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PRESENTATION FOR SHAREHOLDERS
APRIL 2015
Q4 2014
AVIAAM LEASING AT A GLANCE
MORE THAN JUST A LEASING COMPANY
EXPERIENCE AND EXPERTISE
FINANCIAL PERFORMANCE OVERVIEW
REVENUE – QUARTERLY OVERVIEW
REVENUE – I-XII MONTHS OVERVIEW
EBITDA
DEBT
DEALS 2013-2014
FLEET OVERVIEW
AIRCRAFT FLEET – TRANSACTION AND VALUE PERSPECTIVE
P&L SUMMARY
CASH FLOW AND BALANCE SHEET SUMMARY
WHY AIRLINES CHOOSE LEASING COMPANIES TO FINANCE AIRCRAFT?
PRESENTATION FOR SHAREHOLDERS
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A Warsaw Stock Exchange listed global aviation holding
company engaged in commercial aircraft
acquisition, leasing and sales
Actively operating in global aviation market
Good prospects for growth and strengthening
position in the market
High yield on aircraft portfolio
Strong balance sheet Member of ISTAT
Global presence, choice of aircraft
register
Specializes in mainline narrow-body aircraft
as well as high-potential regional jets
AVIAAM LEASING AT A GLANCE
PRESENTATION FOR SHAREHOLDERS
• Fleet structuring • Aircraft registration services • Aircraft repossessions • Maintenance analysis
• Net operating (dry) or financial leases
• Short-term: up to 3 yrs • Long-term: 3 yrs and
above
• Operating Engine leasing • Engine sale & lease back • Guaranteed spare engine
availability • Engine exchanges
• Aircraft purchases, customization and sales
• Aircraft remarketing for lease or sale
• Identification of acquisition and lease prospects
• Market analysis
• Technical management • Contract management • Financial engineering • Asset value protection
AIRCRAFT LEASING AIRCRAFT TRADING CONSULTING SERVICES ASSET MANAGEMENT ENGINE LEASING
MORE THAN JUST A LEASING COMPANY
PRESENTATION FOR SHAREHOLDERS
AviaAM Leasing is an integrated aviation company delivering a full range of aircraft leasing, trading and management services. We provide a complete set of customized services and products to address most distinctive and unique needs of our clients
EXPERIENCE AND EXPERTISE
AviaAM Leasing team is composed of highly qualified and experienced aviation and business experts dedicated to highest quality of service and complete fulfillment of our clients‘ and partners’ needs
ROMUALDAS LEGETAVICUS Technical Director at AviaAM Leasing 16 years of experience with technical
background
Romualdas Legetavicius completed a wide range of aviation training courses including but not limited to PART-145 training, Safety Oversight (at ICAO), PART-M, SAFA Ramp Check, JAR 21 Repairs and Modifications, Maintenance and Airworthiness etc
TADAS GOBERIS CEO, AviaAM Leasing
Chairman of the Board, AviaAM Leasing 15 years of experience as an executive
with sales background
Tadas Goberis has obtained an exceptional level of experience in the sales and organization management in the IT industry achieving many rewards and recognitions for delivering outstanding results
JUSTINAS GILYS COO, AviaAM Leasing
Board Member, AviaAM Leasing 12 years of experience in finance
Expert in deal structuring and management of lease agreements
PAULIUS DOCKA Chief Legal Officer, Avia Solutions Group
Board Member, AviaAM Leasing 15 years of experience of legal practice
Expert in contract management and deal structuring Awarded by a UK based Chambers and Partners as a recommended lawyer
PRESENTATION FOR SHAREHOLDERS
18.0
0.9
27.8
22.3
0
5
10
15
20
25
30
Q4 2013 Q4 2014 2013 2014
150.0
4.7
176.2
120.7
0
20
40
60
80
100
120
140
160
180
200
Q4 2013 Q4 2014 2013 2014
44.0
36.6
0
5
10
15
20
25
30
35
40
45
50
31 December 2013 31 December 2014
Revenues (USDm)
Net Profit (USDm) Cash And Cash Equivalents (USDm)
FINANCIAL PERFORMANCE OVERVIEW
Net Assets and Share Capital ratio (USDm)
PRESENTATION FOR SHAREHOLDERS
74.2
93.1
4.4
5.5
0
1
2
3
4
5
6
7
0
10
20
30
40
50
60
70
80
90
100
2013 2014
Net assets Net assets / Share Capital ratio
REVENUE OVERVIEW
Revenue split – quarters comparison (USDm)
0
10
20
30
40
50
60
70
Q1 2014 Q2 2014 Q3 2014 Q4 2014
Commission income
Sales of aircraft
Supplemental maintenance rent
Lease revenue
66.2
8.1
41.7
4.7
PRESENTATION FOR SHAREHOLDERS
305%
100%
-49%
-3%
100%
-33%
206%
-44%
0%
-100%
-42%
25%
176.2
120.7
0.3
-6.2 -0.9
-48.8
80
100
120
140
160
180
200
Revenue I-XII 2013 Leaserevenue
Supplementalmaintenance
rent
Sales ofaircraft
Commissionincome
Revenue I-XII 2014
Revenue I-XII 2013 vs. I-XII 2014 (USDm)
REVENUE OVERVIEW
Revenue split – comparison with prior year (USDm)
5%
-35%
-13%
-28%
PRESENTATION FOR SHAREHOLDERS
22.3 22.3 16.2
6.7 5.8
139.9
91.2
7.2
7.6
0
20
40
60
80
100
120
140
160
180
200
2013 2014
Commission income
Sales of aircraft
Supplemental maintenance rent
Lease revenue
7.99 5.31
2.32
0.28
2.59 1.29
0.84 0
2
4
6
8
10
EBITDA Q3 2014 Revenue from aircraftleases
Gain on sales ofaircraft*
Net commissionincome**
Other income*** Aircraft maintenanceexpenses
EBITDA Q4 2014
EBITDA I-XII 2013 vs. I-XII 2014 (USDm)
EBITDA
* Calculated as revenue from aircraft sales less costs of aircraft sold ** Calculated as commission income less cost of services *** Calculated as a sum of interest income on loans and other gain (losses) net ****Calculated as a sum of other operating expenses and impairment of receivables and prepayments
47.69
34.46
5.25 2.68 1.67 0.95 -7.04
-12.30 -4.38
-0.06
0
10
20
30
40
50
60
EBITDA I-XII 2013 Revenue fromaircraft leases
Gain on sales ofaircraft*
Net commissionincome**
Gain on sale ofsubsidiaries
Other income*** Aircraftmaintenance
expenses
Employee-relatedexpenses
Otherexpenses****
EBITDA I-XII 2014
PRESENTATION FOR SHAREHOLDERS
EBITDA Q3 2014 vs. Q4 2014 (USDm)
10.8
27.8
80% 87%
DEBT
31 December 2013
Total debt 13.6 32.1
Cash 36.6 44.0
Net debt (23.0) (11.9)
Ratios
Debt/assets 0.11 0.25
Net debt/Equity (0.25) (0.16)
Weighted average interest rate 7.67% 7.76%
% of total debt
% of total debt
31 December 2014
2.8
4.3
20% 13%
PRESENTATION FOR SHAREHOLDERS
DEBT MATURING IN LESS THAN 1 YEAR (USDM)
DEBT MATURING BETWEEN 1 AND 5 YEAR (USDM)
AIRCRAFT TRADING
Acquisition and sale:
2 x Airbus A321
2 x Boeing 737-800
2 x CRJ200
AIRCRAFT LEASING
Acquisition and lease:
1 x CRJ200
1 x Boeing 737-300
2 x Boeing 737-500
TRANSACTION MANAGEMENT
Provision of aircraft transaction management services:
5 x Airbus A321
Sale from existing fleet:
1 x Boeing 737-300
1 x Boeing 757-200
AIRCRAFT TRADING
Acquisition and sale (including brokerage):
3 x Boeing 737-800
1 x Boeing 737-700
1 x Boeing 767-300
AIRCRAFT LEASING
New leases:
1 x Boeing 737-300
1 x Boeing 737-500
TRANSACTION MANAGEMENT
Provision of aircraft transaction management services:
6 x Airbus A320
Sale from existing fleet:
4 x Boeing 737-500
1 x Boeing 737-300
Major transactions accomplished in 2013 - 2014:
2013
2014
PRESENTATION FOR SHAREHOLDERS
DEALS 2013-2014
CURRENT FLEET
FLEET DISTRIBUTION
* The business jets are operated by KlasJet (subsidiary of Avia Solutions Group)
• All aircraft are leased out under long term operating lease agreements
• All leases are secured by security deposits paid by lessees at the inception of leases
• The vast majority of the aircraft (11 out of 14) are registered in renowned aircraft registration jurisdictions – Bermuda and Lithuania
• Successful risk and relationship management – no overdue receivables from any of the lease customers
• Strict operating monitoring procedures of the financial position of the lessees and aircraft maintenance status
COMMENTS
Domicile country of the
lessee
Country of aircraft registration
Aircraft type Number of aircraft on
lease
Russia Bermuda CRJ200 8
Russia B737-500 2
Kazakhstan Lithuania B737-500 1
Belarus Belarus B737-300 1
Lithuania Lithuania CRJ200 Business Jets 2*
Total 14
FLEET OVERVIEW
8 x CRJ200LR 2 x CRJ200LR Business Jets Inc. 1 business jet owned by a joint venture
1 x Boeing 737-300 3 x Boeing 737-500
PRESENTATION FOR SHAREHOLDERS
Net Book Value of Aircraft and Aircraft under preparation for use (USDm)
Aircraft transactions summary 31 December 2013 – 31 December 2014
31 March 2014
Ʃ 18
31 December 2013
Ʃ 17
30 June 2014
Ʃ 12
30 September 2014
Ʃ 12
* These aircraft were owned by AviaAM B03 UAB - the previous subsidiary of AviaAM Leasing AB which was sold on 30 April 2014 ** The acquisition and sale of one Boeing 737-800 aircraft was structured as a brokerage transaction
31 December 2014
Ʃ 13
42.6 39.0
30.6
1.1
-29.1 -4.8 -1.4 0
50
100
Opening 1 January 2014 Additions Disposals Depreciation charge Revaluation surplus Revaluation loss Closing 31 December 2014
PRESENTATION FOR SHAREHOLDERS
AIRCRAFT FLEET
8 Bombardier CRJ200
Boeing 737-500
Boeing 737-300
Boeing 737-700
Boeing 737-800
Boeing 767-300
7
+1**
2
0
0
0
+1
8
7
2
1
0
0
+1
+1
-4*
-1*
-1
-1
-1
-1**
8
3
1
0
0
0
+1 -1
8
3
1
0
0
0
+1 9
3
1
0
0
0
P&L SUMMARY
P&L (USD '000) Q4 2014 Q4 2013 I-XII 2014 I-XII 2013
Revenue from aircraft leases 4,748 7,149 21,999 29,034
Gain on sales of aircraft* (32) 20,530 9,391 21,692
Net commission income** (25) 2,840 2,349 4,973
Gain on sale of subsidiaries - - 5,251 -
Other income*** 726 1,868 4,945 2,267
Aircraft maintenance expenses 1,572 (2,681) (4,770) (6,437)
Depreciation and amortization (1,200) (2,478) (4,764) (9,292)
Employee-related expenses (193) (232) (800) (739)
Other expenses**** (3,718) (6,093) (5,293) (7,138)
Operating profit 1,878 20,903 28,308 34,360
EBITDA 4,468 27,423 34,462 47,694
Profit (loss) before income tax 1,171 19,099 25,327 30,644
Profit (loss) for the period 867 17,969 22,284 27,782
*Calculated as revenue from aircraft sales plus gain on sale of PPE less costs of aircraft sold **Calculated as commission income less costs of services rendered ***Calculated as sum of interest income on loans and other gain (losses) net ****Calculated as sum of other operating expenses, impairment of receivables and prepayments, and revaluation of aircraft
PRESENTATION FOR SHAREHOLDERS
CASH FLOW & BALANCE SHEET SUMMARY
Cash flow (USD '000) I-XII 2014 I-XII 2013
Net cash generated from operating activities 15,440 36,614
Net cash generated from (used in) investing activities (18,935) (9,473)
Net cash generated from (used in) financing activities (3,884) 8,731
Cash at the beginning of the period 43,953 8,081
Increase (decrease) in cash and cash equivalents (7,379) 35,872
Cash at the end of the period 36,574 43,953
Balance sheet (USD '000) 31 December 2014 31 December 2013
Total assets, of which: 118,690 129,057
Non-current assets 50,766 53,833
Current assets 67,924 75,224
Equity 93,054 74,162
Non-current liabilities, of which: 15,467 32,285
Borrowings 10,782 27,821
Security deposits received 3,332 4,464
Deferred income tax liabilities 1,353 -
Current liabilities, of which: 10,169 22,610
Borrowings 2,768 4,297
Trade and other payables 2,488 6,468
Security deposits received 40 3,875
Advances received 70 4,270
Current income tax liabilities 4,803 3,700
Total equity and liabilities 118,690 129,057
PRESENTATION FOR SHAREHOLDERS
WHY AIRLINES CHOOSE LEASING COMPANIES TO FINANCE AIRCRAFT?
0,5% 17
leased
1,7% 100
leased
14,7% 1343
leased
24,7% 3715
leased
40,7% 8440
leased
Over 50% leased
• Greater financial flexibility • Greater fleet flexibility • Access to attractive delivery slots • Availability of capital • Avoid pre-delivery payments • Zero residual value risk • Growth in Low Cost Carriers (LCC's)
OVER HALF OF WORLD AIRLINE FLEET NOW LEASED Operating leases: 1970 to 2012
1970 3722 Aircraft
1980 6037 Aircraft
1990 9160 Aircraft
2000 15032 Aircraft
2014 20726 Aircraft
2020 forecast
PRESENTATION FOR SHAREHOLDERS
Smolensko st. 10, LT-03201 Vilnius Lithuania
www.aviaam.com E. [email protected] T. +370 5 252 55 25
Avia AM Leasing AB
CONTACT US
PRESENTATION FOR SHAREHOLDERS
