Finnair Oyj - Financial Statement Release

Finnair Group financial statement release 1 January–31 December 2016

Finnair Plc        Financial Statement Release      15 February 2017 at 9:00 am

Comparable full-year operating result more than doubled year on year; positive
in Q4

October–December 2016

  ·  Revenue increased by 0.4% year-on-year to 569.9 million euros (567.7)*.
Excluding the sold travel agencies, revenue growth was 1.2%
  ·  Available seat kilometres (ASK) grew by 3.5%.
  ·  Comparable operating result was 1.6 million euros (0.8).
  ·  Operating result was 18.2 million euros (85.0). The items affecting
comparability were mainly related to foreign exchange gains.
  ·  Comparable EBITDAR was 59.4 million euros (59.5).
  ·  Net cash flow from operating activities totalled 30.5 million euros (7.1),
and net cash flow from investing activities amounted to -264.7 million euros (
-7.8).**
  ·  Unit revenue (RASK) decreased by 3.0% year-on-year.***
  ·  Unit cost (CASK) decreased by 3.2% and unit cost at constant currency
excluding fuel decreased by 1.6% year-on-year.
  ·  Ancillary and retail revenue per passenger grew by 10.3% year-on-year to
12.2 euros.
  ·  Earnings per share were 0.08 euros (0.44).

January–December 2016

  ·  Revenue increased by 2.8% year-on-year to 2,316.8 million euros (2,254.5)
with 6.5% ASK growth. Excluding the sold travel agencies, revenue growth was
3.2%.
  ·  Comparable operating result was 55.2 million euros (23.7).
  ·  Operating result was 116.2 million euros (121.7) including the sales gain
on one Airbus A350 widebody aircraft (two were sold and leased back in 2015).
  ·  Comparable EBITDAR was 270.4 million euros (231.2).
  ·  Net cash flow from operating activities stood at 219.7 million euros
(171.0), and net cash flow from investing activities totalled -499.6 million
euros (78.6).**
  ·  Unit revenue (RASK) decreased by 3.5% year-on-year.***
  ·  Unit cost (CASK) decreased by 4.8% and unit cost excluding fuel at constant
currency increased by 0.3% year-on-year.
  ·  Ancillary and retail revenue per passenger grew by 15.2% year-on-year to
11.6 euros.
  ·  Earnings per share were 0.55 euros (0.57).
  ·  Outlook: Finnair estimates that, in 2017, its capacity will grow 8–10 per
cent, weighted towards the second half of 2017. Revenue is expected to grow more
slowly than capacity, reflecting both the increasing capacity in the markets and
on the other hand Finnair's efforts to grow the ancillary sales.
  ·  The Board of Directors proposes to the Annual General Meeting that a
dividend of 0.10 euros per share be distributed for 2016.

* Unless otherwise stated, figures in parentheses refer to the comparison
period, i.e. the same period last year.
** Net cash flow from investing activities includes 168 million euro investments
in money market funds and other financial assets maturing after more than three
months. These investments are part of the Group’s liquidity management
*** 2015 revenue includes sales from divested subsidiaries; Estravel was sold in
December 2015 and SMT in October 2016.

Outlook

The demand outlook for passenger and cargo traffic in Finnair’s main markets
continues to involve uncertainty. Finnair estimates that, in 2017, due to the
fleet renewal and introduction of new aircraft, its capacity will grow 8–10 per
cent, weighted strongly towards the second half of 2017. Revenue is expected to
grow more slowly than our capacity, reflecting increasing capacity in the
relevant markets.

In keeping with its disclosure policy, Finnair will issue guidance for its
expected full-year operational result in connection with the half-year report in
July.

CEO Pekka Vauramo:

As a whole, 2016 was a year of growth for Finnair. We successfully launched
several new destinations, including Fukuoka and Guangzhou, and added frequencies
to key routes. We took delivery of four Airbus A350 widebody aircraft and
carried half a million more passengers than a year earlier. Considerable
progress was made for example in the digitalisation of our technical processes.
Due to the growth, we have also recruited and trained considerable numbers of
new personnel, mainly pilots and cabin crew, as previously anticipated. We are
building a culture of growth.

In the last quarter, our comparable result was approximately 2 million euros
positive, exceeding last year’s result by one million euros; hence, we achieved
our ninth consecutive quarterly result improvement. The front-loaded training
and other expenses resulting from the accelerated growth programme amounted to
over 20 million euros in 2016. During the last quarter, we had over 100 pilots
tied up in trainings.

Considering the seasonality of our business and the headwinds we faced towards
the end of the year, we can be fairly content with our result. Due to delays in
some of the A350 deliveries, the training schedule of our pilots for the new
aircraft type was interrupted, which forced us to wetlease additional capacity
during the quarter in order to ensure the least amount of inconvenience to our
customers. This caused additional expenses during the quarter. In addition, we
were forced to cancel some flights towards the end of the year.

Finnair’s revenue divided by the capacity, or RASK, showed more resilience than
that of some of our peers. Ancillary sales continued healthy growth, and our
plan to deploy more tourist capacity to Lapland was a success. As an example,
Ivalo and Rovaniemi combined are currently the largest destination for our
Chinese passengers.

We have specified a target to boost our revenues by 500 million euros by the end
of 2019. Ancillary sales, with new revenues streams, will play a key role in
achieving this target. We are also expecting the new cargo hub to be completed
in 2017, which will enable increased revenue, particularly by providing better
facilities for premium services for specialty goods.

This year will be an important leap of growth for us. There will be a tangible
increase in capacity, four new A350s and active recruitments. At the same time,
we are taking serious efforts to develop the customer experience and the
internal people experience. I believe this will lay a solid foundation to launch
into the year.

Financial reporting

The publication dates of Finnair’s financial reports for 2017 are as follows:

Interim Report 1 January – 31 March 2017:                               28 April
2017

Half-Year Report 1 January – 30 June 2017:                               20 July
2017

Interim Report 1 January – 31 September 2017:                           25
October 2017

FINNAIR PLC
Board of Directors

Briefings

Finnair will hold a result press conference on 15 February 2017 at 11:00 a.m.
and an analyst briefing at 12:30 p.m. at its office at Tietotie 9. An English
-language telephone conference and webcast will begin at 2:30 p.m. Finnish time.
The conference may be attended by dialling your local access number 0800 915 597
(Finland), 0850 510 036 (Sweden), 020 3059 8125 (UK) or +44 20 3059 8125 (all
other countries) and quoting “Finnair” to the operator. To join the live
webcast, please register at: http://www.investis
-live.com/finnair/5889c7ff04323f1100d219ce/7y2ua

For further information, please contact:

Chief Financial Officer Pekka Vähähyyppä, tel. +358 9 818 8550,
pekka.vahahyyppa@finnair.com

Financial Communications Manager Ilkka Korhonen, tel. +358 9 818 4705,
ilkka.korhonen@finnair.com

IRO Kati Kaksonen, tel. +358 9 818 2780, kati.kaksonen@finnair.com

Financial Statement Bulletin
2016 (http://mbpublicbinaryproxy/Public/3718/2189239/b8f3b10c495e9e54.pdf)
Further information:
Finnair communications, tel. +358 9 818 4020, comms(a)finnair.com

Distribution:
Nasdaq Helsinki
Principal media
Finnair is a network airline specialising in passenger and cargo traffic between
Asia and Europe. Helsinki’s geographical location gives Finnair a competitive
advantage, since the fastest connections between many European destinations and
Asian megacities fly over Finland. Finnair’s vision is to offer its passengers a
unique Nordic experience, and its mission is to offer the smoothest, fastest
connections in the northern hemisphere via Helsinki and the best network to the
world from its home markets. Finnair is the only Nordic carrier with a 4-star
Skytrax ranking and a member of the oneworld alliance. In 2016, Finnair’s
revenues amounted to EUR 2,317 million and it had a personnel of 4,940 at year
-end. Finnair Plc’s shares are quoted on Nasdaq Helsinki.

Attachments:

Finnair_FY_2016_EN.pdf