Corporate Presentation Oct 2015

7/23/2019 Corporate Presentation Oct 2015

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October 2015

Corporate Presentation


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Disclaimer

The information in this presentation has been prepared by Spicejet Limited (the Company)and has not been independently verified. No representation or warranty

expressed or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or opinions contained

herein. The information presented or contained in these slides is current as of the date hereof and is subject to change without notice, and its accuracy is not

guaranteed. Neither the Company, nor any of its advisers or representatives, nor any of their respective affiliates makes any undertaking to update any such

information subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice. No consideration has been given to the

particular objectives, financial situation or particular needs of any recipient. Neither the Company nor any of its advisors or representatives, nor any of their respective

affiliates shall have any liability whatsoever (in negligence or otherwise) for any loss arising from the use of this presentation or its contents or otherwise arising in

connection with this presentation. By assessing this presentation, you are agreeing to be bound by the trailing restrictions.

This presentation is intended for financial institutions and professional investors only and is not intended for distribution or reproduction to, or use by, retail investors.

This presentation is also not intended for distribution or reproduction to, or use by, any person or entity in any jurisdiction or country where such distribution or use

would be contrary to law or regulation.

The information in this presentation is given in confidence, and reproduction of this presentation, in whole or in part, or disclosure of any of its contents, without prior

consent of the Company, is prohibited. This presentation should be distributed and read in its entirety. This presentation remains the property of the Company and on

request must be returned and any copies destroyed.

This presentation is for information and convenient reference and does not constitute or form part of, and should not be construed as, any offer for sale or subscription

of, or solicitation of any offer to buy or subscribe for, any securities of the Company nor should it, or any part of it, form the basis of, or be relied on in connection with,

any contract or commitment whatsoever. This presentation does not constitute an offer of securities for sale in any jurisdiction, including the United States, and any

securities described in this announcement may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended or an

exemption from such registration.

Please refer to the financial statements of the Company that have been filed with the stock exchanges and is available on theCompanyswebsite. This presentation is

not intended to be fully inclusive and may not contain all of the information that you may consider material. This presentation contains historical information of the

Company that should not be regarded as an indication of future performance or results.

Certain statements in these slides may be considered forward-looking. These statements are based on managements current expectations and are subject to

uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors.

By accepting any copy of this presentation, you agree to be bound by the foregoing limitations.


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Table of Contents

1 Industry Snapshot

2 Spicejet: Fact Sheet

3 Our Turnaround Strategy

4Key Financials and Stock Price Performance

5 The Road Ahead In Short


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Table of Contents

1 Industry Snapshot



4Key Financials and Stock Price Performance



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The Indian Elephant: Marching Along at Increasing Pace

Expansion of the Middle Class

Number of middle c lass households

expected to increase from 53.6

MM in CY14 to 107.9 MM by CY19

- CAGR of 15.0%

Mumbai and New Delhi expected

to become the 25th & 30th largest

cities by household disposable

income globally by CY30

Continued Population Growth

2nd most populous country with

1.26 billion people growing at a

CAGR of 1.3% to reach 1.34 billion

by end of CY19

Population growth higher than

average growth of top 20 domestic

air markets globally

Strong Economic Growth

India expected to be one of the

fastest growing major economies

Real GDP expected to grow faster

than China and APAC at a CAGR of

7.1% between CY14 -19

Real GDP CAGR from CY2014 to CY2019E

7.1%6.4%

4.5%3.6%

2.8% 2.4%

1.9% 1.8%

India China APAC Middle East &North Africa

Lat in America Nor th America Eastern Europe Western Europe

World average of 3.0%

Note Figures for 2014 are estimates by the EIU, Figures for 2015 to 2019 are forecast by the EIU, as of latest available in March and April 2015, IMF, World Economic Outlook, Apr15

Note APAC includes China

1,368 1,260

319 252 203 144127 120

99 81 77 69 64 60 48 47 36 30 27 5

China

India

USA

Indonesia

Brazil

Russia

Japan

Mexico

Philippines

Germany

Turkey

Thailand

France

Italy

Colombia

Spain

Canada

Malaysia

Australia

Norway

Population CY2014 (MM)

Note Population date for all countries, actual and estimates, are from the IMF, World Outlook, April 2015. CY2014 population data is actual for all countries except India, Indonesia, Russia, Germany, Turkey,

Columbia, Canada and Australia, for which data has been estimated by the IMF. CY2015 to CY2019 population data for all countries are estimates by the IMF. Domestic seats ranking is from CAPA

Population CAGR

(CY2014-CY2019)0.5% 1.3% 0.7% 1.4% 0.8% 0.0% (0.3%) 1.1% 2.0% 0.2% 1.0% 0.2% 0.5% 0.4% 1.1% 0.1% 0.9% 1.7% 1.2% 1.1%

Domestic Seats

Ranking (CY2014) 2 6 1 5 4 9 3 11 18 14 10 15 16 12 19 13 8 17 7 20

Annual per capita income at current prices (Rs.)CAGR of 12.6%

46,24954,021

61,85567,839

74,380

FY2010 FY2011 FY2012 FY2013 FY2014

Note Ministry of Statistics and Programme Implementation, India (as pulled from the Ministry of

Statistics and Programme Implementation website as of April 2015)

Middle Class Households (with nominal disposable incomeof > USD5,000 per annum at constant 2005 prices) (million)

Note Figures for CY2014 are estimates by the EIU. Figures for C Y2019 are forecast by the EIU

170.4

53.6

20.611.4 2.7 8.2 5.4

237.7

107.9

30.213.5 4.4 10.9 6.2

China India Indonesia Thailand Vietnam Philippines Malaysia

CY2014 CY2019

6.9%

CAGR

15.0% CAGR

7.9% CAGR

3.4% CAGR10.4% CAGR 6.0% CAGR 2.7% CAGR

Note: All industry data on this slide is sourced from publicly available offer documents of a leading Indian airline company. We have not independently verified this data for accuracy and correctness


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Indian Air Travel Market: Set for the Next Big Leap

Annual domestic seats per capita CY2014

0.08

1.030.65 0.63 0.53 0.48 0.41 0.37 0.36 0.35 0.29

4.79

3.34

2.59

1.581.12

0.83 0.65 0.50 0.41

India

Malaysia

Brazil

Turkey

Colombia

Thailand

Indonesia

Russia

Mexico

China

Philippines

Norway

Australia

USA

Canada

Japan

Spain

Italy

France

Germany

GDP per capitabased on PPP

CY2014 (000

USD)

5.7 24.5 15.2 19.6 13.5 14.4 10.2 24.8 17.9 12.9 6.9 65.9 46.6 54.7 44.5 37.7 32.9 34.5 40.4 44.7

Developing Developed


Domestic nationals visits within India (million) Indian nationals departures from India

(million)

668.8747.7

864.5

1,045.1

1,145.3

CY2009 CY2010 CY2011 CY2012 CY2013

Note India Tourism Statistics, Ministry of Tourism

11.1

13.0 14.0

14.9

16.6

CY2009 CY2010 CY2011 CY2012 CY2013

61.168.2

78.6 76.180.7

60.3 63.2

FY10 FY11 FY12 FY13 FY14 9MFY14 9MFY15

ASK of Domestic Scheduled Services (billion)

90.495.8

101.7114.5

133.4150.4

FY15 FY16 FY17 FY18 FY19 FY20

Domestic ASK Forecast (billion)

Strong Growth in Tourism

Total contribution of travel and tourism

to Indias GDP was 6,631.6 billion in

CY13 (6.2% of GDP)

Forecast to rise by 7% per annum to

13,983.0 billion (6.8% of GDP) by CY2024

Low Aircraft Penetration Rates

One of the lowest penetration rates

0.08 domestic carrier seats per capita

p.a., compared to Brazil, Turkey,

Indonesia and China (between 0.35 &

0.65)

Expansion in Infrastructure& Capacity

Public-private partnerships

State-of-the-art greenfield airports

work on for brownfield airports

New airport investments and industrial

growth on back of policy initiatives like

Make in India to drive demand growth


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Indian Aviation Market: Competitive Landscape

India Domestic Full-Service Carriers vs. Low-Cost Carriers Market Share LCCs have been consistently gaining market share with CAPA estimates

suggesting they will reach 65-70% in near future

40.5% 45.6%49.8%

60.8% 63.4% 62.2%

59.5% 54.4%50.2%

39.2% 36.6% 37.8%

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

LCC Market Share FSC Market Share

Airline PromoterMarket Share

(Domestic)Service Type

Fleet

SizeAircraft Type Airports

AirIndia Govt of India 16.6% FSC 123 Airbus, Boeing 51-D34-Int

Jet Airways Naresh Goyal 22.7% FSC 107 Airbus, Boeing, ATR51-D

22-Int

IndiGo Interglobe Ltd. 35.3% LCC 88 Airbus-A 32033-D

5-Int

SpiceJet Ajay Singh 12.3% LCC 34* Boeing 737 and Q40034-D

7-Int

Go Air Wadia Group 8.1% LCC 19 Airbus - 320 22-D

* Company plans to add two aircrafts on dry lease by exit Oct15. Additionally the company operates 5 aircrafts on wet lease


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Private Indian LCCs: Young and Raring to get intothe Big League

3.1 3.6 3.8 5.8 10.3 3.7 4.6 4.6 2.6 4.7 6.0 6.2 5.2 7.4 7.6 7.9 12.5

IndiGo G o Air SpiceJet Jet Airways Air In dia Thai Ai rAsia AirAsia

Malaysia

Cebu

Pacific Air

Air

Arabia

Pegasus

Airlines

EasyJet Ryanair Spirit

Airlines

Gol WestJet JetBlue Southwest

IndianCarriers

LCCs operating inAsia (ex-India)

LCCs operating inEMEA

LCCs operating inAmericas

Average:

5.3

Average:

4.3

Average:

4.9

Average:

8.1

Source CAPA

Average Age

Fleet size

88123 107

34 19

7948 40

302

202

53 34

663

203

135106

65

IndiGo Air India Jet Airways SpiceJet Go Air AirAsia

Malaysia

Cebu

Pacific Air

Th ai AirAsia Ryana ir Easy Jet Peg asus

Airlines

Air

Arabia

Southwest JetBlue Gol WestJet Spirit

Airlines

Indian Carriers LCCs operating in Asia

(ex-India)

LCCs operating in EMEA LCCs operating in

AmericasSource CAPA

Relatively young fleetamongst Indian operators

Induction of fresh planes to

only help in reducing the

average fleet age

In terms of fleet average

age, Spicejet fleet would be

one of the youngest in the

Industry globally

Indian carriers compare

favorably to their Asian

counterparts

With extremely aggressive

fleet expansion plans, all

private players set for

massive growth in capacities

Spicejet will increase its

fleet by 50% over next two

fiscals



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Table of Contents

1 Industry Snapshot



4 Key Financials and Stock Price Performance



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Snapshot of operations

~ Pax carried per day31,000

~ Flights per day250

Domestic destinations34

International destinations7


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High Regional Presence Ensures High Share ofMarket on Non-Metro Routes

Segmental market share by passenger volume for the top 10 routes in each segment for nine months ended December 31, 2014

Source DGCA


39.4% 36.9%

53.6%

14.1%

10.0%

2.0%

18.4%

13.8%

8.2%

19.2%

18.6%

21.9%

9.0%

20.7%14.3%

0.0% 0.1% 0.0%

Top 10 Metro to Metro routes Top 10 Metro to Non-metro routes Top 10 Non-metro to Non-metro routes

IndiGo Jet Airways Air India SpiceJet Go Air Others

11,986,537 6,104,219 1,234,945


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Statistical Snapshot to Our Business

History and CorporateMatters

Started in May 2005 2ndlargest airline by Jul14

Change of control in 2010Acquired by Marans

Change of control againAjay

Singh takes over followingscheme of reconstruction and

revival in Feb15

Fleet Details

Scale of OperationsPassengers Ferried:

31,000 per day

5.75 million YTD Aug15

Market Share:

12.3% on domestic operations

(Aug15)

Passenger Load Factor:

92.1% - Highest load factor in

industry consistently since

Apr15

2 more 737-700 to be inducted by

exit Nov15;

Additionally 5 on wet lease to

address short term capacity gapand seasonal demand

B737-800

16 in operation

Avg. age 4.82 yrs

B737-900

4 in operation

Avg. age 7.22 yrs

Q400

14 in operation

Avg. age 3.74 yrs

Share Market DataCMP: Rs.43.25

52week H/L: Rs. 43.60 / 11.25

Market Cap: ~Rs. 26,000 MM

Promoter Shareholding: 60%

Investor Returns since Jan15

(announcement of change in

control): 132%


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Key Management

SPS Suri

Head of Flight Operations

Chandan Sand

Head of Legal & CompanySecretary

GP Gupta

Chief Administrative

Officer

Kiran Koteshwar

CFO

Debojo Maharshi

Chief Marketing Officer

Ajay Singh

Chairman & MD

Arun Kashyap

Head of Engineering

Management Team

Shilpa Bhatia

Head of Sales and Revenue


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Table of Contents

1 Industry Snapshot






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Turnaround Strategy Key Tenets

Continue to Consolidate MarketPresence and have a Strong

Brand Connect

1

Work on Managing Costs;

Increase Margins

Drastic reductions on asset

related cost

Close monitoring of Fuel

Consumption

3

Recapitalize

and fund airline for growth

4

Expand fleet focus on

increasing international and

regional presence while creatinga strong foothold in domestic

network

2

Leverage on the Spicejet BrandStrength

Hot Gets Hotter

5


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Continue to Consolidate Market Presence andhave a Strong Brand Connect

Only Airl ine to Have Gained Market Share Only Airline with Increased Load FactorsSignificant Improvement in OTP

(atfour Metro Airports)

10.4%

18.6%

23.3%

36.1%

9.3%

2.3%

12.3%

16.6%

22.7%

35.3%

8.1%

5.0%

Spicejet Air India Jet Airways+ Jet Lite

Indigo Go Air Others

Dec14 Aug15

Others

86.7%85.9%

89.0% 88.8%84.2%

91.1%

79.3% 80.0%76.8% 75.6%

Spicejet Air India Jet Airways +Jet Lite

Indigo Go Air

Dec14 Aug15

71.0%70.3%

76.7%

46.7%

77.4%

71.4%

76.9%81.3%

Mumbai Bangalore Hyderabad Delhi

Dec14 Aug15

Plans to increase market share to 14% by exit FY16 and 18% by exit FY17

Increased regional connectivity together with focus on international expansion to propel market share gain

1


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Expand Fleet Focus on Increasing International & Regional Presence;

Create Strong Foothold in Domestic Network

Operates 16 B737-800 and 4 B737-900 planes; 2 planes to be added

on dry lease by exit Oct15

Serves domestic and international routes with 186 seats on theB737-800 and 212 seats on the B737-900

One of the youngest Boeing fleets with an average age of 4.82 years

and 7.22 years respectively

Additionally, the company operates 5 planes on wet lease making it

a total of 26 narrow body operations for Q3FY16

BoeingFlee

t

Operates 14 Q400 Bombardier fleet with an average age

of 3.74 years only all on long term financial lease

With 78 seats each, these serve as excellent connecting

agents for niche routes with high passenger yields

Provide the airline with significant flexibility to develop

regional routes and test new marketsBombardier

Fleet

Plans to increase fleet to 49 planes by exit FY17 in discussion with Airbus / Boeing on possible acquisition

Fleet expansion to serve regional routes, mostly connecting tier 1, tier 2 and tier 3 cities

2


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Work on Managing Costs; Increase Margins

Rationalize Flight

Operating Cost

Address need for

infrastructureupgradation

Installed advanced fuel

management dashboard

software

Plans afoot to increase

contribution of direct

sales

Rightsizing of manpower to

cater to reduced fleet size

Drastic improvement in efficiencies of key

functions

All unfavourable contracts being

renegotiated

Fuel hedging, fuel optimisation measures, and

other RoI measures

Work on route optimization

reduce unproductive flight time

High aircraft utilisation

Work in progress for direct import of

ATF estimated cost saving of 12-

15% on fuel cost

Cost reduction initiatives

driven on war footing by

cross-functional task-force

3


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Recapitalize Balance Sheet And Fund Airline For Growth

Recapitalize at

Opportune Time in

next 12 months

Fund for Growth

Currently a negative net worth company significant

improvement in networth since commencement of

revival plan

Equity infusion coupled with FY16 profits expected to

bring networth back to black

Debt funding to also be obtained to further growth

Funds required for

Addition to fleet

Developing hedging strategy and direct import of ATF

aimed at reducing fuel costs

Capex in infrastructure development for efficient and

cost effective operations

Rationalize CapitalStructure

4


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Leverage on the Spicejet Brand StrengthHot Gets Hotter

5

Campaigns based on Leveraging Strong Brand Recall

Maximum Bang for every Marketing Buck

Focused Marketing and Promotion Campaigns riding on Spicejets Strong Brand Recall to Deliver Maximum Impact at Optimum Cost

Developing Messaging Targeted at Enhancing Customer Trust

Trendy Taglines Getting the Point Across with High Impact


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Table of Contents

1 Industry Snapshot





d i l ffi i i i bili


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Improved Operational Efficiency Bringing Stabilityto our Financials

NetworthRs. MM

3,211

(1,472)(2,244)

(9,945)

(12,645)FY11 FY12 FY13 FY14 FY15

Net DebtRs. MM

410

6,195

14,610 15,11213,949

FY11 FY12 FY13 FY14 FY15

Profit and Loss Account(1) Balance Sheet(1)

Net Revenue from OperationsRs. MM

28,770

39,433

56,007

62,387

51,727


EBITDA(2)

Rs. MM

1,213

(5,184)

(1,100)

(8,512)

(6,582)


Net ProfitRs. MM

1,012

(6,058)

(1,911)

(10,032)

(6,871)


Historical Annual Financial Performance

Net Revenue from OperationsRs. MM

15,729 16,756

7,826

11,032

Q4 Q1

FY15 FY16

EBITDA(2)

Rs. MM

Net ProfitRs. MM

Quarterly Performance While revenue has dipped owing to lower capacity in FY15 compared to previous years, quarterly

profitability metrics point to Improvement in Financial Condition

-2,927

-721-726

1,000

Q4 Q1

FY15 FY16

-3,215

-1,241

225

718

Q4 Q1

FY15 FY16FY14 FY14 FY14 Calculated as sum total of long term and short termborrowings net of cash and bank balances

Calculated as sum total of share capital and reserves and

surplus (including share application money, if any)

Note 1: Source BSE filings

Note 2: EBITDA is calculated as total income from operations net of (i) operating expenses (ex-depreciation), (ii) employee benefit expenses and (iii)other expenses, and doesnot include other income or net extraordinary income

O i l d bbi ff S k


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Operational Turnaround Rubbing off on StockPrice Stellar Returns in CY15

Spicejet has outperformed both Sensex / other listed peers since the change in control

We believe the increase

in our stock price

coincides with the

operational turnaround

of the airline

The Company has made

two successive quarters

of profits after the

change in control one

of the few listed private

sector airline companies

globally to do so

We believe we are well

positioned to benefit

from the sectoral

tailwinds such as

favourable demand

dynamics, better

regional air connectivity

and increasing

penetration and spend

on air travel

Price Performance Rebased to 100Since 15th Jan, 2015 (change of control) till Oct 16

Price Performance Rebased to 100Last 1 month (as at Oct 16)

50

100

150

200

250

15-Jan-15 17-Apr-15 14-Jul-15 16-Oct-15

SpiceJet 132% Jet Airways -14% Sensex -3%

90

110

130

150

170

190

16-Sep-15 28-Sep-15 07-Oct-15 16-Oct-15

SpiceJet 73% Jet Airways 16% Sensex 5%

Price Performance Rebased to 100Since 15th Jan, 2015 (change of control) till Oct 16

Price Performance Rebased to 100Last 1 month (as at Oct 16)

0

50

100

150

200

15-Jan-15 24-Mar-15 31-May-15 07-Aug-15 16-Oct-15

Cebu Air -3% Thai Airways -29%

Cathay Pacific -12% Qantas Airways 66%

Tiger Airways 18% AirAsia -46%

Air Arabia -10% Singapore Airlines -10%

90

100

110

120

130

16-Sep-15 23-Sep-15 30-Sep-15 07-Oct-15 16-Oct-15

Cebu Air -7% Thai Airways 6%

Cathay Pacific 6% Qantas Airways 7%

Tiger Airways 5% AirAsia 24%

Air Arabia 2% Singapore Airlines 7%

ComparisonwithDomesticP

eers

ComparisonwithGlobal

Peers


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Table of Contents

1 Industry Snapshot






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Our Planned Immediate Action Steps

Market ShareConsolidated market presence

Load Factor

Maintain at over 85%

Fleet

Add 7 aircrafts by exit

FY16

Ancillary Revenue

Increase to 20% of passenger

revenue

Reduction in Fuel Cost

Set-up direct ATF import facility

Recapitalization

Infuse capital at a opportune time

to fund growth and increase

network

Sales

Increase revenue by 8-10% CAGR

over next 2 years

Profits

Deliver robust profitable growth

over next 2 years


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Thank You

Corporate Presentation Oct 2015

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