Slides
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1 Q1 2025 results 30 April 2025
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2 Record load factor in Q1 2025 EBIT improvement of USD 7 million year-on-year Net loss improvement of USD 15 million Key highlights in Q1 2025 Strong operating cash flow from USD 204 million Liquidity of USD 510 million at end of Q1 CASK decrease3% The transformation journey contributing USD 70 million in annual impact by the end of this year Improved results expected in Q2 and Q3 but slower longer-term booking trends due to economic uncertainty All business segments improving year over year
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33 Financials Ívar S. Kristinsson, CFO
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44 Record load factor in Q1 2025 Traffic figures – Q1 2025 vs Q1 2024 In percentages 7% 9% 3% 7% 21% -5% -6% -2% Available Seat KM Passengers all markets Passengers To market Passengers From market Passengers Via market Passengers Within Iceland Load Factor (ppt) all routes CO2 Emissions per OTK Cargo: Freight Ton Leasing: Sold Block Hours 3.6 ppt 54% Route network Cargo & Leasing
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5 5 Profit loss statement USD million EBIT improvement of USD 6.6 million All business segments achieved improved results EBIT USD million USD million Q1 2025 Q1 2024 Change Passenger revenue 214.0 198.9 15.2 Cargo revenue 21.1 20.7 0.4 Leasing revenue 28.6 19.3 9.3 Other operating revenue 22.8 20.1 2.7 Operating income 286.5 259.0 27.5 Salaries and salary related 92.2 94.5 -2.3 Aircraft fuel 62.1 64.1 -2.0 Other aviation expenses 60.6 54.6 6.0 Other operating expenses 94.4 81.1 13.3 Operating expenses 309.3 294.3 15.0 Depreciation and amortization -39.5 -33.6 -5.9 EBIT -62.3 -68.9 6.6 EBIT ratio -21.7% -26.6% 4.9 ppt EBT -59.3 -72.7 13.4 Net loss -44.1 -59.4 15.3 • Revenue increase driven by a 7% increase in the passenger network capacity and strong leasing revenue generation • More cost-efficient fleet, lower fuel prices and emission charges had a positive impact on results • Other operating expenses up by 16% mainly related to larger flight schedule and increased IROPs cost • Continued strong turnaround in the Cargo operation; EBIT USD 1.3 million • Leasing operation continues to deliver strong results with EBIT profit of USD 5.3 million 2024 2025 19 Cargo Leasing Icelandair total -72,116 -68,915 -68,891 -62,270 1,291 3,205 5,354 Route network +3,201 +1,272 +2,148 +6,621
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6 6 Lower fuel prices driving fuel cost reduction despite more production Effective fuel price 10% lower than in Q1 2024 Main changes in fuel cost USD million total year Fuel cost USD million Hedge contracts and ratios Overview ton (Hedge %, Strike Price $/mt) Fuel price USD per metric ton Q1 24 Q1 25 64.1 62.1 Q1 24 1.8 Prod. 9.4 Price 3.0 Hedge 2.6 EUA credit Q1 25 64.1 62.1 400 600 800 1.000 1.200 1.400 1.600 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Market price Effective price 42% Q2 25 39% Q3 25 33% Q4 25 33% Q1 26 21% Q2 26 19% Q3 26 42,350 49,000 24,850 20,700 21,000 23,900 $782 $754 $731 $698 Strike price $670$693 2022 2023 2024 2025
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7 7 RASK1 development Act ‘25 & ‘24 vs. Act ‘24 & ‘23 RASK USD cents Unit revenue (RASK) increased by 1% on higher load factor Record total passenger revenue for the first quarter ▪ RASK increased by 1% despite the benefit of early Easter traffic in March last year. ▪ The average yield was US 8.0 cents and decreased by 5% year on year ▪ Saga Premium demand continues to be strong with unit revenues increasing by 9% Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 -4,0% -8,0% -10,0%. 1.5% 1,0% 1RASK = Revenue per available seat kilometer in route network Softness in the to market and shift of focus to via resulting in lowering yields and RASK Q1 2024 Q1 2025 7,2 7,3 1% 2nd quarter in a row that results in positive year on year development
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8 8 CASK1 development Act ‘25 & ‘24 vs. Act ‘24 & ‘23 Focus on efficiency resulting in decreased unit cost Five consecutive quarter with lower year on year unit cots development • Most cost items showed positive trends in the first quarter • Continued investment in more fuel- efficient aircraft both 737 MAX and 321LR’s with positive CASK impact • Unit costs excluding fuel down 1% year on year. More production and efficiency gains outweighing inflationary pressures and labor cost increases • Lower fuel prices resulting in additional 2% year-on-year reduction in unit cost -2 -2 2 -1 -3 -2 -5 -2 Q1 2024 0 Q2 2024 Q3 2024 Q4 2024 Q1 2025 -5% -2% -2% -3% -3% 1Total operating and depreciation cost per available seat kilometer in the route network. CASK ex fuel Fuel CASK
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9 9 Total liquidity Breakdown in USD million Total liquidity USD 510 million at end of Q1 2025 Cash and marketable securities increased by USD 163 million during the first quarter Liquidity development Q1 2025 in USD million 150 302 105 116 92 92 31/12/2024 31/03/2025 347 510 +418 +255 347 205 25 Liquidity 31/12/2024 Net cash from operations Net Capex Financing activities and exchange rate fluctuations Liquidity 31/3/2025 19 510 +163 Undrawn revolving facilities Marketable securities Cash and cash equivalents
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10 10 Assets Assets USD 1.9 billion and equity ratio of 13% Equity and liabilities
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1111 Business update and outlook Bogi Nils Bogason, CEO
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1212 Over 60 gateways N-America, Europe, Greenland and Domestic 3x daily to seven destinations 2x daily to 15 destinations New destinations Nashville, Miami, Istanbul and Gothenburg Three connecting banks More frequency, better products, and increased partner connectivity Capacity growth of ~8% planned in the route network for 2025 with focus on spring and fall
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1313 Four new exiting destinations launched in 2025 Flight time 8:40 Hours : Minutes M I A MIAMI First flight Oct ´25 Mont Year Flight time 5:30 Hours : Minutes I S T ISTANBUL First flight Sep ´25 Mont Year B N A NASHVILLE Flight time 7:20 Hours : Minutes First flight Apr ´25 Mont Year G O T GAUTABORG Flight time 2:50 Hours : Minutes First flight Jun ´25 Mont Year
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1414 Q2 2025 Q3 2025 Q4 2025 Q2-Q4 2025 2nd bank started earlier than last year due to easter traffic No investment in additional peak capacity, but capacity share is increasing as other airlines reduce capacity Q4 growth realized through better utilization of the new and more fuel-efficient A321 aircraft, which create new opportunities Icelandair monitors market volatility closely and will adapt capacity to demand as required +5% -4% +1% 0% Other airlines Total market Icelandair Chg. y-o-y -2% -4% -5% -4% 7% 6% 4% Icelandair’s hub position strengthening
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15 15 Strong commercial infrastructure key in adjusting to dynamic operating environment The Saga Premium product Demand for Icelandair’s Saga premium product continues to be strong Saga Premium unit revenues increasing by 9% year-on- year Strong international brand Icelandair is well known brand in international markets The brand is associated with Iceland, transatlantic travel experience, and value-for- money service The Saga Loyalty Club Saga Club loyalty program ~ 2 million members - key for customer retention and future revenue generation ~20% of trips from Iceland paid partially with points Valuable strategic airline partnerships Partnership agreements include JetBlue, Alaska Airlines, Finnair, SAS, Turkish Airlines, Air Baltic, Air Greenland, Atlantic Airways, ITA, Tap Air Portugal, Emirates, and Southwest Numerous SPA and interline agreements with other airlines
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1616 ONE, our holistic transformation program launched last year to improve efficiency is progressing well >400 Ideas scheduled for implementation 90 Initiatives with annual gain over USD 40m successfully implemented by end of Q1 2025 USD 70m Expected annual gain by the end of 2025
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1717 • Icelandair will operate 42 passenger aircraft in its route network this summer, the same number as last year • Thereof, four new Airbus A321LR and 21 Boeing 737 MAX aircraft • Modernization of Icelandair’s fleet in recent years brings significant benefits in operational efficiency and sustainability • New long-range narrow-body aircraft will unlock opportunities for the Icelandair route network
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1818 New narrow-body aircraft to replace the widebody fleet before 2030 Will support the expansion of the route network • Following a strategic review, Icelandair has decided to phase out the operation of wide-body aircraft • This decision aligns with Icelandair's core strategy and key competitive advantage - the ability to operate economical narrow- body aircraft further east and west than its competitors via Iceland • Strengthens Iceland's future growth as a tourist destination and a key connecting hub between Europe and North America • Icelandair currently operates three B767, which are expected to remain in service until autumn 2029
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1919 Continued improvement in the cargo operation and leasing business performing well • Performance of the cargo operations is improving built on the strong turnaround in last year with positive outlook in the coming months • Strong performance of the leasing business is expected to continue this year, as outlook remains promising
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2020 Financial outlook • Q1 2025 financial results were in line with management expectations • Stronger booking status for the coming months in the markets to and from Iceland • Performance of the cargo operations is improving, built on the strong turnaround in the last year, with positive outlook in the coming months • Strong performance of the leasing business is expected to continue this year, as the outlook remains promising • Profitability for the second and third quarters is expected to improve compared to last year • Economic volatility has caused increased unpredictability, reflected in slower bookings into the fall and winter • The Icelandic Krona has strengthened against the US Dollar, negatively impacting the competitiveness of Icelandic export industries • A full year’s guidance will not be reaffirmed at this time
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2121 Key takeaways • Profitability in the second and third quarter is expected to improve year-on-year • Icelandair is focusing on the areas of the business it can control where good progress has already been made • Icelandair’s transformation journey will continue to support operational efficiency, and is expected to deliver annual gain of USD 70 million by the end of the year • Icelandair will monitor market developments closely and will use its flexible route network to adapt capacity to demand as required • Strong commercial infrastructure such as the Icelandair brand, the Saga Premium product, the Saga Club, and strong airline partnerships will be key in adjusting to a dynamic operating environment and support revenue generation
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2222 Q&A
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2323 Disclaimer | This material has been prepared by Icelandair Group hf. Unless stated otherwise all information is sourced by Icelandair Group hf. | The circulation of the information contained within this document may be restricted in some jurisdictions. It is the responsibility of the individual to comply with any such jurisdictional restrictions. | Forecasts, by their very nature, are subject to uncertainty and contingencies, many of which are outside the control of Icelandair Group. Past performance should not be viewed as a guide to future performance. Where amounts involve a foreign currency, they may be subject to fluctuations in value due to movements in exchange rates. | Icelandair Group cannot guarantee that the information contained herein is without fault or entirely accurate. The information in this material is based on sources that Icelandair Group believes to be reliable. Neither Icelandair Group nor any of its directors or employees can however warrant that all information is correct. Furthermore, information and opinions may change without notice. Icelandair Group is under no obligation to make amendments or changes to this presentation if errors are found or opinions or information change. Icelandair Group accepts no responsibility for the accuracy of its sources or information provided herein and therefore can neither Icelandair Group nor any of its directors or employees be held responsible in any way for the contents of this document. | This document must not be construed as investment advice or an offer to invest. | Icelandair Group is the owner of all works of authorship including, but not limited to, all design, test, sound recordings, images and trademarks in this material unless otherwise explicitly stated. The use of Icelandair Group´s material, works or trademarks is forbidden without written consent except where otherwise expressly stated. | Furthermore, it is prohibited to publish, copy, reproduce or distribute further the material made or gathered by Icelandair Group without the company‘s explicit written consent.