Results – 3Q17 November 8, 2017 #NOVAGOL
3Q17 Highlights Net operating revenues: R$2.7 billion Indicators 3Q17 Var. x 3Q16 (+13.2% vs. 3Q16) ASK (BN) 12.0 4.5% Operating result of R$327 million and Traffic (000) 8,303 2.2% EBIT margin of 12.0% RPK (BN) 9.6 5.1% Net income: R$328 million and Load Factor 80.2% +0.4 p.p. margin of 12.1% Yield (R$ cents) 24.85 +8.6% EPS: R$0.94/share | US$1.49/ADS Pax Revenue (R$ MM) 2,395 +14.1% Aircraft utilization: 12.3 block RASK (R$ cents) 22.62 +8.3% hours/day (+7.4% vs. 3Q16) CASK (R$ cents) 1 19.90 +5.0% Net Debt 2 /LTM EBITDA: 3.4x 2 1. Excluding non-recurring results 2. Excludes perpetual bonds (R$ 420.0 million)
Capacity and Network Rationalization RPK (MM) Number of 18.5% Flights/Day Operating Aircraft 9.6 9.2 (average) 8.1 +5.1% 9.0% 694 680 116 116 116 637 3Q16 2Q17 3Q17 ASK (MM) 2.0% 15.0% 12.0 11.5 10.4 4.5% 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 3
The Most Competitive Airline in Brazil 1. Brazil’s lowest cost for 16 years : 2. Brazil’s best customer experience : - Most on-time service - Single fleet of 120 B-737 (120 MAX 8 orders) - MAX 8 is ~15% more fuel efficient (x 800 NG) - Most comfort and leg room - Lean and productive operations (best utilization) - Most convenient flight network for businesses - Lowest fixed costs 21% - Wi-Fi & on-board entertainment - Best-in-class maintenance lower CASK 1 than - #1 loyalty program closest airline 4. Brazil’s market leader : 3. Brazil’s most profitable airline: - Leader in main airports (66% total domestic traffic) - 9.3% operating (EBIT) margin (9M17) - Strong brand - 3.4x Net debt 2 /LTM EBITDA (3Q17) - Continuous innovation: #NOVAGOL - Highest productivity: 288MM ASK/aircraft (9M17) - 36% market share (September/17) 9M17 Productivity & efficiency 1,558 PAX/employee; 2,257 ASK/employee 4 (1) Information published by companies for 2016 (stage-length adjusted). (2) Excludes perpetual bonds (R$ 420.0 million).
Best Customer Experience Most on-time departures (95.4%) and best flight completion (98.4%) Best flight network Innovation (#NOVAGOL): selfie check-in Premium lounge Fleet with: GOL Online: internet access and complete entertainment platform Ecological leather seats: more comfortable and modern 5
2017 Full Year Guidance Revision Indicator 2017 Previous 9M17 (actual) 2017 Revised 116 1 115 115 Average operating fleet 0% to -2% +/- 0.5% Variation in capacity vs. 2016 (ASK) -0.1% -3% to -5% +/- 2% Variation in capacity vs. 2016 (Seats) -5.7% Variation in volume of departures (vs. 2016) -3% to -5% + /- 4% -6.0% 77% to 79% +/- 79% Average load factor 79% +/- R$10 +/- R$10.3 Net Revenues (R$ billion) R$7.6 CASK-ex fuel (R$ cents) +/- 14 +/- 13.7 14.1 +/- R$1 +/- R$1 Aircraft Rent (R$ billion) R$0.7 12% to 14% +/- 14% EBITDA margin 13% Operating (EBIT) margin 7% to 9% +/- 9% 8% 347.2 347.7 Fully-diluted shares outstanding (million) 347.7 Earning per share – fully diluted 2 R$0.38 to R$0.52 R$0.80 to R$0.90 R$0.04 Fully-diluted ADS outstanding (million) 69.4 69.5 69.5 Earning per ADS – fully diluted 2 US$0.57 to US$0.78 US$1.25 to US$1.40 US$0.06 Net Debt / LTM EBITDA +/- 4.2x +/- 3.4x 3.4x 3 (1) Fleet of 120 aircraft at the end of September 2017 (four of them are sub-leased to another airline). (2) After participation of minority interest in Smiles S.A. (3) Net Debt of R$4,492 MM, excluding perpetual bonds , and LTM EBITDA of R$1,268MM (as of September 30, 2017) 6 Downside risks: Q4 fares, external shocks, or capacity growth
Solid September Quarter 17.0% recurring EBITDA margin and 12.0% recurring operating margin, up 3.7 p.p. and 2.9 p.p., respectively, above 3Q16 margins. Fifth consecutive quarter reporting positive operating profit Reduction in net debt 1 of R$523 million (R$4.3 billion in 3Q17) vs. 2Q17 September Quarter 2017 Recurring operating (EBIT) margin 12.0% (up 2.9 p.p.) Ancillary revenue (cargo and other) and change q-o-q 11.9% of Total Rev. (down 0.7 p.p.) Passenger unit revenue (PRASK) change quarter over quarter Up 9.2% Fuel price (change q-o-q ) | Average exchange rate to US$ R$1.99 (up 1.7%) | R$3.16 CASK ex-fuel (excluding non-recurring expenses) change q-o-q Up 7.1% GOL System capacity (ASK) change quarter over quarter Up 4.5% GOL System capacity (Seats) change quarter over quarter Up 2.4% 7 1. Excludes perpetual bonds (R$ 420.0 million)
Load Factor and Forward Bookings 2015 2016 Chg. (pp) 2016 2017 Chg. (pp) Jan 83% 82% -1 Jan 82% 83% +1 Feb 76% 76% 0 Feb 76% 78% +2 Mar 74% 73% -1 Mar 73% 76% +3 Apr 79% 76% -3 Apr 76% 79% +3 May* 76% 75% -1 May 75% 77% +2 Jun 76% 75% -1 Jun 75% 78% +3 Jul 83% 83% 0 Jul 83% 82% -1 Aug 76% 78% +2 Aug 78% 78% 0 Sep 76% 78% +2 Sep 78% 80% +2 Oct 75% 76% +1 Oct 76% +4 Nov 73% 78% +5 Nov 78% +1 Dec 77% 79% +2 Dec 79% +2 8 (*) New network rolled out in May 2016
Profitability (EBITDA) | 3Q16 vs 3Q17 CASK 1 EBITDA 1 RASK (R$ cents) (R$ cents) (R$ million) +0.2% 463.2 5.82 5.81 +8.3% +5.0% 319.8 17.0% 22.6 3Q16 3Q17 19.9 19.0 Fuel CASK 1 13.3% 20.9 EBITDA Margin 1 3Q16 3Q17 CASK Ex-fuel 1 +7.1% 3Q16 3Q17 3Q16 3Q17 9 (1) Recurring
Net Financial Results Financial Income (R$ MM) 297.2 Net Financial Results: 261.8 3Q17: income of R$29 MM 242.2 1 3Q16: expense of R$101 MM 3Q16 3Q17 Reduction of short and long-term Financial Expense debt (R$ MM) 362.7 268.5 33.4¹ (1) Exchange and monetary variations 3Q16 3Q17 10
Net Income Composition (R$ MM) Excluding minority interest Minority Deferred Maintenance interest income tax materials and (94) +328 repairs Fuel Net financial Net +202 F/X Gains costs results revenues +14 (64) (ex-FX) (31) +37 Other +278 Aircraft operating (148) rent expenses +317 (0.9) 3Q16 Net income 3Q17 Net income Net margin: -0.04% Net margin: 12.1% 3Q17 EPS: R$0.94/share US$1.49/ADS 11
Operating Cash Flow Generation 25% year-to-date quarter 20% Operating Cash 15% 21.7% Flow Margin 10% 14.4% 5% -0.2% 0.5% 0% 9M16 9M17 3Q16 3Q17 -5% 9M16 9M17 3Q16 3Q17 in R$ million Operating cash flow 37.1 1,090.5 (5.2) 588.6 390.0 (454.8) (52.8) Investing cash flow (201.0) Financing cash flow 2 (1,577.9) (440.1) (241.1) (40.0) Net increase (decrease) in cash and cash (1,150.7) 195.6 (299.1) 347.6 equivalents Total liquidity 1 1,829.1 1 2,118.1¹ 1,829.1 1 2,118.1¹ 12 (1) Consolidated cash, cash equivalents and account receivables beginning in 2016. (2) Includes foreign exchange variation on foreign subsidiaries.
Liquidity and Leverage Liquidity 1 (R$ MM) Interest Coverage (R$ MM) 2 2 Total Liquidity + Deposits Liquidity / LTM Net Revenues LTM EBITDAR LTM EBITDAR / Interest Exp.+Rent LTM EBITDA / Interest Exp. 26.9% 26.3% 25.9% 1.7x 1.5x 1.0x 1.3x 1.2x 0.9x 2,759 2,589 2,574 2,102 2,099 2,028 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 Balance Sheet Short Term Debt (R$ MM) Short Term Debt Liquidity / Short Term Debt Net Debt (ex-Perp) Net Debt (Ex-Perp) / LTM EBITDA 3.6x 5.6x 2.4x 2.5x 4.2x 3.4x 728 743 4,868 4,773 586 4,345 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 13 (1) Cash, equivalents, short term investments, restricted cash and receivables (2) Includes operational deposits (maintenance / lease deposits)
Coverage and Liquidity Historical 3Q16 4Q16 1Q17 2Q17 3Q17 Balance Sheet Items (R$ MM) Total Debt 6,346 6,379 6,091 6,217 5,921 Off Balance Debt (Minimum Payment Operating Leases) 6,454 6,247 5,791 5,579 5,133 Capitalized Leases (7 x Rent) 8,776 6,979 6,402 6,090 5,831 Adjusted Total Debt 1 15,122 13,358 12,493 12,307 11,752 Adjusted Total Debt 1 excluding Perpetuals 14,697 12,929 12,073 11,869 11,332 Total Liquidity 2 1,829 1,922 1,517 1,771 2,118 Total Liquidity 2 + Operational Deposits 3 2,589 2,679 2,261 2,574 2,759 Net Debt Ex-perp 4 4,773 4,789 4,976 4,868 4,345 Adjusted Net Debt ex-perp 1,4 13,549 11,767 11,379 10,958 10,176 Leverage Adjusted Total Debt 1 / Capitalization (Market Value) 87% 89% 81% 82% 72% Total Debt / Capitalization (Market Value) 75% 80% 68% 70% 56% Net Debt 4 / LTM EBITDA 6.1x 4.6x 5.7x 4.6x 3.8x Net Debt excl-Perp 4 / LTM EBITDA 5.6x 4.2x 5.2x 4.2x 3.4x Coverage LTM EBITDAR / Interest Expense + Rent 1.0x 1.2x 1.1x 1.2x 1.3x LTM EBITDA / Interest Expense 0.9x 1.5x 1.2x 1.5x 1.7x Liquidity Liquidity 2 / LTM Net Revenue 19% 19% 15% 18% 21% Liquidity 2 + Deposits 3 / LTM Net Revenue 26% 27% 23% 26% 27% (1) Adjusted total and net debt includes Capitalized Leases (7x Rent) (2) Liquidity includes cash, equivalents, short term investments, restricted cash and 14 receivables (3) Including Maintenance and Lease Deposits (4) Includes cash, equivalents, short term investments and restricted cash
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