airberlin interim financial report as of 31 march 2015

airberlin
interim financial report
as of 31 march 2015
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
1
FINANCIAL FIGURES
Q1
FINANCIAL PERFORMANCE INDICATORS
Revenue (in million euros)
Revenue from ticket sales (in million euros)
Q1 2015
Q1 2014
793.7
761.8
706.9
683.9
(13.9)
(37.0)
EBIT (in million euros)
(159.9)
(182.8)
Consolidated profit/loss for the period (in million euros)
(210.1)
(209.8)
(1.85)
(1.80)
EBITDAR (in million euros)
Earnings per share (in euros) basic / diluted
Total assets (in million euros) in comparison to financial year-end 2014
Employees (as at 31 March)
2,029.5
1,863.6
9,155
8,694
Please note the following information: In the following report, Air Berlin PLC is referred to as the “Company”. References to “airberlin”, “airberlin group”, “we” or “our” refer to
Air Berlin PLC or, depending on the context, Air Berlin PLC and/or its subsidiaries.
disclaimer – reservation regarding forward-looking statement
This interim financial report contains forward-looking statements on Air Berlin PLC's business and earnings performance, which are based upon our current plans, estimates,
forecasts, and expectations. The statements contain risks and uncertainties as there are a variety of factors which influence our business and to a great extent lie beyond our sphere
of influence. Actual results and developments may, therefore, vary considerably from our current assumptions. Therefore, these are only valid at the time of publication. We
undertake no obligation to revise our forward-looking statement in light of either new information or unexpected events.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
2
MESSAGE FROM THE CHIEF EXECUTIVE OFFICER
DEAR SHAREHOLDERS,
The initial success of our structural measures, pro-active network management and the realignment of our revenue management system could be seen in the first quarter of 2015. Our yields, in particular are moving in the right direction. We were
able to markedly raise our flight revenue and total revenue per passenger by 4 and 5 per cent, respectively. We intend to
build on this progress.
At the International Travel Trade Show in Berlin in early March, we announced a complete set of actions to strengthen our
market presence. We launched our new fare concept for short- and medium-haul routes on 5 May. This concept includes
significant enhancements through the addition of an attractive one-way fare "JustFly" and the “FlyFlex+” service package for
business travellers. We also recently announced the 2015 customer initiative, including the 24/7 service initiative where by
mid-year we aim to reply to passengers' requests within 24 hours and process all customer requests within seven working
days. Finally, we introduced the new brand "airberlin business benefits", bundling numerous benefits that corporate customers already enjoy at airberlin and further increasing the comfort and services offered to business travellers and corporate
customers. Our goal is to become an industry leader for business and corporate customers.
The response was very positive. The exclusive "JustFly" sneak preview with one million tickets available at the trade show was
a particular success. Through new retail concepts and continuing to consistently implement our restructuring programme we
can put your airberlin back on the road to profitability. As we previously announced, we will improve our results by further
optimising the group's organisation and its processes along the value chain. These measures will be largely completed by the
third quarter of the current financial year. We also plan in the current year to significantly improve our network structure, our
scheduling and distribution. Finally, we want to set new standards in service quality through our 24/7 service initiative. The
award we received at the international trade show for best price-performance for transportation, from the Handelsblatt newspaper and market research institute YouGov, recognizing 31 brands in the air transport, rental car and rail industries shows
that we are on the right track.
Further revenues should be generated by the continuing systematic development of our product, strengthening of our hubs
and increasing our cooperation with our partner airlines. We especially anticipate a continuation of the dynamic growth momentum in codeshares. We expect this to lead to higher revenue per passenger in the current financial year. Notwithstanding
that the restructuring programme will continue to put pressure on our earnings in 2015, we expect that the envisaged yield
improvement will generate a noticeable earnings improvement in the 2015 financial year compared to 2014.
BERLIN, MAY 2015
STEFAN PICHLER
CHIEF EXECUTIVE OFFICER
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
3
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
THE AIRBERLIN SHARE
SHARE PRICE PERFORMANCE
The European stock markets and the German market in particular trended higher during the current financial year until the
first half of April. Supported by high liquidity and a better economic outlook, stock prices rose strongly and some indices
reached new highs. Since mid-April stagnation has set in. The index of European airlines has followed this trend relatively
closely in a somewhat weaker form. The airberlin share ignored this trend initially and remained stable until early March. The
introduction of the new airberlin fare concept for short- and medium-haul routes and the 2015 customer initiative at the International Travel Trade Show in Berlin sparked a strong rise in the share price in early March. Within a few days, the airberlin share gained 22 per cent and marked a year high on 6 March at a share price of EUR 1.38. The share price then stabilized
and was recently trading at a high level within a tight range. After closing the 2014 financial year at EUR 1.12, the closing
price of the airberlin share on 31 March 2015 was EUR 1.22. This represents a 9.9 per cent share price increase in the first
quarter of 2015.
COVERAGE OF THE AIRBERLIN SHARE
In the first quarter of 2015, a total of four analysts or research houses covered the Company. One analyst recommended buying the airberlin share, one took a neutral stance on the share and two recommended selling or underweighting the share,
respectively.
Shareholder structure by nationality as at 31 March 2015 (in per cent)
Germany
56.75
United Arab Emirates
29.22
Turkey
12.18
Other EU countries / EEA countries
0.62
Other countries
0.36
Austria
0.48
Liechtenstein
0.21
Luxembourg
0.17
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
4
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
Relative Performance airberlin vs. SDAX Price Index and the
STOXX Europe Total Market Airlines Price Index (rebased on airberlin)
EUR
Source: Thomson Reuters
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
5
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
The Air Berlin PLC share in the first three months of 2015
Share capital:
EUR 29.200.127 und GBP 50.000
Total number of issued and fully paid ordinary registered shares
as at 31 March 2015:
Class:
Nominal value:
116,800,508
Ordinary registered shares
EUR 0.25
Bloomberg symbol:
AB1 GY
Reuters symbol:
AB1.DE
ISIN:
WKN:
Stock exchanges:
GB00B128C026
AB1000
XETRA, Frankfurt/Main; Regulated unofficial
market: Berlin, Dusseldorf, Hamburg,
Munich, Stuttgart
Accounting standards:
IAS/IFRS
Market data for the first three months of 2015
Trading segment:
Regulated market (Prime Standard)
Primary industry:
Transportation and logistics
Industry group:
Indices:
Designated Sponsors:
Market capitalisation as at 31 March 2015:
Free Float according to Deutsche Börse AG as of 31 March 2015:
Free Float market capitalisation as at 31 March 2015:
Airlines
Prime All Share, Classic All Share
Commerzbank AG
EUR 142.497 million
58.77 %
EUR 83.732 million
Average trading volume Q1 2015 in units
(XETRA / all German exchanges):




338,296 / 438,505
As at 31 March 2015, the Company was aware of two shareholders who each held more than five per cent of the Company’s outstanding shares: Etihad Airways holding 29.21 per cent and ESAS Holding A.S. with 12.02 per cent. All other
shareholders represented less than 5 per cent of the outstanding shares.
The shares are officially traded on XETRA as well as on the Frankfurt Stock Exchange. Trading on the regulated unofficial
market takes place at the exchanges in Berlin, Dusseldorf, Hamburg, Munich and Stuttgart.
airberlin shares are ordinary registered shares. A shareholder register is maintained to ensure compliance at all times
with the aviation regulatory requirements on share ownership and effective control over the Company (EU Directive
No. 1008/2008 and the air traffic agreements concluded between the Federal Republic of Germany and non-EU member
states). The registrar for the shares is registrar services GmbH, Eschborn, Germany.
"A shares" have also been issued.
The company provides information about its on-going investor relations activities, ad-hoc notifications, IR releases, investor
and analyst presentations, as well as all other mandatory reports and disclosures in a timely manner. This information may be
found on its investor relations website at ir.airberlin.com.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
6
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
STRATEGIC REPORT AND INTERIM MANAGEMENT
REPORT
ECONOMIC CONDITIONS
The economy as a whole
The European economy is profiting from a range of positive factors that include persistent low oil prices, historically low
interest rates and a decline in the euro's value against the currencies of Europe's key trading partners. The drop in oil prices
is providing the most benefit to export-oriented companies and consumers, who now have greater ability for additional consumer spending. Economic growth has picked up since the start of 2015 prompting growth estimates to move higher. Germany's continued robust labour market and higher employment figures are providing an additional boost. The customary spring
pick-up in the labour market was stronger than usual in the current year. The German domestic economy received a strong
boost from private consumption and consumer sentiment is positive — a fact that is reflected by both consumers' expectations for higher income as well as the German consumer's propensity to buy, as was demonstrated by the GfK consumer
confidence index (as of March 2015). Both categories grew by almost five per cent and six per cent, respectively, during the
February to March period as released at 26 March 2015.
The air travel sector
The International Air Transport Association (IATA) reported positive industry developments during the first three months of
2015. The growth of revenue passenger kilometres (RPK) in the first quarter of 2015 was 6.1 per cent and was stronger than
in the previous year's period (5.6 per cent). Due to a lower increase in the industry's capacity measured in terms of available
seat kilometres (ASK + 5.4 per cent from 5.8 per cent), utilisation rose slightly from 78.5 per cent in the previous year's quarter to 78.8 per cent in the reporting quarter. The 5.4 per cent growth in RPK in Europe was slightly lower, but on a year-onyear basis it accelerated significantly compared to 4.7 per cent in the first quarter of 2014. This contrasted with the trend in
capacity measured in terms of ASK where European carriers reported a rise in capacity in the reporting quarter of only 3.6
per cent after growing 5.5 per cent in the previous year's quarter. Utilisation rose accordingly by 1.2 percentage points to
80.8 per cent – the highest level among all regions. There were major differences in the European traffic figures between the
continued weak development in the euro zone and the strong growth in other countries — particularly Turkey.
IMPORTANT EVENTS IN THE FIRST QUARTER OF 2015
30 January 2015: airberlin achieved a record punctuality level of 85.7 per cent for the year 2014. This success was illustrated
by airberlin's placement in the top ten most punctual airlines worldwide in the "6th Annual Airline On-Time Performance
Service Awards" sponsored by the website flightstats.com, a leading online portal for the evaluation of flight data.
1 February 2015: Stefan Pichler is appointed Chief Executive Officer (CEO) und Chairman of the Management Board of the
Company responsible for all group companies and brands. As CEO, Mr Pichler is also the Executive Director of the Board of
Directors. He follows Wolfgang Prock-Schauer, who returned to his former position as Chief Strategy and Planning Officer.
17 February 2015: Arnd Schwierholz will assume the position of Chief Financial Officer (CFO) of the Company effective
1 April 2015. He follows Ulf Hüttmeyer, who was the group's CFO for the past nine years and who left airberlin on 30 April
2015 to accept a new position at Etihad Airways.
28 February 2015: Wolfgang Prock-Schauer resigns from airberlin.
2 March 2015: Dr Alfred Tacke joins the Board of Directors of the Company. He succeeds Heinz-Peter Schlüter who resigned
from the Board of Directors after seven years of service.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
7
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
Early March 2015 – International Travel Trade Show in Berlin: airberlin presents its new fare concept for short- and mediumhaul flights starting on 5 May 2015 and gives details on the important aspects of the 2015 customer initiative. airberlin introduces a new brand "airberlin business benefits", which better highlights and bundles the numerous benefits for corporate
customers. The comfort and service offered to business travellers and corporate customers will be also enhanced further.
With this new concept, airberlin plans to become the industry leader for business and corporate customers. airberlin is recognised by the Handelsblatt newspaper and the market research institute YouGov as the price-performance champion in the
area of mobility. This award was based on a survey using the YouGov brand monitor, BrandIndex, in which consumers evaluated the price-performance ratio, among other things, of 31 brands operating in the airline, rental car and short- and longdistance rail segments.
BUSINESS DEVELOPMENT
Report on operating performance
The streamlining and focusing of our route network is part of the restructuring programme that began in 2014 and continues
in 2015. As a result, capacity in the reporting quarter had a year-on-year decline of 4.0 per cent from 7,795,033 to 7,481,909
seats. The average capacity per flight declined 2.7 per cent in the course of harmonizing our fleet, falling from 167.1 in the
previous year’s quarter to 162.6. The harmonisation of the airberlin group's fleet based on Airbus aircraft continued in the
reporting quarter. In the previous year’s quarter there were 79 Airbus aircraft available and by the end of the reporting quarter this had increased to a total of 91 aircraft. During the same period, the number of Boeing aircraft fell by a total of seven to
39 aircraft. At the end of the 2014 financial year, the airberlin group still had 84 Airbus aircraft and 43 Boeing aircraft in
operation. The airberlin group flew with a total of 150 aircraft at the end of the first quarter of 2015 after 143 aircraft at the
end of the comparable quarter of the prior year and a total of 149 aircraft at the end of the 2014 financial year.
At 46,022 take-offs, a total of 1.4 per cent fewer flights were carried out as in the prior year's quarter (46,662). The average
flight distance grew 5.8 per cent to 1,581 kilometres increasing airberlin's total number of flight hours 2.4 per cent (86,091
hours from 84,100 hours in the previous year’s quarter). The higher average flight distance is chiefly the result of the increased cooperation with our strategic partner Etihad Airways and the greater number of offers to the Etihad Airways hub in
Abu Dhabi. The marked rise in block hours, not only in absolute terms (+2.0 per cent over the previous year's comparable
period) but also per flight (+3.5 per cent above the same quarter in 2014) was supported by efficiency improvements on the
ground that led to lower turnaround times between landings and take-offs.
The number of passengers (PAX) declined 0.8 per cent to 5,810,397 passengers in the reporting quarter from 5,859,660 passengers in the first quarter of the prior year. Passenger figures rose sharply in March after a rather moderate start in the year.
ASK in the reporting quarter grew a mere 1.5 per cent from 11.65 billion in the comparable prior year's quarter to 11.83
billion. This rise was significantly lower than the rise in RPK which increased 3.3 per cent from 9.53 billion in the prior year's
quarter to 9.84 billion. As a result, utilisation in the first quarter of 2015 added 1.4 percentage points rising from 81.8 per
cent to 83.2 per cent.
There was a considerable improvement in yields in the reporting quarter compared to the same quarter in the previous year.
Flight revenue (including taxes and securities fees) per PAX gained 4.0 per cent to from EUR 111.45 in the same quarter of
2014 to EUR 115.92. This improvement reflects the first signs of success of the new IT-based revenue management system.
Total revenue per PAX grew 5.1 per cent from EUR 130.01 in the same quarter of 2014 to EUR 136.60. Based on ASK, total
revenue in the reporting quarter was 2.6 per cent higher (from 6.54 eurocents in the same quarter of 2014 to 6.71 eurocents).
Total revenue per RPK increased from 7.99 eurocents in the same quarter of 2014 to 8.06 eurocents. Operating expenses
(EBIT excluding other operating expenses) per ASK grew slightly by 0.8 per cent to 8.20 eurocents after 8.14 eurocents in the
same quarter of the previous year due to reporting date-related effects such as invoices for maintenance expenses. Excluding
fuel expenses, operating expenses per ASK increased to 6.54 eurocents from 6.35 eurocents in the same quarter of the previous year.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
8
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
Key operating figures for Q1 2015
+/– %
Q1 2015
Aircraft (as at 31 March)
+4.9
150
143
Flights
-1.4
46,022
46,662
Q1 2014
–13.9
99
115
-0.8
5,810,397
5,859,660
Available seats (capacity)
-4.0
7,481,909
7,795,033
Available seat kilometres (billions; ASK)
+1.5
11.83
11.65
Revenue passenger kilometres (billions; RPK)
+3.3
9.84
9.53
+1.4*
83.2
81.8
+2.0
98,188
96,235
Destinations (as at 31 March)
Passengers (PAX)
Seat load factor (%; RPK/ASK)
Number of block hours
* percentage points
airberlin group's fleet of aircraft
Number of aircraft
31 March 2015
31 March 2014
A319
9
9
A320
48
40
A321
20
16
A330–200
14
14
B737–700
8
11
B737–800
31
35
Q400
17
11
E-190
3
7
Total
150
143
Report on net assets, financial position, capital expenditure and financing
Total assets at the close of the first three months of the 2015 financial year were 8.9 per cent higher rising from EUR 1,863.6
million as at 31 December 2014 to EUR 2,029.5 million. Assets include an increase in non-current assets that mainly resulted
from slightly higher non-current trade accounts receivables and other receivables of 1.7 per cent from EUR 869.7 million to
EUR 884.1 million. This increase was mainly due to reporting date-related currency effects concerning prepayments for leasing obligations that are contained therein. Because these prepayments are made in US dollars, the euro’s decline since the
end of 2014 caused a corresponding increase in the receivables reported in euro as of 31 March 2015. Current assets grew
15.3 per cent from EUR 993.9 million to EUR 1,145.4 million. All items under current assets increased during the reporting
quarter except for assets held for sale which declined by EUR 20.2 million to EUR 122.6 million due to the sale of aircraft.
Within current assets, trade accounts receivables and other receivables reported a significant rise of EUR 62.4 million to EUR
458.9 million. This line-item was also impacted by reporting date-related effects: portions of the customary seasonal order
bookings were still reported under receivables and not yet included in cash and cash equivalents. Bank deposits and cash
balances increased from EUR 259.2 million to EUR 287.6 million also as a result of higher bookings as well as from cash
proceeds from the sale of aircraft.
Shareholders' equity declined from EUR –415.6 million as of 31 December 2014 to EUR –554.9 million as of 31 March 2015 in
line with seasonal income development. Capital measures were not carried out during the reporting quarter. As expected, the
fair value measurement of hedging instruments after taxes improved significantly compared to its level at the end of the 2014
financial year (from EUR –153.4 million to EUR –84.5 million).
Non-current liabilities fell 2.2 per cent to EUR 779.8 million at the end of the reporting quarter from EUR 797.1 million at the
end of the 2014 financial year. This figure includes a decline in interest bearing liabilities from aircraft financing from EUR
90.0 million to EUR 59.4 million. Other non-current interest bearing liabilities grew by EUR 16.7 million to EUR 656.7 million
as a result of currency effects. Current interest bearing liabilities from aircraft financing also rose due to currency effects and
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
9
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
totalled EUR 138.8 million at the end of the reporting quarter after amounting to EUR 109.8 million. Other current interest
bearing liabilities declined from EUR 223.7 million as of 31 December 2014 to EUR 214.3 million. The seasonal effects on
bookings already mentioned brought about an increase of EUR 258.7 million in advance payments from EUR 396.4 million as
of 31 December 2014 to EUR 655.1 million at the end of the reporting quarter. The smaller rise compared to the EUR 326.3
million increase in advance payments in the previous year's comparable quarter shows the effect of our new revenue management strategy. This strategy is no longer focused on achieving the highest number of early bookings possible but aims at
optimising bookings to improve yields. In total, current liabilities at the end of the first quarter of 2015 were 21.8 per cent
higher than the level at the end of 2014 (EUR 1,804.6 million from EUR 1,482.0 million).
As of 31 March 2015, the sum of current and non-current interest bearing liabilities only changed slightly to EUR 1,069.3
million from a total of EUR 1,063.4 million at the 2014 financial year-end. The sum of current and non-current liabilities increased from EUR 2,279.1 million to EUR 2,584.5 million mainly due to the rise in bookings. Net debt declined to EUR 781.7
million as of 31 March 2015 from EUR 804.3 million as of the end of 2014.
Net cash flows from operating activities after interest paid/received and taxes totalled EUR –10.9 million in the first three
months of the current financial year (previous year's quarter: EUR –22.4 million). The cash outflow was mainly the result of
the net loss for the period. Changes in working capital affecting cash flow included a total increase of EUR 144.0 million in
trade accounts receivables and other assets and prepaid expenses. This was contrasted by cash inflows from higher trade
accounts payables and other current liabilities totalling EUR 316.8 million. Cash Flow from investments in non-current fixed
assets totalled EUR 4.9 million in the reporting quarter and disposals amounted to EUR 72.5 million. Cash flow from investing
activities totalled EUR 66.1 million as of 31 March 2015 compared to EUR 22.8 million in the previous year's quarter. Cash
flow from financing activities recorded a net outflow of EUR 34.5 million. The repayment of financial liabilities totalling EUR
63.6 million was offset by proceeds of EUR 29.1 million from the assumption of interest bearing liabilities. With net cash
inflows of EUR 20.8 million, net cash and cash equivalents at the end of the first quarter of the current financial year amounted to EUR 287.5 million.
Results of operations
Group revenue in the reporting quarter increased 4.2 per cent from EUR 761.8 million in the prior year's first quarter to EUR
793.7 million. Flight revenue was 3.4 per cent higher rising from EUR 683.9 million to EUR 706.9 million. The slight decline
in the number of passengers was more than compensated for by a significant rise in yields. Revenues from ground services
and other services rose 12.1 per cent in the reporting quarter from EUR 72.6 million in the previous year’s quarter to EUR
81.4 million. Revenues from inflight sales grew 5.8 per cent to EUR 5.5 million from EUR 5.2 million. Other operating income
in the reporting quarter totalled EUR 16.7 million from EUR 3.1 million in the previous year's comparable period. This figure
reflects mainly income from aircraft sales in the amount of EUR 13.2 million.
Operating expenses in the reporting quarter increased 2.4 per cent (from EUR 947.7 million to EUR 970.3 million) – a much
lower rise than that of revenue. Expenses for materials and services were 2.0 per cent higher at EUR 646.0 million from EUR
633.3 million. Fuel expenses managed to decline by 5.7 per cent from EUR 208.1 million to EUR 196.2 million despite adverse
currency effects. The higher number of leased aircraft and the result of currency effects generated a 5.4 per cent rise in leasing expenses from EUR 128.1 million in the previous year's quarter to EUR 135.0 million. Costs for catering and in-flight sales
increased from EUR 20.3 million in the previous year's quarter to EUR 26.5 million in the reporting quarter as a result of the
longer average flight distances, among other things. The expense items allocated to "others" had a marked decline of 16.8 per
cent from EUR 38.6 million to EUR 32.1 million. In contrast, expense items that cannot be directly controlled by airberlin
reported a considerable increase. Airport fees rose 8.9 per cent from EUR 156.9 million to EUR 170.9 million in the reporting
quarter. One-time effects and reporting date-related factors both played a role in this increase but are expected to be temporary in nature and should normalise in the further course of the year. The air transportation tax and navigation expenses both
increased by 5.2 per cent: navigation expenses grew from EUR 50.3 million to EUR 52.9 million and air transportation taxes
increased from EUR 30.8 million to EUR 32.4 million.
Personnel costs rose due to wage increases in the course of 2014, due to personnel integrated from the Niki Labour Pool into
the airberlin group and as a result of other expenses in connection with the current restructuring programme. Personnel costs
grew by 12.9 per cent from EUR 125.4 million to EUR 141.6 million. The majority of the restructuring expenses included in
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
10
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
this figure could not be recognised in the 2014 financial year. Depreciation and amortisation was 37.9 per cent below the
prior year's comparable quarter level falling from EUR 17.7 million to EUR 11.0 million primarily due to the lower number of
owned aircraft. Other operating expenses remained at the prior year's level (EUR 171.7 million from EUR 171.3 million).
While the majority of the individual items included in other operating expenses recorded significant declines, training expenses and other personnel expenses increased from EUR 5.3 million in the previous year’s quarter to EUR 6.4 million in the
reporting quarter as a result of necessary retraining in the course of the fleet's harmonisation. Expenses for maintenance,
repair and overhaul of technical equipment also grew from EUR 60.4 million to EUR 69.2 million. This expense item can
fluctuate extensively in the course of a year because, by nature, aircraft maintenance does not coincide with the reporting
dates of quarterly financial statements.
Despite these reporting date-related higher expenses and one-time costs from restructuring, the reporting quarter's results
show a significant improvement in comparison to the previous year's quarter. Operating earnings before depreciation, amortisation and leasing costs (EBITDAR) improved by EUR 23.1 million to EUR –13.9 million following EUR –37.0 million in the
previous year's quarter. Operating earnings before leasing expenses (EBITDA) increased by EUR 16.2 million from EUR –
165.1 million to EUR –148.9 million. Operating income (EBIT) improved by EUR 22.9 million and totalled EUR –159.9 million
in the reporting quarter from EUR –182.8 million in the previous year's first quarter. Net financing costs in the reporting
quarter were reported at EUR –52.3 million from EUR –30.5 million in the previous year's quarter as a result of higher interest
expenses related to the valuation of long term liabilities as well as changes from the fair value of derivatives.
The loss before tax in the first quarter of 2015 amounted to EUR –212.2 million from EUR –213.4 million in the previous
year's quarter. After a tax benefit of EUR 2.1 million (prior year: EUR 3.6 million), the result for the period was EUR –210.1
million from EUR –209.8 million in the previous year's quarter. Basic and diluted earnings per share were EUR –1.85 from
EUR –1.80.
EMPLOYEES
After the first three months of the 2015 financial year, the airberlin group employed a total of 9,155 employees compared to
8,694 at the end of the same quarter in the prior year and 8,440 at the end of financial year 2014. Of these, 4,072 employees
(2014 year-end: 4,005) were employed as ground staff and 5,083 (2014 year-end: 4,435) were part of the flying crew. At the
start of 2015, 751 employees from the NIKI Labour Pool were brought in as flight personnel and another 16 employees were
added to the ground personnel of the airberlin group. At the end of the first quarter of 2015, the flight personnel consisted of
3,535 cabin crew and 1,548 cockpit crew (2014 year-end: 3,097 and 1,338). As at 31 March 2015, 65 young people were in
training at airberlin (2014 year-end: 84).
PRINCIPAL RISKS AND UNCERTAINTIES
The risks mentioned in the chapter "Principal Risks and Uncertainties" found in the 2014 Annual Report, continue to be relevant and include, in particular, the macroeconomic and industry risks, market, competitive, regulatory, operating, procurement risks, as well as general political and wage policy-related, and legal and liability risks.
REPORT ON FORECASTS AND OTHER STATEMENTS REGARDING EXPECTED DEVELOPMENT
Overall economic and industry environment
The German federal government believes the German economy is clearly in an upswing driven by strong domestic consumption. An added boost is coming from low oil prices and depreciation of the euro. The industrial indicators show a rising trend.
Export activity has trended upward particularly since corporate export expectations have continued to improve. In its most
recent statement on economic development, the federal government raised its forecast for German economic growth in 2015
to 1.8 per cent. The growth rate of the global economy is also improving slightly despite overall weak momentum. Above all,
growth in the emerging markets remains subdued and expectations for China are for below-average growth and Russia is
expected to slide into a recession in 2015. Positive stimulus is coming from the United States and the euro zone is recording a
slight improvement in economic activity. This region is also seeing the impact of the weak euro and low oil prices on its eco-
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
11
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
nomic development. The European Central Bank is forecasting growth of 1.5 per cent in the euro area in 2015. The global
economy is forecast to have real GDP growth of around 3.5 per cent.
Despite falling yields, the IATA expects an improvement in earnings in 2015 for its member airlines, particularly as a result of
the continued low raw material prices and growing volumes. The expected increase in passenger numbers worldwide is 6.8
per cent from 3.31 billion in 2014 to 3.53 billion in the current year and RPK is expected to grow 7.0 per cent from 6.13 trillion to 6.55 trillion. A decline in utilisation from 79.9 per cent to 79.6 per cent in 2015 is expected accompanied by fleet
growth of 3.6 per cent and a rise in capacity of 5.5 per cent to 3.7 billion seats, or a 7.3 per cent rise in ASK. Utilisation in
Europe is also expected to decline slightly because the ASK at 5.8 per cent will grow slightly more than the RPK (5.5 per
cent). Based on EBIT, the industry’s margin is expected to rise from 5.1 per cent in the previous year to 6.0 per cent worldwide in 2015 and net earnings are expected to rise from USD 19.9 billion in the previous year to a total of USD 25.0 billion.
The net margin is expected to then increase from 2.7 per cent to 3.2 per cent. Net earnings of European airlines are expected
to increase from USD 2.7 billion to USD 4.0 billion. This increase would result in a net margin of 1.8 per cent in the current
year from 1.3 per cent in the previous year.
Business development
The first quarter of 2015 reported a visible improvement in revenues, higher cost savings and better performance as a result
of the increased application of the new active revenue management system and the continued implementation of the restructuring programme. Reporting date-related factors and significant currency effects resulting from exchange rate volatility
negatively distorted results. This impact is expected to balance out in the course of the year. The earnings development in
2015 will still be burdened by one-time costs from the restructuring process. In the 2014 financial year, a total of EUR 47.5
million in provisions was recognised for the current financial year. However, additional expenses, such as training costs in the
course of the fleet's harmonisation, could not be included in these provisions.
The current restructuring programme will continue during the 2015 financial year as planned. By the third quarter of 2015, all
management structures and processes are expected to have been reviewed for their added value and control quality and
adapted, if necessary. These measures should generate additional synergies and efficiency improvements. Potential improvements will also be exploited in network planning, revenue management and sales.
As previously announced, on 5 May 2015, airberlin expanded its fare concept for short- and medium-haul routes in an effort
to cater more specifically to the wishes and needs of its passengers. A significant enhancement in this regard is the attractive
one-way fare "JustFly" at steeply discounted prices starting from EUR 44. Passengers had an opportunity to get an exclusive
sneak preview of this fare at the International Travel Trade Show in Berlin in early March and the response was very encouraging. Additionally, airberlin now offers business travellers a special service package called “FlyFlex+”. With the addition of
this package, airberlin's fare concept includes four fares: “JustFly”, “FlyDeal”, “FlyClassic” und “FlyFlex+”.
In light of the risks presented in the risk report contained in our 2014 annual report, airberlin expects sold RPK to develop
positively during the 2015 financial year and, despite continued strong price competition, expects an improvement in yields.
Developments since the start of the year — particularly the month-to-month comparisons — show us the way: Despite a slight
decline in passenger numbers compared to the prior year's comparable quarter, RPK rose significantly in the reporting quarter and utilisation have risen. Other positive effects on the trend in revenues are expected to come from the systematic development of the product range, advanced network optimisation and extended collaborations with our partners including among
others, Etihad Airways and the oneworld® alliance. The dynamic growth momentum we have had in recent years is expected
to continue, especially in our codeshare business.
Notwithstanding that the restructuring programme will continue to put pressure on our earnings in the 2015 financial year,
we expect that the envisaged yield improvement will generate a noticeable earnings improvement in the 2015 financial year
compared to 2014.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
12
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS AND NOTES
EVENTS AFTER THE REPORTING DATE
21 April 2015: airberlin cancels its membership in the Association of European Airlines (AEA).
24 April 2015: airberlin announces a realignment of the management team. In addition to his role as Accountable Manager,
Captain Oliver Lackmann is appointed to the newly created position of Chief Flight Operations Officer (CFOO), as of 1 May
2015 and is responsible for flight operations, crew planning and training as well was Operations Compliance & Safety Management and Aviation Security Management. Marco Ciomperlik, previously the Chief Restructuring Officer, will assume the
newly created position of Chief Production Officer (CPO) as of 1 May 2015 which includes responsibility for Hospitality including the future product strategy and operations along the entire service chain. This mainly includes the areas Airport
Operations, Cabin Crew, Guest Experience, Maintenance and Network Operations. He also has responsibility for the subsidiaries airberlin technik and Leisure Cargo. As of 1 June 2015, Julio Rodriguez is named the new Chief Commercial Officer
(CCO) responsible for Sales, Revenue Management and E-Commerce.
BOARD OF DIRECTORS
On the date of this report's publication, the Board of Directors of the Company was composed of the following directors:
Executive Director
Stefan Pichler, Chief Executive Officer
Non–Executive Directors
Dr. Hans-Joachim Körber, Chairman of the Board of Directors
James Hogan, Vice Chairman of the Board of Directors
Joachim Hunold, Co-Vice Chairman of the Board of Directors
Andries B. van Luijk
James Rigney
Ali Sabanci
Dr. Lothar Steinebach
Dr. Alfred Tacke
Nicholas Teller
Johannes Zurnieden
Management Board
Stefan Pichler
Chief Executive Officer
Arnd Schwierholz
Chief Financial Officer
Julio Rodriguez
Chief Commercial Officer (as of 1 June 2015)
Marco Ciomperlik
Chief Production Officer
Oliver Lackmann
Chief Flight Operations Officer
Dr. Martina Niemann
Chief Human Resources Officer
Approved by the Directors on 11 May 2015
STEFAN PICHLER
CHIEF EXECUTIVE OFFICER
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
13
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
Air Berlin PLC
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
for the period ended 31 March 2015
Revenue
Other operating income
1/15-3/15
1/14-3/14
€ 000
€ 000
793,690
761,800
16,660
3,074
Expenses for materials and services
(645,996)
(633,258)
Personnel expenses
(141,565)
(125,439)
(11,012)
(17,674)
Other operating expenses
(171,684)
(171,338)
Operating expenses
(970,257)
(947,709)
Result from operating activities
(159,907)
(182,835)
(27,592)
(21,141)
Depreciation and amortisation
Financial expenses
Financial income
210
205
Result on foreign exchange and derivatives, net
(24,893)
(9,596)
Net financing costs
(52,275)
(30,532)
Share of at equity investments, net of tax
Result before tax
Income tax result
Result for the period
of which: attributable to hybrid capital investors
of which: attributable to Air Berlin PLC shareholders
0
(212,182)
2,110
(210,072)
5,918
(215,990)
0
(213,367)
3,566
(209,801)
0
0
Basic earnings per share in €
(1.85)
(1.80)
Diluted earnings per share in €
(1.85)
(1.80)
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
14
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF OTHER
COMPREHENSIVE INCOME (UNAUDITED)
Result for the period
Foreign currency translation reserve
1/15-3/15
1/14-3/14
€ 000
€ 000
(210,072)
1,770
(209,801)
99
Effective portion of changes in fair value of hedging instruments
33,969
(10,196)
Net change in fair value of hedging instruments transferred from equity to profit or loss
36,718
5,520
Income tax on other comprehensive income
(1,736)
1,322
Other comprehensive income for the period, net of tax
70,721
(3,255)
Total comprehensive income
of which: attributable to hybrid capital investors
of which: attributable to Air Berlin PLC shareholders
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
(139,351)
5,918
(145,269)
(213,056)
0
(213,056)
15
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
Air Berlin PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
as of 31 March 2015
31/03/2015
31/12/2014
€ 000
€ 000
Intangible assets
411,891
408,798
Property, plant and equipment
301,842
302,176
Trade and other receivables
97,103
85,303
Deferred tax asset
15,000
16,835
Assets
Non-current assets
Positive market value of derivatives
Net defined benefit asset
Deferred expenses
At equity investments
Non-current assets
1,042
8
709
709
49,785
49,117
6,762
6,762
884,134
869,708
Current assets
67,427
64,929
Trade and other receivables
458,866
396,483
Positive market value of derivatives
Inventories
137,962
82,467
Deferred expenses
70,996
47,936
Assets held for sale
122,554
142,806
Cash and cash equivalents
287,584
259,229
1,145,389
993,850
2,029,523
1,863,558
Current assets
Total assets
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
16
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
Air Berlin PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
as of 31 March 2015
31/03/2015
31/12/2014
€ 000
€ 000
Equity and liabilities
Total equity
Share capital
Share premium
Equity component of convertible bond
Other capital reserves
29,273
29,273
435,085
435,085
597
597
217,056
217,056
(1,464,190)
(1,248,200)
Hedge accounting reserve, net of tax
(84,482)
(153,433)
Foreign currency translation reserve
5,424
3,654
(8,976)
(8,976)
Equity attributable to the shareholders of the Company
(870,213)
(724,944)
Equity attributable to the hybrid capital investors
315,274
(554,939)
(415,588)
Retained earnings
Remeasurement of the net defined benefit obligation
Total equity
309,356
Non-current liabilities
Interest-bearing liabilities due to aircraft financing
Interest-bearing liabilities
59,410
89,961
656,714
639,967
6,034
6,095
Trade and other payables
36,435
37,201
Deferred tax liabilities
21,132
23,817
Provisions
100
93
779,825
797,134
Interest-bearing liabilities due to aircraft financing
138,848
109,758
Interest-bearing liabilities
214,302
223,714
Negative market value of derivatives
Non-current liabilities
Current liabilities
3,198
3,266
35,402
42,350
Trade and other payables
511,888
446,290
Negative market value of derivatives
226,400
240,548
19,473
19,654
Tax liabilities
Provisions
Deferred income
655,126
396,432
Current liabilities
1,804,637
1,482,012
Total equity and liabilities
2,029,523
1,863,558
Advanced payments received
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
17
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
Air Berlin PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
for the period ended 31 March 2015
Share
capital
Equity
component
of convertible bonds
Share
premium
Hedge
accounting
reserve,
net of tax
Other capital Retained
reserves
earnings
€ 000
€ 000
€ 000
€ 000
29,273
435,085
597
217,056
€ 000
€ 000
Foreign
currency
translation
reserve
€ 000
Remeasurement of
the net
defined
benefit
liability
€ 000
Equity
attributable
to the shareholders
of the
Company
€ 000
Equity
attributable
to the hybrid
capital
investors
Total equity
€ 000
€ 000
Balances at
31 December 2013
Loss for the period
(862,175)
(5,904)
3,192
(3,188) (186,064)
0
(186,064)
(209,801)
0
(209,801)
(209,801)
Other comprehensive income
(3,354)
99
(3,255)
(3,255)
Total comprehensive income
0
0
0
0
(209,801)
(3,354)
99
29,273
435,085
597
217,056
(1,071,976)
(9,258)
29,273
435,085
597
217,056
(1,248,200) (153,433)
0
(213,056)
0
(213,056)
3,291
(3,188) (399,120)
0
(399,120)
3,654
(8,976) (724,944) 309,356
(415,588)
(215,990)
(210,072)
Balances at
31 March 2014
Balances at
31 December 2014
Loss for the period
(215,990)
5,918
Other comprehensive income
68,951
1,770
68,951
1,770
(84,482)
5,424
70,721
70,721
Total comprehensive income
0
0
0
0
(215,990)
29,273
435,085
597
217,056
(1,464,190)
0
(145,269)
5,918
(139,351)
(8,976) (870,213) 315,274
(554,939)
Balances at
31 March 2015
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
18
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
Air Berlin PLC
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
for the period ended 31 March 2015
Result for the period
31/03/2015
31/03/2014
€ 000
€ 000
(210,072)
(209,801)
11,012
17,674
Adjustments to reconcile profit or loss to cash flows from operating activities:
Depreciation and amortisation of non-current assets
(13,248)
(308)
(2,498)
(1,134)
Increase in trade accounts receivables
(73,812)
(126,352)
Increase in other assets and prepaid expenses
Gain on disposal of non-current assets
Increase in inventories
(70,183)
(20,919)
Deferred tax benefit
(2,585)
(3,791)
Decrease in provisions
(7,009)
Increase (Decrease) in trade accounts payable
24,878
(10,544)
(508)
291,892
324,372
Result on foreign exchange and derivatives, net
24,893
9,596
Interest expense
27,004
20,654
Increase in other current liabilities
Interest income
Income tax expense
Other non-cash changes
Cash generated from operations
Interest paid
Interest received
Income taxes paid
Net cash flows from operating activities
Purchases of non-current assets
Net advanced receipts for non-current items
(211)
(205)
475
225
1,406
99
1,942
(12,523)
176
174
(464)
(223)
(10,869)
(22,367)
(4,921)
(4,664)
2,502
4,361
Loans given
(4,000)
Proceeds from sale of tangible and intangible assets
72,526
Cash flow from investing activities
Principal payments on interest-bearing liabilities due to aircraft financing
(942)
(21,376)
0
31,775
66,107
22,750
(63,608)
(24,185)
29,131
0
Proceeds from issue of corporate bonds
0
76,125
Transaction costs related to issue of convertible bonds
0
Drawdown of interest-bearing liabilities due to aircraft financing
Cash flow from financing activities
Change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Foreign exchange revaluation on cash balances
Cash and cash equivalents at end of period
thereof bank overdrafts used for cash management purposes
thereof cash and cash equivalents in the statement of financial position
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
(34,477)
(2,333)
49,607
20,761
49,990
259,180
223,006
7,596
287,537
(47)
287,584
(49)
272,947
(52)
272,999
19
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
AS OF 31 MARCH 2015
(Euro/USD/CHF in thousands, except share data)
1. REPORTING ENTITY
The consolidated interim financial statements of Air Berlin PLC for the three months ended 31 March 2015 comprise
Air Berlin PLC (“the Company”) and its subsidiaries (together referred to as “airberlin” or the “Group”) and the Group’s
interest in associates. Air Berlin PLC is a company incorporated in England and Wales with its registered office in London.
The corporate headquarters of airberlin are located in Berlin. The Company’s ordinary shares are traded on the Frankfurt
Stock Exchange.
The Group financial statements as at, and for, the year ended 31 December 2014 prepared in accordance with IFRSs as
adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, are
available from the Company’s registered office and at ir.airberlin.com.
Statutory accounts for 2014 have been delivered to the registrar of Companies in England and Wales. The auditors have
reported on those accounts and their report (i) was unqualified, (ii) did not include a reference to any matters to which
the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under
section 408 of the Companies act 2006.
2. STATEMENT OF COMPLIANCE
These consolidated interim financial statements have been prepared in accordance with International Financial Reporting
Standard (IFRS) IAS 34 “Interim Financial Reporting” as adopted by the EU. They have been neither reviewed nor audited
and do not include all of the information required for full annual financial statements, and should be read in conjunction
with the consolidated financial statements of the Group as at and for the year ended 31 December 2014.
This condensed set of financial statements was approved by the Directors on 11 May 2015.
3. ACCOUNTING POLICIES AND CHANGES IN ACCOUNTING
This interim report up to 31 March 2015 has been drawn up in accordance with IAS 34 and in compliance with the standards
and interpretations applicable from 1 January 2015 as adopted by the EU. The Group has used the same accounting and
valuation methods as for the consolidated financial statements for the year ended 31 December 2014.
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after
1 January 2015. None of them have material impact on the Group.
4. ESTIMATES
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates. In preparing these consolidated interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of uncertainty related to
estimates were the same as those that applied to the consolidated financial statements as at and for the year ended
31 December 2014.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
20
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
5. SEASONALITY
The aviation industry is subject to seasonal fluctuations. Due to holiday travellers, the summer months generally show the
highest revenue from ticket sales. The Group attempts to minimise seasonal impacts by expanding the number of business
travellers. For the twelve months ended 31 March 2015 the Group had revenue of € 4,192,044 (prior year: € 4,116,723) and
result for the period after tax of € –376,939 (prior year: € -328,966). Furthermore, for the twelve months ended 31 March
2015 the EBIT amounted to € –270,838 (prior year: € -226,282).
6. NON-CURRENT ASSETS
During the three months ended 31 March 2015 the Group acquired fixed assets with a cost of € 14,281 (prior year:
€ 8,262). Assets with a carrying amount of € 879 were disposed of during the three months ended 31 March 2015 (prior year:
€ 880).
Capital commitments for property, plant and equipment amount to 0.4 bn USD (prior year: 3.3 bn USD).
Assets held for sale
Assets held for sale position includes seven aircraft which are expected to be sold by the Group. When publishing these financial statements all sales contracts have been signed and one transaction has been finally settled. The aircraft held for sale
were written down to their fair values less costs to sell, based upon sales contracts. Non-current liabilities relating to aircraft
financing of the aircraft held for sale have been classified to current liabilities.
7. SHARE CAPITAL
Of airberlin’s authorized share capital, 116,800,508 ordinary shares of € 0.25 each and 50,000 A shares of £ 1.00 each were
issued and fully paid up. Included in this amount are 177,600 treasury shares held by airberlin (through the Air Berlin
Employee Share Trust).
8. BONDS AND HYBRID CAPITAL
On 21 January 2014 the Group increased the aggregate principal amount of its bond placed on 19 April 2011 with a coupon
of 8.25% per annum from € 150,000 by € 75,000 to the aggregate principal amount of € 225,000 due for repayment in 2018.
The notes were issued at 101.50% of their principal amount. Transaction costs incurred were € 2,333. The bonds are measured at amortized cost.
On 27 April 2014 the group issued a perpetual bond to its shareholder Etihad Airways PJSC in the total amount of
€ 300,000. The drawdown of the bond was divided in three tranches each € 100,000 and was paid out at 20 May 2014,
28 August 2014 and 23 October 2014. The perpetual bond has no maturity and bears an interest coupon of 8.0 % per
annum. Interest coupons can be deferred indefinitely at the discretion of the Group. Settlement of all arrears of interest is
payable only in the event that Group declares or pays dividend or repurchases its own shares. The perpetual bond bears a
conversion right to convert the bonds into ordinary shares at a conversion price of € 1.79 per ordinary share. Conversion to
ordinary shares is at the discretion of the bond holder and can be exercised from the date of issue but is subject to the limitations imposed by the Articles of Association that the Group must at all times be controlled or majority owned by nationals of
the European Community or European Economic Area. As these is no obligation on Group to repay the capital and can indefinitely defer payments of interest until dividend is declared (which is at the discretion of the Group) the perpetual bond is
recognized as equity in the Group’s consolidated statement of financial position. An amount of € 15,274 was transferred from
retained earnings to hybrid capital to reflect the amount of interest payable in such an event, thereof € 5,918 in the reporting
period.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
21
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
9. REVENUE
In thousands of Euro
Flight revenue
Ground and other services
Duty-free / in-flight sales
1/15-3/15
1/14-3/14
706,869
683,925
81,368
72,641
5,453
5,234
793,690
761,800
airberlin recognizes ticket sales as income at the time when the transportation is provided. When the fare is for a round-trip
and the return flight has not yet been provided at the reporting date, the unearned revenue is deferred in the consolidated
balance sheet under “Advanced payments received” until such time the transportation is provided.
10. SEGMENT INFORMATION
The company is managed by the Board of Directors as a single business unit in one geographical area and one service. The
key figures and ratios presented to the Board of Directors in managing the company are: Result from operating activities, net
debt, revenues, passengers, yield and block hours. The financial measures are IFRS measures and are shown in the primary
statements. Resource allocation decisions are made based on the entire route network and the deployment of the entire fleet.
Revenues derive nearly completely from the principal activity as an airline and include flights, commissions, in-flight and
related sales that are generated in Europe. Since airberlin’s fleet is employed across its scheduled destinations on an as
needed basis all assets and liabilities are allocated to the one segment. The Board has also determined that there is no
reasonable basis of allocating assets and related liabilities, income and expenses to geographical areas other than Europe
or to individual groups of customers.
11. OTHER OPERATING INCOME
In thousands of Euro
Gain on disposal of long-term assets, net
1/15-3/15
1/14-3/14
13,248
308
147
624
3,265
2,142
16,660
3,074
In thousands of Euro
1/15-3/15
1/14-3/14
Fuel for aircraft
196,208
208,057
Airport and handling charges
170,934
156,946
Operating leases for aircraft and equipment
134,959
128,143
Navigation charges
52,909
50,343
Air transportation tax
32,415
30,844
Catering costs and cost of materials for in-flight sales
26,450
20,302
Income from insurance claims
Other
12. EXPENSES FOR MATERIALS AND SERVICES
Other
32,121
38,623
645,996
633,258
The expenses for operating leases for aircraft and equipment include expenses of € 31,801 (prior year: € 29,048) that do not
directly relate to the lease of assets.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
22
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
13. PERSONNEL EXPENSES
In thousands of Euro
Wages and salaries
Social security
Pension expense
1/15-3/15
1/14-3/14
118,724
105,448
13,261
10,794
9,580
9,197
141,565
125,439
14. OTHER OPERATING EXPENSES
In thousands of Euro
1/15-3/15
1/14-3/14
Repairs and maintenance of technical equipment
69,197
60,352
Sales and distribution expenses (incl. commissions)
27,509
26,186
Advertising
15,685
17,916
Expenses for premises and vehicles
10,502
10,734
Travel expenses for cabin crews
6,957
6,436
Bank charges
5,880
6,201
Training and other personnel expenses
6,378
5,317
IT related expenses
4,325
4,436
Insurance
3,377
3,722
Auditing and consulting fees
2,946
6,081
Allowances for receivables
951
1,133
Phone and postage
878
729
17,099
22,095
171,684
171,338
Other
15. NET FINANCING COSTS
In thousands of Euro
Interest expense on interest-bearing liabilities (incl. discounting)
Other financial expenses
Financial expenses
1/15-3/15
1/14-3/14
(27,004)
(20,655)
(588)
(486)
(27,592)
(21,141)
Interest income on fixed deposits
7
34
Interest income on loans and receivables
9
2
Other financial income
194
169
Financial income
210
205
Result on foreign exchange and derivatives, net
(24,893)
(9,596)
Net financing costs
(52,275)
(30,532)
Foreign exchange gains or losses result from actual exchange rate differences at the settlement date (realised gains or losses), from the revaluation of interest-bearing liabilities, interest-bearing liabilities due to aircraft financing and other financial
assets and liabilities which are to be settled in a foreign currency at the balance sheet date as well as from changes in the fair
value of derivatives. Realised exchange rate gains or losses not arising from interest-bearing liabilities and other financing
activities are reclassified to the various income and expense line items from which they arose within operating result.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
23
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
16. INCOME TAX AND DEFERRED TAX
Result before tax is primarily attributable to Germany. The income tax result for the period is as follows:
In thousands of Euro
1/15-3/15
1/14-3/14
(475)
Current income tax expense
(225)
Deferred income tax benefit
2,585
3,791
Total income tax result
2,110
3,566
17. FAIR VALUE HIERARCHY
The following table presents the group’s financial assets and liabilities that are measured at fair value at 31 March 2015.
In thousands of Euro
Level 1
Level 2
Level 3
Total
Assets
Derivatives classified held for trading
0
66
0
66
Derivatives classified hedge accounting
0
138,938
0
138,938
Total assets
0
139,004
0
139,004
Liabilities
Derivatives classified held for trading
0
588
0
588
Derivatives classified hedge accounting
0
225,912
0
225,912
Interest bearing liabilities (embedded derivative)
0
0
0
0
Total liabilities
0
226,500
0
226,500
The following table presents the group’s financial assets and liabilities that are measured at fair value at 31 December 2014:
In thousands of Euro
Level 1
Level 2
Level 3
Total
Assets
Derivatives classified held for trading
0
30
0
30
Derivatives classified hedge accounting
0
82,445
0
82,445
Total assets
0
82,475
0
82,475
Liabilities
Derivatives classified held for trading
0
393
0
393
Derivatives classified hedge accounting
0
240,248
0
240,248
Interest bearing liabilities (embedded derivative)
0
0
0
0
Total liabilities
0
240,641
0
240,641
Level 2 derivatives comprise forward exchange, interest rate and fuel price derivatives which have been fair valued using
option pricing models and the discounted cashflow method. Material input factors were forward exchange rates, interest
forward rates and fuel forward rates that are quoted in an active market. Level 2 interest bearing liabilities relate to an
embedded derivative of convertible bonds issued and have been valued using the volatility of the airberlin share, credit risk
of airberlin and interest forward rates.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
24
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
18. FINANCIAL INSTRUMENTS FAIR VALUE
The fair values of the financial assets and liabilities, the carrying amount disclosed and the relevant category as of 31 March
2015 are as follows:
In thousands of Euro
Trade receivables and other assets
Loans &
receivables
Held for
trading
440,479
0
Financial
Hedgeliabilities at
Accounting amortised costs
0
Financial
liabilities at
fair value
Total carrying
amount
Fair value at
31 March 2015
0
440,479
440,479
66
66
138,938
138,938
287,584
287,584
867,067
867,067
588
588
225,912
225,912
0
Derivatives classified as held for trading with
66
positive market values
Derivatives classified as hedge accounting
138,938
with positive market values
Cash and cash equivalents
287,584
66
138,938
Derivatives classified as held for trading with
588
negative market values
Derivatives classified as hedge accounting
225,912
with negative market values
Financial liabilities at amortised costs
1,167,197
Financial liabilities at fair value
1,167,197 1,170,939
0
Finance lease liabilities
79,306
0
0
79,306
78,377
47
47
Bank overdrafts used for cash management
47
purposes
0
588
225,912 1,246,550
0 1,473,050 1,475,863
19. CASH FLOW STATEMENT
In thousands of Euro
31/03/2015
31/03/2014
104
138
Bank balances
175,760
148,055
Fixed-term deposits
111,720
124,806
Cash and cash equivalents
287,584
272,999
Cash
Bank overdrafts used for cash management purposes
Cash and cash equivalents in the statement of cash flows
(47)
287,537
(52)
272,947
Cash and cash equivalents include restricted cash of € 110,887 as of 31 March 2015 (prior year: € 124,248).
20. RELATED PARTY TRANSACTIONS
The Group has related party relationships with its Directors, its associates and major shareholder.
Members of the Board of Directors control a voting share of 3.28 % of Air Berlin PLC (prior year: 4.31 %).
One of the non-executive directors, also a shareholder of the Company, is the controlling shareholder of Phoenix Reisen
GmbH. The Group had revenues from ticket sales with Phoenix Reisen GmbH of € 907 (prior year: € 1,023). At 31 March
2015, € 242 (prior year: € 89) are included in the trade receivables line.
In 2013 the Group received secured loans that are shown as interest-bearing liabilities from a major shareholder – Etihad
Airways PJSC. This loan was fully repaid in 2014. The outstanding amount at 31 March 2015 equals € 0 including accrued
interest. Relating to the loan interest expenses of € 0 have been accounted for in the income statement in 2015 (2014: €
1,833) Etihad Airways PJSC and airberlin cooperate in miscellaneous operative areas e.g. procurement and maintenance.
airberlin entered into a code-share-agreement with Etihad Airways PJSC. The Group purchased goods and services of € 2,582
(prior year: € 1,710) from Etihad Airways PJSC and sold goods and services to Etihad Airways PJSC of € 4,066 (prior year: €
1,450).
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
25
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
At 31 March 2015 € 14,145 (prior year: € 13,961) are included in the trade and other receivables line. The amount of € 273
(prior year: € 345) is included in the trade and other payables line.
During the year ended 31 March 2015 respectively 2014 the Group had transactions with associates as follows:
In thousands of Euro
2015
2014
THBG BBI GmbH
2,976
2,396
Interest Income
33
30
Revenue from services
35
0
Receivables from related parties
airberlin holidays GmbH
8
193
404
2,002
15
0
Receivables from related parties
1,892
2,555
Expenses for leasing
1,599
1,515
Receivables from related parties
Revenues from ticket sales
Expenses for marketing
E190 Flugzeugvermietung GmbH
IHY IZMIR HAVAYOLLARI A.S.
Receivables from related parties
0
304
Income from leasing
0
1,006
Receivables from related parties
1,761
17
Payables to related parties
4,859
2,825
Revenues from ticket sales
1,261
1,014
Expenses for miles
6,171
4,796
0
12
Topbonus Ltd
Ausocon Berlin Call Center GmbH
Receivables from related parties
Payables to related parties
Revenues
Expenses for call center activities
570
0
5
77
2,154
1,075
Transactions with associates are priced on an arm’s length basis.
21. SUBSEQUENT EVENTS
21 April 2015: airberlin cancels its membership in the Association of European Airlines (AEA).
24 April 2015: airberlin announces a realignment of the management team. In addition to his role as Accountable Manager,
Captain Oliver Lackmann is appointed to the newly created position of Chief Flight Operations Officer (CFOO), as of 1 May
2015 and is responsible for flight operations, crew planning and training as well was Operations Compliance & Safety Management and Aviation Security Management. Marco Ciomperlik, previously the Chief Restructuring Officer, will assume the
newly created position of Chief Production Officer (CPO) as of 1 May 2015 which includes responsibility for Hospitality including the future product strategy and operations along the entire service chain. This mainly includes the areas Airport
Operations, Cabin Crew, Guest Experience, Maintenance and Network Operations. He also has responsibility for the subsidiaries airberlin technik and Leisure Cargo. As of 1 June 2015, Julio Rodriguez is named the new Chief Commercial Officer
(CCO) responsible for Sales, Revenue Management and E-Commerce.
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
26
THE SHARE
DIRECTORS' REPORT
FINANCIAL STATEMENTS
22. EXECUTIVE DIRECTORS
Stefan Pichler
Chief Executive Officer (since 1 February 2015)
Wolfgang Prock-Schauer
Chief Executive Officer (until 1 Febraury 2015)
23. MANAGEMENT BOARD
Stefan Pichler
Chief Executive Officer (since 1 February 2015)
Wolfgang Prock-Schauer
Chief Executive Officer (until 1 February 2015)
Arnd Schwierholz
Chief Financial Officer (since 1 April 2015)
Ulf Hüttmeyer
Chief Financial Officer (until 1 April 2015)
Julio Rodriguez
Chief Commercial Officer (as of 1 June 2015)
Götz Ahmelmann
Chief Commercial Officer (until 1 May 2015)
Marco Ciomperlik
Chief Restructuring Officer (since 1 May 2014 until 30 April 2015)
Chief Production Officer (as of 1 May 2015)
Oliver Lackmann
Chief Flight Operations Officer (as of 1 May 2015)
Dr. Martina Niemann
Chief Human Resources Officer
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
27
FINANCIAL CALENDAR 2015
05 June 2015
Traffic figures May 2015
23 June 2015
Annual General Meeting Air Berlin PLC, London Heathrow
07 July 2015
Traffic figures June 2015
06 August 2015
Traffic figures July 2015
13 August 2015
Publication of Interim Report as of 30 June 2015 (Q2)
08 September 2015
Traffic figures August 2015
06 October 2015
Traffic figures September 2015
06 November 2015
Traffic figures October 2015
12 November 2015
Publication of Interim Report as of 30 September 2015 (Q3)
04 December 2015
Traffic figures November 2015
IMPRINT
REGISTERED OFFICE
OUTSIDE CONSULTANTS
CONCEPTION
The Hour House, 32 High Street,
Registrar
Strichpunkt GmbH, Stuttgart / Berlin
Rickmansworth, WD3 1ER Herts,
Great Britain
www.strichpunkt-desgin.de
registrar services GmbH
Postfach 60630
TEXT
INVESTOR-RELATIONSCONTACT
Frankfurt am Main
Frenzel & Co. GmbH, Oberursel
Visitors‘ address:
www.frenzelco.de
Investor Relations
Frankfurter Straße 84-90a,
Saatwinkler Damm 42-43
65760 Eschborn, Germany
13627 Berlin, Germany
Email: [email protected]
Auditors
KPMG LLP
One Snowhill
Snow Hill Queensway
Birmingham B4 6GH
Great Britain
Legal representative
Freshfields Bruckhaus Deringer
Bockenheimer Anlage 44
60322 Frankfurt/Main, Germany
AIRBERLIN INTERIM FINANCIAL REPORT AS OF 31 MARCH 2015
28