Deutsche Bank Aircraft Leasing Conference
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Deutsche Bank Aircraft Leasing Conference AerCap Holdings N.V. September 14 , 2021 D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Disclaimer Incl. Forward Looking Statements & Safe Harbor
This presentation contains certain statements, estimates and forecasts with Further information regarding these and other risks is included in AerCap's
respect to future performance and events. These statements, estimates and annual report on Form 20-F and other filings with the United States Securities
forecasts are “forward-looking statements”. In some cases, forward-looking and Exchange Commission. In light of these risks, uncertainties and
statements can be identified by the use of forward-looking terminology such assumptions, the future performance or events described in the forward-
as “may,” “might,” “should,” “expect,” “plan,” “intend,” “estimate,” “anticipate,” looking statements in this presentation might not occur.
“believe,” “predict,” “potential” or “continue” or the negatives thereof or
variations thereon or similar terminology. All statements other than statements Accordingly, you should not rely upon forward-looking statements as a
of historical fact included in this presentation are forward-looking statements prediction of actual results and we do not assume any responsibility for the
and are based on various underlying assumptions and expectations and are accuracy or completeness of any of these forward-looking statements. Except
subject to known and unknown risks, uncertainties and assumptions and may as required by applicable law, we do not undertake any obligation to, and will
include projections of our future financial performance based on our growth not, update any forward-looking statements, whether as a result of new
strategies and anticipated trends in our business. These statements are only information, future events or otherwise.
predictions based on our current expectations and projections about future No warranty or representation is given concerning such information, which
events, including the impacts of, and associated responses to: the Covid-19 must not be taken as establishing any contractual or other commitment binding
pandemic; our ability to consummate the proposed GECAS transaction; our upon AerCap Holdings N.V. or any of its subsidiaries or associated companies.
ability to obtain requisite regulatory and shareholder approval and the
satisfaction of other conditions to the consummation of the proposed GECAS In addition to presenting financial results in conformity with U.S. generally
transaction; our ability to successfully integrate GECAS' operations and accepted accounting principles (“GAAP”), this presentation includes certain
employees and realize anticipated synergies and cost savings; and the non-GAAP financial measures. Reconciliations of such non-GAAP financial
potential impact of the announcement or consummation of the proposed measures are set forth or referred to in the presentation where relevant. Non-
GECAS transaction on relationships, including with employees, suppliers, GAAP financial measures should be considered in addition to, not as a
customers and competitors. There are important factors that could cause our substitute for or superior to, financial measures determined in conformity
actual results, level of activity, performance or achievements to differ materially with GAAP.
from the results, level of activity, performance or achievements expressed or
Due to rounding, numbers presented throughout this document may not add
implied in the forward-looking statements. As a result, we cannot assure you
up precisely to the totals provided and percentages may not precisely reflect
that the forward-looking statements included in this presentation will prove to
the absolute figures.
be accurate or correct. In light of these risks, uncertainties and assumptions,
the future performance or events described in the forward-looking statements
in this presentation might not occur.
© AerCap | Confidential property of the company, not for disclosure or use without permission 2Key Messages
Air travel is recovering rapidly, increasing cash collections
and demand for leasing
Combination with GECAS will generate stronger revenues,
cash flows and earnings
These drivers put AerCap on a higher ratings trajectory
© AerCap | Confidential property of the company, not for disclosure or use without permission 3Vaccines Drive Greater Travel Demand
Travel in the U.S., Europe and China, which together accounted for 67% of travel in 2019, continues to
recover at a rapid rate
United States Europe China
3.0 120 35,000 140 18,000 160
16,000
140
30,000 120
2.5 100
14,000
120
Total vaccine doses per 100 residents
25,000 100
Total vaccine doses per 100 residents
Total vaccine doses per 100 residents
2.0 80 12,000
Daily TSA Passenger Numbers (Millions)
100
Daily Eurocontrol Flights
20,000 80
10,000
Daily Flights
1.5 60 80
8,000
15,000 60
60
1.0 40 6,000
10,000 40
40
4,000
0.5 20
5,000 20
20
2,000
0.0 0 0 0 0 0
Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21 Jan-20 May-20 Sep-20 Jan-21 May-21 Sep-21
Daily TSA Passenger Numbers Total vaccine doses per 100 residents Daily Eurocontrol Flights Total vaccine doses per 100 residents (E.U.) Daily Flights Total vaccine doses per 100 residents
See Supplemental Information – Endnotes.
© AerCap | Confidential property of the company, not for disclosure or use without permission 4Demand for Aircraft Leasing will Continue to Grow
Growth in aircraft leasing has been resilient through past disruptions, driven by long-term secular trends
Leasing Market Share Growing Key Points
Oil Gulf Asian 9/11 Financial crisis
Covid-19
Airlines were already increasing their
crisis crisis crisis & SARS
use of leasing prior to Covid-19
(# of aircraft)
Aircraft leasing will be essential to
15,000 airlines as they look to repair their
50% balance sheets from the impact of
Leased Covid-19
12,000
We expect the aircraft leasing market
share to surpass 50% by 2024
9,000
30% AerCap has the balance sheet and the
Leased order book to benefit from this trend
6,000
5% 3,000
Leased
0
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 2025
Portion of Global Fleet on Operating Lease
See Supplemental Information – Endnotes.
© AerCap | Confidential property of the company, not for disclosure or use without permission 5AerCap: Clear Signs of Recovery Underway
Growing confidence of airline customers is driving leasing activity and operating cash flows higher
Leasing Activity Increasing Deferral Requests Slowing Operating Cash Flow Improving
60 800
140
700
120 50 5
600
Number of Deferral Requests
100
40
Number of Aircraft Placed
500
$, millions
80
117 70 400
100 30
771
60 81 653
47 300
629
81 20 541
40 32
47 11 200 400
13 308
27 10
20 41 11 100
8
23 20 9
17 6 2
10 11 12
0 0 2 2 2 0
1H18 2H18 1H19 2H19 1H20 2H20 1H21 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
QTD
Widebodies Narrowbodies First Deferral Subsequent Deferral
© AerCap | Confidential property of the company, not for disclosure or use without permission 6GECAS: Right Assets, Right Price, Right Time
Deal Highlights
GECAS’ narrowbody-focused fleet, engine leasing business, freighter
RIGHT
business, limited customer overlap and new technology order book
ASSETS
complement AerCap’s portfolio
Combination of
AerCap and RIGHT Discount to book value for an attractive fleet, drives higher lease
GECAS leads to PRICE yields and returns
STRONGER
REVENUES, Recovery in air travel is underway at a much faster pace than we had
CASH FLOWS RIGHT
anticipated when the deal was announced
AND EARNINGS TIME
Current low interest rate environment is an opportune time to put in
place a long-term capital structure
© AerCap | Confidential property of the company, not for disclosure or use without permission 7Creates the Most Important Player in Aviation Leasing
AIRCRAFT ENGINES HELICOPTERS
#1 #1 #1
Key Highlights Key Highlights Key Highlights
World’s #1 lessor World’s #1 lessor World’s #1 lessor
~7 year average remaining lease term Synergy opportunities >300 helicopters across ~40 customers
Strengthened freighter business Increased revenue diversification Positive supply dynamics
Exclusively new technology order book Majority CFM56 and LEAP engines O&G demand increasing
~90% of combined assets ~5% of combined assets ~5% of combined assets
See Supplemental Information – Endnotes.
© AerCap | Confidential property of the company, not for disclosure or use without permission 8Attractive Price Will Drive Future Returns
Attractive purchase price for a high-quality, diversified fleet
Implied P/B Multiple Calculation Highlights
GECAS reported net assets of $34.2 billion as at
35 December 31, 2020
AerCap agreed to pay $25 billion in cash/Notes and
30
111.5m shares – equivalent to ~$31 billion (assuming a
$55 share price)
25
In addition, AerCap will benefit from the cash flows of
25.7
GECAS from October 1, 2020 to closing as well as the
20 elimination of certain tax liabilities which we expect will
bring the total discount to over $4 billion
34.2
15 Assuming a similar leverage to AerCap of 3:1, this implies
a purchase price-to-book equity of approximately 0.5x
10 This drives higher returns and earnings for the combined
business
>4.0
~0.5x
5
8.6 BV
0
GECAS Assets Implied Debt @ Implied Equity @ Discount P/B
3:1 3:1
See Supplemental Information – Endnotes.
© AerCap | Confidential property of the company, not for disclosure or use without permission 9GECAS Transaction Timeline
Integration workstreams are in place to hit the ground running from day 1
AerCap E.U. Other
Public U.S. DOJ
Shareholder Regulatory Closing
Announcement Approval Approval
Meeting Approvals
IN
MARCH MAY JUNE JULY 4Q 2021
PROGRESS
Announced the Shareholders On June 4, the U.S. On July 26, the E.U. We continue to We continue to
transaction, held approved the DOJ concluded its authorised the make progress on expect to close in
an investor update transaction with review of the proposed gaining regulatory 4Q 2021
call 99.95% of the vote transaction transaction approval in other
jurisdictions
© AerCap | Confidential property of the company, not for disclosure or use without permission 10Fleet Emission Reduction
AerCap has made significant progress in reducing Scope 3 GHG emissions, with further progress ahead
Absolute Reduction Strong Partnership with Our Customers
As the world’s largest lessor, we have a responsibility to lead the
17% 9% 58% industry towards a lower-carbon economy
REDUCTION REDUCTION REDUCTION1
Since 2014, we have invested over $25 billion in new technology
aircraft. As a result, we have achieved a significant reduction in
our Scope 3 greenhouse gas (GHG) emissions
2015 2018 2019 2020
As we continue our strategic fleet transformation, we expect to
make further progress, relative to the 2019 baseline
Intensity Reduction In addition, many of our customers are also embracing the use of
sustainable aviation fuels (SAF) which further reduces their
environmental impact
9% 12% 54% Air France-KLM operated the longest 787 delivery flight
REDUCTION REDUCTION REDUCTION1
(10,973km) using SAF in July 2019
Air Transat operated the first A321LR delivery flight
(5,769km) using a blend of SAF in July 2020
2015 2018 2019 2020
1. 2020 CO2e number is significantly impacted by the Covid-19 pandemic and the travel restrictions that existed for most of the year
© AerCap | Confidential property of the company, not for disclosure or use without permission 11AerCap Leads in New Technology Aircraft
AerCap is the largest owner of the most fuel-efficient, environmentally friendly commercial aircraft
Funding plan through December 2018
New Technology Aircraft (% of NBV)
Combined ~75%
6% 36% 63% ~60%
Company TARGET
2014 2017 2020 20211 20241
100%
90%
(% of AerCap aircraft fleet NBV)
80%
70%
Current Technology Aircraft
60%
50%
40%
30% New Technology Aircraft
20%
10%
0%
2014 2015 2016 2017 2018 2019 2020 20211 2022 2023 20241
See Supplemental Information – Endnotes.
© AerCap | Confidential property of the company, not for disclosure or use without permission 12Strong Credit Profile Maintained Throughout Covid-19
AerCap’s balance sheet remained strong throughout Covid-19, demonstrating the company’s resilience
Adj. Leverage Ratio (Debt / Equity) Secured Debt / Total Assets
3.3x 30%
3.4x
3.2x 3.1x
3.2x 25%
3.0x 2.9x
2.9x 2.8x 2.8x 2.8x 2.8x
2.8x 2.7x 2.7x 2.8x 2.7x
2.8x 2.6x 20%
2.8x 2.8x 2.7x 2.6x
2.6x 2.7x 2.4x
2.7x 2.7x 2.5x
2.4x 2.5x 2.5x 15%
2.2x
2.0x 10%
1Q15 2Q16 3Q17 4Q18 1Q20 2Q21 1Q15 2Q16 3Q17 4Q18 1Q20 2Q21
Sources-to-Uses Ratio Unencumbered Assets ($ billion)
3.0x 2.9x
30
2.5x 2.2x 25
2.3x
2.0x 2.0x
2.0x 20
1.7x 1.7x
1.6x 1.6x 1.5x 2.0x
1.5x 1.3x 1.4x
1.5x 1.3x 1.3x 1.7x 15
1.5x 1.5x 1.4x 1.5x
1.4x 1.4x
1.2x 1.2x
1.0x 10
0.5x 5
Excess Coverage Sources to Uses
0.0x 0
1Q15 2Q16 3Q17 4Q18 1Q20 2Q21 1Q15 2Q16 3Q17 4Q18 1Q20 2Q21
See Supplemental Information – Capital Structure.
© AerCap | Confidential property of the company, not for disclosure or use without permission 13Improved Credit Profile for Combined Company
Transaction enhances many of AerCap’s key credit metrics and maintains its current investment grade
rating, setting the combined company up on a higher ratings trajectory
HIGHER FFO / DEBT SIGNIFICANTLY HIGH LIQUIDITY AND
AND INTEREST ENHANCED CUSTOMER LOW LEVERAGE
COVERAGE DIVERSIFICATION TARGETS UNCHANGED
SECURED DEBT UNENCUMBERED
$50BN
© AerCap | Confidential property of the company, not for disclosure or use without permission 14AerCap: Ready for Take-off
AerCap looks forward to higher cash flows, greater customer diversification and stronger credit ratings
GECAS transaction adds
significant accretion to cash
flow and profitability
Travel demand is returning
quickly
AerCap is committed to a
higher ratings trajectory
Cash collections and lease
demand are increasing
© AerCap | Confidential property of the company, not for disclosure or use without permission 15Supplemental Information D u b l i n | S h a n n o n | L o s A n g e l e s | S i n g a p o r e | A m s t e r d a m | S h a n g h a i | A b u D h a b i | S e a t t l e | T o u l o u s e
Endnotes
SLIDE 4: Vaccines Drive Greater Travel Demand
The U.S., Europe and China accounted for ~67% of 2019 global commercial flights according to FlightRadar24
Vaccine data: Our World in Data, as of September 8, 2021. Country-by-country sources - https://ourworldindata.org/covid-vaccinations#source-information-country-by-country
Flights/Passengers: Transportation Security Administration checkpoint travel numbers, Eurocontrol, Cirium, as of September 8, 2021
SLIDE 5: Demand for Aircraft Leasing will Continue to Grow
Cirium Fleets Analyzer as of December 31 for each respective year and as of August 31, 2021, for the year 2021: Airbus, Boeing, McDonnell-Douglas in-service, storage passenger jets.
SLIDE 8: Creates the Most Important Player in Aviation Leasing
As of December 31, 2020. NBV % based on pro forma estimates.
SLIDE 9: Attractive Price Will Drive Future Returns
GECAS total assets as of December 31, 2020. Consideration and discount assumes an AerCap share price of $55 upon closing.
SLIDE 11: Fleet Emission Reduction
Intensity calculated as CO2e emissions in ton/$ million Lease revenue; CO2e includes CO2, CH4 and N2O.
SLIDE 12: AerCap Leads in New Technology Aircraft
1. % of NBV of the estimated combined company as of December 31, 2021, and 2024, respectively.
© AerCap | Confidential property of the company, not for disclosure or use without permission 17You can also read
