Finnair Oyj

I warmly welcome you to the 4th year of Finnair's income information. The interim CEO, Jaakko Schilt, will present the results. After that, we will take questions from both the audience and the lines.

Have a good one, Jaakko. Thank you, Päivyt. Welcome, everyone, and have a good day. We have good news for you today. The presentation will go through, as Päivit said, the fourth quarter, and also the results of the 2020-2023 year. Our note is that we had a really good decision for the year 2023. We had a strong market, and also our own internal strategy and operations carried us to a really good end result. In the last quarter of the year, The turnover increased by 5.8% and the turnover reached 23 million euros. We are still in a good unit profit market, about 20% higher than in 2019. Our capacity was 17% lower than in 2019. I will return to the capacity issue later when we discuss our guidance and go into detail about what our capacity is and what kind of thoughts we have about it. Our usage levels were good for the majority of the network. In Europe, we did not see a single good usage level, but we will return to that later today. Difficult conditions made it difficult for us, especially in December. We had record colds and also snowstorms. They clearly affected the accuracy of our flights and also part of the customer experience. In the big picture, however, I am satisfied with how we managed these emergency situations. Let's look at the year 2023. We have a lot of knowledge and strategy work to do. In 2023, we got the entire aircraft capacity to be used. Due to the crisis, we were left with an excess of A330 aircraft. and our Qatar cooperation was able to use these machines, and the cooperation continued. The new cooperation is with Quantax in Australia. These have given us a lot of wind in terms of usage levels. In addition, during the year, we purchased nine aircraft, which significantly affected our costs. We will come back to this later today, when we take a closer look at the table, in more detail, what we did there. We have to pay great attention to the fact that at the moment, we no longer have our own primary tax instruments in our table. And we were able to significantly reduce our debt this year. And it could be time to say that Finnair has survived the double crisis. Let's take a closer look at the results in a moment. We are in a really good situation. In addition, we have been able to boost, as we have said, cost savings, to increase cost savings, to maintain cost savings, and also to boost our revenue, our profits, and also sales costs. Of all of these joint effects, Our comparative profit margin was set at 6.2, which is a very good result, and we are very satisfied with it. Let's go back to quarter four and see what happened there in quarter four. The business environment is still positive. Markkinoilla on rajallisesti kapasiteetti jo. Me ollaan pystytty pitämään yksikkötuotot ylhäällä. Tämän lisäksi meidän myyntitoimenpiteet ovat pitäneet meidät hyvässä tulosvauhdissa. Rahtipuolella me ollaan nähnyt tuottojen pienentymistä. Tämä isossa kuvassa on itse asiassa positiivinen viesti, koska siitä näemme, että lentomarkkina on palautumassa normaalimmaksi kriisin jälkeen. because the prices of aircraft carriers and unit production have been exceptionally high for nearly the entire crisis period. I am particularly proud of the fact that consumption control has succeeded well in Finnair. Consumption control is one of the basic quality factors that keep the company running in all cycles, both up and down. In addition to these, we have We have a writing technical thing about our tax losses, and there is a 135 million-dollar rate difference, which affects the quarter quarter 4 results. In conclusion, the profit margin was 6.2%, which is a very good performance. I would probably comment on the other lines in this column. The other profits of the business have decreased in 2023 compared to 2022. The special note is that we have done less of this VET lease, and due to that, the other profits of the business have decreased, but the profits can be seen on the revenue line on the other line. Let's look at the history. On this slide, we show Finnair's results from the year 2014 onwards. And here we can clearly see how good a result we made in 2020-2023. We have recorded the fiscal years 2017, 2018 and 2019. We are on a slightly better level with this year's results. And here, as a result of the year, that 254 million, so I remember that there is a little over half of that 135 million we have this tax-related matter. But this is a very, very good result. And perhaps with my attention, Vaikka olen erittäin hyvin tietoinen 2021 ja 2022 vuosien tuloksesta, mutta taas kerran kun näen ne tässä palkkeina, niin kyllä ne on ollut vaikeat vuodet ja on erittäin hienoa olla tänään tässä tilanteessa toteamassa, että tulos on tällä tasolla ja me olemme selvinneet kriisistä. Mennään takaisin neljänteen neljännekseen. This waterfall is our cash flow. Let's look at the picture on the left, where the operating cash flow is minus 6 million. And this is one where there is no reason to worry, even if the number is negative, because typically in the fourth quarter, flights are flown, tickets have been purchased earlier and then they are flown in the fourth quarter, so this is a very typical matter related to the change of seasons. And then on the right side, we have this 568 million, which is our annin, osakeannin tulos. Ja sitten annin seurauksena me olemme merkittävästi pystyneet vähentämään YD velkataakkaa. Katsotaan koko vuotta seuraavalla kalvolla. Muutos on ollut todella merkittävä. Ja Kortali 4 pystyimme lisäksi ja ostimme kuusi kapea runkokonetta, jotka taas antavat meille hyvää kustannusten muodossa. At the end of the quarter, the cash flow is 922 million, which is a good, almost normal level for our company. Then let's look at the whole year. In this waterfall, I especially want to pay attention to the strong operational cash flow of 472 million euros. And this is the kind of thing that has really helped us in our recovery. And then on the other hand, we also see here, from the previous slide, the familiar 568 million, our, 568 million, our share price. And as a whole, we have been able to reduce our debt burden by 1.2 billion, which is a really, really significant amount. Of course, this whole thing is a sum of many factors. We have strictly followed our strategy, and we will continue to do so, plus the fact that the external market and our unit profit is at a good level. Let's go back to the table. Here are the indicators of the level of ownership and net debt. I am particularly proud of how this trend is developing. Both indicators are developing in the right direction. If I look at our powerful cash flow in the future, I am positive that this trend will continue. We set goals in connection with the stock market. We set a target for the profit margin. We set a target for net profit, divided by net profit with EBITDA, cash reserves from the profit exchange and shareable funds. Well, we haven't set a target for shareable funds, but for the first three. And now the important thing here is that our target was 6% in the profit margin, and we are a little better at the moment. Ja meidän oma arviomme oli, että me oltais noin vuoden, puolentoista vuoden päästä tässä tilanteessa. Mikä on erittäin hyvä suoritus, että me ollaan tässä tilanteessa. Ja on mukava kertoa teille tätä viestiä tänään tästä. Seuraavassa meidän tavoitteessa me ei olla ihan vielä siellä, mutta trendi on erittäin positiivinen. Me nähdään kuvaajasta, että se on mennyt oikeaan suuntaan. Ja kassavaroista me ollaan niin lähellä, että voisin jopa sanoa, että me ollaan siellä meidän tavoitteessa. Ja me ollaan tällä performanssilla, sillä trackilla, että me pyritään palauttamaan varojenjako-kyvyn. from the year 2025 onwards. These are, in my opinion, very good news for the markets and our owners. How do we proceed from here? Operative quality, safety, regularity, accuracy, our customers will still be in our focus. Nidevaraa perustettiin, rakennettiin Finnairia niin kriisin aikana, kun nyt kriisistä selvittäessä. Kannattavuus, me ollaan päästy takaisin kiinni kannattavuuteen. Ja me jatketaan suurella pieteetillä meidän strategian toteutumista ja varmistetaan, että meidän kannattavuus säilyy. Meille tulee lisää kapasiteettia ensi vuonna, palataan siihen vielä myöhemmin, anteeks tänä vuonna. Se on erinomainen asia, koska me pystytään tekemään se kapasiteetin kasvatus erittäin vastuullisesti käyttämällä meidän omaa laivastoa enemmän. For example, by taking four machines from British Airways and Vetlease to our own production. In addition, we will have one new A350 machine, but it will come at a very late stage at the end of 2024, so it won't affect our capacity this year. Views and guidance for the future. Guidance is good tradition according to our policy. Ehkä haluaisin kiinnittää huomion tähän, että Finnair suunnittelee lisäävänsä kokonaiskapasiteettia yli 10 %. Liikevaihdon odotetaan kasvavan kapasiteettia jonkin verran hitaammin vuonna 2024. Haluaisin avata, mitä tämän takana on. Kapasiteetin kasvu tulee kahdesta asiasta. Siitä, että me ollaan saatu meidän partnerinten kanssa sopimus, ja A330-koneet menee tehokkaaseen käyttöön. to Australia, and then we take the machines in the wet lease from BA for our own use and use the entire fleet more efficiently. This approach and the guidance that is given is a very responsible approach to it. If we compare, for example, the unit yield of the fourth quarter of 22 years, to this year's unit production, in 2022, the unit production was at a very high disadvantage. We don't see that the unit production would be decreasing, but it is very responsible to estimate that at such a highly increased level, they will not stay at full capacity. Tässä oli tämä esitys kokonaisuudessaan. Sitten varmasti annan vuoron Päivytille.

Nyt olisi sitten vuoro kysymyksille, joita saa mielellään esittää täältä salista, tai sitten ilman muuta myöskin täältä linjoilta. Täällä on yksi kysymys linjoilta tulossa. Finnair, what new sites have been added to Finnair's network?

We have added new sites. In Europe, at least in Poland, we have ROCLAV. Then we have TARTO. We have also added sites in Northern Norway. We talked about them earlier. I don't remember them exactly, because the information came out. In addition, well, it's not a new site, but in the summer, we'll start with Tanago.

Clear. Are there any questions from the audience? There are no other questions on the lines at the moment. We are still waiting for a moment. Sometimes it takes time for the questions to come through. Eero, you are welcome. Let's take the microphone from there so that the questions can also be heard on the lines.

The Ministry of Transport has quietly disclosed certain ideas about the arrangement of airfields. Four countries have been taken as models. Ruotsin, Norjan, Puolan ja Kreikan mallit. Onko Finnair ehtinyt nyt ottaa kantaa näihin? Esimerkiksi siinä se Norjan malli näyttäisi hajauttavan kansainvälistä liikennettä myöskin niin sanotulle kakkos-kolmoskentille. Meidän tapauksessa varmaankin Turku, Tampere, Oulu.

Well, we don't have an opinion on these airport arrangements. Finnair starts with the fact that we fly to the destination and to the airport, if it is a profitable business. And we don't have an opinion on which order the airport has been arranged.

Next question from the lines. How do you expect the price of the tickets to develop? Will the price of the tickets slow down?

My estimate is that the price of flight tickets will remain this way. We do see that due to environmental factors, we will have an increase in the price of flight tickets. Various solutions related to environmental activities will increase the price of the tickets.

What does the question of holiday traffic look like at the moment?

Oman Liikenteen kysyntä näyttää oikein hyvältä. Suhtaudun oikein positiivisen mielin tulevaan kesään.

Vielä linjoilta kysytään. Finnair on uudistanut Kanta-asiakasohjelmaansa. Millaista on ollut palaute tasoasiakkailta?

The feedback has been good. Of course, the customer service program is not yet in use. We are coming in March. We are coming live with the customer service program. We have a lot of other good things. It is good to be in a situation where the company is profitable. We have good things coming to the customer. This spring, we will get our wide-ranging machines. Matkustamon uudistusohjelma valmiiks. EE90 Embraer koneitten matkustamot uudistetaan. Ensimmäiset on valmiina tänä vuonna. Helsinki-Vantaalle tulee uusi lounge. On paljon hyvää tavaraa putkessa myöskin asiakasrajapintaan. Se on kyllä hyvä, että pystytään tähän satsaamaan, koska on kannattavuus.

Kanta-asiakasohjelman uudistukset eli ohjelman muuttuminen ostosummaan perustuvaksi ja avios Kanta-asiakasvaluutan käyttöönotto astuvat voimaan nyt maaliskuussa. Will night flying increase, as it has been said that, for example, the summer temperatures of the Mediterranean countries cause problems for the field, of course, due to the climate warming challenges?

Well, we have a powerful traffic program in Finnair. We increase the level of use like this, and the day is 24 hours, and when the use is increased, some flying may also increase at night.

Good. Is it from here? Jari, you are welcome.

Unless the new 350 comes, what kind of usage has been thought of for it? Probably 25. And then this 10% and the increase in capacity, where does it show? Will there be more frequency or new targets?

Let's answer the 350 first. We have good selection targets at the moment. We have already told that Nagoya will be added to 24. and we have long-list and short-list targets. We are also looking at China, what is happening there, because after the pandemic, the business has not yet recovered, but I would think that new targets are probably not in the news. With the current targets, we see that we can then train them. Capacity growth of 10% comes especially from the fact that we have Tänä vuonna on ollut tilanne, että koko laivasto ei ollut tehokkaassa käytössä. Me saadaan kaikki koneet käyttöön ja vielä tehokkaampaan käyttöön. Se on se suuri juttu.

Onko vielä? Miikka, ole hyvä.

Kiitos. Otit esille tuon E109-uudistuksen. Onko siitä tarjolla jo lisätietoja? Tuleeko penkkejä lisäksi mahdollisesti nettiyhteyttä myös Embraer-laivastoon? Koska kerrotaan lisätietoja tästä hankkeesta?

Ei ole suunnitelmissa lisätä nettiyhteyttä. Koneet on sen ikäisiä ja normaalia elinkaarihallintaa, että laitetaan sinne uudet matkustamat. Kerrotaan sitten tarkemmin, kun meillä on aikataulua. Asiakkaat kyllä varmasti tulee huomaamaan tämän uudistuksen. Se on erittäin positiivinen juttu.

Are there any more questions from the audience? The questions on the lines seem to be running out. Of course, we still have time for the last questions, if you're in a hurry. In any case, thank you to all the participants. Thank you, Jaakko, and I wish you all a very good rest of your day.

Thank you to the participants.