Avianca Holdings S.A - Corporate Presentation February 2020 - AWS
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Avianca Holdings S.A.
Corporate Presentation
February 2020
Disclaimer
The present document consolidates information from Avianca Holdings S.A. and its subsidiaries, including unaudited financial figures,
operational managerial indicators, financial indicators and managerial projections of future performance, in line with Avianca Holdings
S.A. and its subsidiaries’ business plans. References to future behaviors are indicative and do not constitute a guarantee of compliance
by the Company, its Stakeholders or directors. Unaudited accounting and financial information and projections presented in this
document are based on internal data and calculations made by the Company, which may be subject to changes or adjustments. Any
change in the current economic conditions, the aviation industry, fuel prices, international markets and external events, among others,
may affect the ongoing business results and future projections.
Avianca Holdings S.A. herein after Avianca Holdings and its subsidiaries warn investors and potential investors that future projections
are not a guarantee of performance and that actual results may differ materially. Every investor or potential investor will be
responsible for investment decisions taken or not taken as a result of his or her assessment of the information contained herein.
Avianca Holdings S.A. is not responsible for any fourth parties’ content. Avianca Holdings may make changes and updates to the
information contained herein.
The information, tables and logos contained in this presentation may not be reproduced without the consent of Avianca Holdings S.A.
The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not
be construed as an endorsement of the products or services of the Company or this proposed offering.
2Introduction
Avianca at a Glance
Key Themes AVH Second Largest Airlines in Latinamerica
US 4.8 Billion in revenues for the Last Twelve Months
Strategically-located hubs with a 151 route network in Colombia, Peru
and El Salvador and more than 75 destinations
Leading legacy carrier in Latin America with considerable share in
domestic and international routes. Number one in Colombia.
Leading frequent flyer program in Latin-America with more 9.7 million
members
Longest continuously operating airline in the world, completing its
100th anniversary in December 2020
Three Primary Operating Segments
Passenger Loyalty Cargo & Mail
JBA Drives World-Class Offering
1,300 205 12,000
Weekly flight Destinations
Connecting Options
between Latin America in Latin America
and the US
3Avianca Holdings (AVH)
Material events since November 2018 to date
Synergy-UAL
Loan & JBA UAL took AVH successfully
6 closed the
105
with UAL and remedial AVH successfully
CPA. Airbus measures to exchange offer
orderbook with a tender of closed the financial
protect collateral, AVH announced Anko reprofiling.
renegotiatio new BoD van der Werff CEO and 88.1%.
5 n Adrian Neuhauser CFO 100
AVH successfully
closed its Order
4 Book 95
Synergy-related Renegotiation
defaults delay AVH successfully
Oceanair, filed The new AVH sings US250
Bond
for Judicial management Stakeholder loan.
refinancing
3 Reorganization launched “Avianca 90
2021” plan
S&P Fitch downgraded
downgraded AVH from “B” to
2 AVH from “B” to “B-”. 85
“CCC+”.
AVH Launched
an offer to
exchange its
1 existing 8.375% 80
PFAVHC 8 ⅜ 05/10/20
Senior Notes due
PFAVH 9 05/10/23 May 2020.
AVH Stock Price (usd/adr)
0 75
Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20
4
JBA: Joint Business Agreement
4Avianca Holdings successfully concludes financial Reprofiling
Financial Reprofiling Milestones
Bond Exchange
Successful bond exchange US$ 550 million, with a total of 88,1% of bonds tendered
New 2023 bond will pay semiannual coupon of 9% in May and November and mature in May 2023
Untendered Bonds will be paid at par on May 13, 2020
Stakeholder Loan
Reached Agreements with substantially all financial counterparties remedying all payment defaults
Upon complying with conditions precedent Avianca draws on the $250 Million stakeholder Loan with
following conditions:
• No Upfront fees • Maturity in December 2023
• 3% PIK Interest • Mandatory conversion to equity at US $ 4.6217 per ADS, subject to certain conditions2
Avianca secures USD 125 million in additional financing commitments:
• Private third party contributes USD 50 million under same economic conditions as United and Kingsland
• Investment vehicle of Citadel Advisors LLC provides USD 50 million senior secured convertible bond
• Group of private investors commit senior secured convertible loan for USD 25 million
Stakeholder loan boosts liquidity levels and strengthens capital structure to Cash / LTM Revenue at ~ 9%
Preferred Shareholder Facility
The Preferred Shareholder facility allows shareholders to participate in:
• minimum US$125 million convertible bond financing
• under similar conditions as United Airlines and Kingsland Holdings shareholder loan
• To be offered in 1Q 2020
5
(1) Avianca Holdings S.A. and its subsidiaries have been complying with the payment of lease since October 2019; 2 Please check the material fact published on November 18, 2019.Current Debt Structure
Debt Type Debt by Currency
Type Avg. Rate Lease
Aircraft Debt 4.3% 23%
43% Aircraft
Corp. Debt 5.5% 2% EUR
USD 98%
Bond 10%
Bonds 8.9%
24%
Total 5.3%
Corporate
Amortization Schedule
1.360
1.257
1.000 1.051 265
734 306 330 1,032
394
335
284 518 463
66 160 5
256 239 227 199 323
2020 2021 2022 2023 2024
Aircraft Corporate Bond Lease 6Avianca 2021 Transformation Plan
Targets 20211
Double Current Operating Margins
EBIT Margin
2x Margin
4.7%
Make cost
competitiveness a
core capability
Lift commercial 2018 2021 Plan
performance and Reduce Leverage Levels
customer Net Adjusted Debt to EBITDAR
Modify fleet to experience
6.2x
maximize profit in
≤4.5x
Re-design network the new network 4.5x
and strengthen
Eliminate Bogota
unprofitable flying
2018 2021 Plan
(1) Estimates and forward-looking statements are mainly based on our expectations as of the date of this presentation and estimates on future events and trends that affect or may affect our business, financial condition, results of operations, liquidity and prospects. They are made
considering information currently available to us and are not guarantees of future performance. Although we believe that these estimates and forward-looking statements are based upon assumptions that we believe to be reasonable in all material respects, they are subject to several 7
risks, uncertainties and assumptions and are made in light of information currently available to us.Four core strengths drive a differentiated offering
Core Strengths Value for Airline
1
Bogotá: the best hub to • Large local and growing international market in the ideal connecting
service Latin America location between the Americas, with a strong O/D market and solid
hub market share
2
LifeMiles: a best-in-class • One of the largest loyalty programs in Latin America, with over 9
loyalty program million members, growing at double-digit pace
3
Avianca: a great brand
with outstanding customer • A strong, trusted and universally recognizable brand within Latin
America with robust customer loyalty
support
4 Avianca/UA/Copa JBA
drives world-class offering • Significantly improved customer options in North and Latin America
resulting from the future implementation Joint Business Agreement
(JBA subject to authority approval) (subject to regulatory approval)
8Avianca Holdings Credit Peers
Issuer Debt Rating
BBB CCC
Debt/EBITDA
1X 10X
Interest Coverage
14X 2.3X 0X
Cash / LTM Revenue
35% 5%
EBIT Margin (%)
20% 4%
9
COPA LATAM AEROMEX AZUL GOL AVIANCAScenario analysis of AVHs ability to de-lever
AVH TD
11
AVH ND por forma*
AVH ND**
10
9
DEBT/ EBITDA
8
7
6
5
4
11% 14% 18% 21% 24%
EBITDA %
*Assumes conversion of Stakeholder debt to equity, and cash level of USD 700 million 10
**Assumes conversion of Stakeholder debt to equity, and cash level of USD 700 million and debt amort. of USD 300 millionThank You
Contact Information:
Investor Relations Office
ir@avianca.com
T: (57) 1 – 5877700
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