Reducing Costs

Manage StructuralMatters

Focus on increasing ancillary revenues through travel related

opportunities

Increase contribution of direct sales; Spicejet APP

was launched.

Manpower optimisation to cater to maximise utilisation & increased productivity

Drastic improvement in efficiencies of key functions like cargo handling and call centre after being taken in-house

Renegotiation of unfavourable contracts and SLA management

Fuel saving methods such as fuel hedging, lightweight seats being considered. Invested in fuel dashboard software system for monitoring fuel conservation measures.

Route optimization – reduce unproductive flight time;

Will invest in technology & upgrading aircraft specifications.

Dynamic fleeting to address seasonality variations

Work in progress for direct import of ATF – estimated cost saving of 12-

15% on fuel cost

Cost reduction initiatives by dedicated cross-functional task-force

21

Increasing Focus on Ancillary Revenue

Ancillary Products & Services* Ancillary Products and Services Focussed Communication

Excess Baggage Charges

Spice Max Seats

Meals

Pre Book Seats

Insurance

Hand Baggage

My Flexi Plan

Spice Vacations

Priority Check in

Lounge

Visa

Cab

Note: * The list is not exhaustive

22

Increasing Brand Acceptance

Introducing New Routes every Month

Focused Marketing and Promotion Campaigns riding on Spicejet’s Strong Brand Recall to Deliver Maximum Impact at Optimum Cost

Lucrative Offers

23

Table of Contents

1 Industry Snapshot




24

Financials

Note 1: Source – BSE filingsNote 2: EBITDAR is calculated as total income net of (i) operating expenses (ii) employee benefit expenses (iii)other expenses and adding rentalsNote 3: FY19 excludes exceptional items

Net worthRs. MN

(9,945)

(14,852)

(10,389)

(6,091)

(430)

FY14 FY15 FY16 FY17 FY18

Net DebtRs. MN

20,193

17,140

14,553

11,238 10,881 11,569

FY13 FY14 FY15 FY16 FY17 FY18

Profit and Loss Account(1) Balance Sheet(1)

Net Revenue from OperationsRs. MN

54,629 53,038

63,424

79,324

41,811

FY15 FY16 FY17 FY18 YTD19

EBITDAR(2)

Rs. MN

4,675

15,643 16,550

19,270

3,474


Net ProfitRs. MN

(6,871)

4,498 4,307

5,667

(3,640)


Annual Financial Performance

Revenue/ExpensesRs. MN

EBITDAR & EBITDAR margin(%)(2)

Rs. MN

Net Profit & Profit Margin (%)Rs. MN

Half Yearly Financial Performance

2,805

-3,640

8%

-9%

-10%

-5%

0%

5%

10%

(4,000)

(3,000)

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

YTD18 YTD19

EAT EAT margin

• Calculated as sum total of long term and short term

borrowings net of cash and bank balances

• Debt is substantially on account of finance lease on

Q400 aircraft

Calculated as sum total of share capital and other equity

3,474 8,795

24%

8%

0%

5%

10%

15%

20%

25%

30%

0

2,000

4,000

6,000

8,000

10,000

YTD18 YTD19

EBITDAR EBITDAR Margin

37,26234,457

41,81145,451

Revenue Expenses

YTD18 YTD19

40

60

80

100

120

01-Jan-18 01-Mar-18 01-May-18 01-Jul-18 01-Sep-18 01-Nov-18

SpiceJet -39% Sensex 7%

Stock Market Performance

Best performing Indian airline stock in terms of investor returns over the last 3 years

Price Performance – Rebased to 100Last 1 year

Source Reuters as of 31st October 2018

Price Performance – Rebased to 100Since 15th January, 2015 (Change of Control) till date

26

0

100

200

300

400

500

600

700

800

900

15-Jan-15 15-Jul-15 15-Jan-16 15-Jul-16 15-Jan-17 15-Jul-17 15-Jan-18 15-Jul-18

SpiceJet 378% Sensex 28%

Thank YouSpiceJet LimitedRegd. Office: Indira Gandhi International Airport, Terminal 1D, New Delhi – 110037

Website: www.spicejet.com; Email: [email protected];T: +91 124 3913939; F: +91 124 3913844

For detailed quarter/annual financial performance information, visit investor section on our company website

mailto:[email protected]

Documents

ABC Company Limited - SpiceJetcorporate.spicejet.com/Content/pdf/Corporate... · Source: IMF, World Economic Outlook, October 2017 Indian Economy: Steady Growth Supported by Strong