sign in sign up
<<
Home , Aeromexico, Avianca

Evercore ISI Global Symposium New York, February 2020 Leading group in air transport of passengers and cargo in

Leading group of airlines in Latin America

69 74 million passengers carried in 2019

Regional leader in number of passengers carried 33 31 23 22 18 Leading frequent flyer and loyalty programs with over 30 10 million members

LATAM Gol Linhas Azul Aeromexico Copa Over 300-aircraft fleet, with and average age of ~9 years Aereas Holdings Passengers carried during 20181 (million) Leading network in Latin America

Leading network and platform in Latin America, with hubs in Multiple Bilateral Agreements Sao Paulo, and Santiago

More than 140 destinations in 27 countries:

. Market Share2: 1° in , Brazil and Peru, 2° in Argentina, and Ecuador . Regional operations in South America and long-haul operations to 5 continents

Source: Integrated Report 2018 and Bloomberg 1Data as of December, 2018 2As of September 2019 for Ecuador, October 2019 for Peru and Colombia, November 2019 for Argentina, Brazil and Chile 1 LATAM is amongst the largest groups in the world

PAX carried 20181 (million)

#1 Latin American airline group and #14 in the world in PAX carried 204 192 #1 Latin American airline group and #4 in the world in FFP members 158 (Over 30 million members) 142 140 135 121 120 113 110 101 89 75 69 59 56 55 54 51 46 42 40 38 36 35 33 31 29 29 27 25 23 22 22 18 18 17

10

IAG

Azul

Copa

Delta

United

Volaris

JetBlue

easyJet

Ryanair

Aeroflot

Emirates

Lufthansa

Alaska Air

Southwest

Air CanadaAir

Aeromexico

Thai AirwaysThai

Air ChinaAirLTD

ChinaEastern

ANAHoldings

JapanAirlines

QatarAirways

EtihadAirways

KoreanAirlines

LATAMAirlines

ChinaSouthern

VirginAustralia

TurkishAirlines

Qantas Airways

Air FranceAir KLM -

Air NewAir Zealand

AviancaHoldings

GarudaIndonesia

AmericanAirlines

Gol Linhas Gol Aereas

SingaporeAirlines

ScandinavianAirlines Cathay Airways

Other Latin

Source: Company’s websites, Bloomberg 1 Data as of Dec 31, 2018 except for: (LTM March 2019) 2 Large region, little traffic

World share (%)1

North America 22% Europe 27%

Asia Pacific 35% Middle East 9%

Latin America 5%

Africa 2%

Source: IATA 1 % of industry RPK in 2018 3 LATAM is well positioned to capitalize on Latin America’s growth potential

Trips per capita1

2010 2018

17% 54% 2,7 2,3 2,5 92% 81% 1,6 1,0 28% 127% 84% 0,5 0,7 0,5 0,6 0,4 0,4 0,2 0,2 0,4

US UK Chile Colombia Brazil Peru Argentina

RPKs growth 2019E – 2038E

2018

6,2% 5,9% 5,9% 5,5% 5,1% Average 4.6% 3,6% 3,2%

Latin America Latin America Africa Asia-Pacific Middle East Europe North America

Source: World Bank and Boeing Commercial Market Outlook 2019-2039 1 Trips per capita refers to both domestic and international aircraft passengers carried by air carriers registered in the country divided by such country’s population. 4 Domestic: Leading market share across markets with positive passenger growth dynamics

Market Share (%)

1st 2nd

+5 mm passenger AIRLINES PERU AIRLINES COLOMBIA AIRLINES BRAZIL growth 66% 1 22% 2 39% 2 2019 vs 2018 Market size 14mm LIM Market size 29mm Market size 95mm

GRU

SCL

AIRLINES CHILE AIRLINES ECUADOR AIRLINES ARGENTINA 62% 2 32% 3 17%1 Market size 15mm Market size 3mm Market size 16mm

Source: Ministerio de Transporte de Perú, EANA Argentina, JAC Chile, ANAC Brasil, Aeronáutica Civil Colombia y Diio Mi; 1 Market share (PAX): October 2019 for Peru and Colombia, November 2019 for Argentina 2 Market share (RPK): November 2019 for Chile and Brazil 5 3 Market share (ASK): September 2019 for Ecuador International: Unparalleled network connecting Latin America

Market Share (%)1

Within South America South America - North America

41% 1st 22% 2nd

LIM

GRU

South America – Asia Pacific SCL South America – Europe

58% 1st 11% 3rd

Source: Diio.net 1 Market share (ASK): September 2019 6 Geographic diversification of LATAM Airlines Group and its subsidiaries

LTM Revenue by Business Unit LTM Revenue by Point of Sale LTM ASK by Country

Colombia Others Ecuador Ecuador Argentina Peru 4% Cargo 4% 2% 2% 4% 10% 8% Colombia Europe 3% 7% Peru Brazil 15% APAC and other International 38% Latin America Domestic SSC 44% 17% 8% Brazil 51% Chile Domestic Brazil Argentina USA 26% 25% 6% 10% Chile 16%

Total revenue = US$ 10.3 bn Total ASK = 147.9 bn

Source: www.latamairlinesgroup.net Information as of September 2019 7 Third Quarter 2019 Financial Summary

(US$ Millions) 3Q19 3Q18 Change

Total Operating Revenues 2,665 2,492 6.9% Passenger 2,340 2,107 11.1% Cargo 252 279 -9.8% Others 73 106 -31.0%

Total Operating Costs -2,396 -2,271 5.5% Fuel -717 -747 -4.0% Ex-fuel -1,679 -1,524 10.2%

Operating Income 269 221 21.8% Operating Margin 10.1% 8.9% 1.2 p.p.

Net Income 86 35 145.0%

EBITDA 645 565 14.1% EBITDA Margin 24.2% 22.7% 1.5 p.p.

Source: www.latamairlinesgroup.net Note: 2018 re-expressed under IFRS16 8 Third Quarter 2019 Operating Statistics

Capacity Traffic 1 % YoY System Capacity Load Factor RASK/RATK (USc) (ASK) (RPK) (% YoY)

International -4.1% -1.8% 85.2% 6.0 (Long Haul & Regional) 54% (+2.0 p.p.) (+0.5%)

BRL 3Q19: +24.3% Domestic Brazil 28% +9.8% +10.4% 82.1% 7.4 (+0.5 p.p.) (+22.7%)

18% SSC Domestic +9.5% +9.3% 81.3% 6.5 (-0.2 p.p.) (-9.5%)

83.6% 6.2 Passenger +1.8% +3.2% (+1.1 p.p.) (+9.1%)

53.6% 15.8 Cargo2 +0.1% +0.8% (+0.4 p.p.) (-6.2%)

1 RASK by business unit includes ticket revenue, breakage, frequent flyer program contribution and ancillary revenues. 2 Excluding the sale of MasAir 9 Delivering on cost initiatives to enhance operational performance

CASK Ex-fuel evolution (US$ cents)

-2%

4.6 4.5

9M18 9M19 Number of Employees ASK / Operating Fleet (million ASK per Aircraft)

1 # employees FTE / AC ASK/Operating Fleet Total aircraft 2

-3.8% 324 310 +0.4% 132 127 455 457 40,974 41,193

Sep'18 Sep'19 LTM Sep'18 LTM Sep'19

Source: www.latamairlinesgroup.net 1 Full time employees per aircraft 2 Excluding short tem leases 10 Guidance 2020

2019E 2020E

International 0% 0% - 2%

Domestic Brazil 8% 7% - 9% Passengers (ASK) Domestic Spanish- 11% 6% - 8% speaking countries Total 4% 3% - 5%

Cargo (ATK) -2% 4% - 6%

Operating Margin (%) ~7% 7.0% - 8.5%

11 Current Financial Situation

Financial Debt and Leverage Liquidity

Financial Debt (US$ million) On Balance Leases (IFRS 16) RCF (US$ million) Net Debt / EBITDA LTM Cash and Equivalents (US$ million) 1 3.500,00 Liquidity 50% 4,5x 4,2x 3.000,00 30% 19,5% 19,3% 10.650 10.517 2.500,00 10%

2.933 3.032 2.000,00 -10%

600 600 1.500,00 -30%

1.000,00 -50% 7.717 7.485 1.381 1.392 500,00 -70%

0,00 -90% 2Q19 3Q19 2Q19 3Q19

Source: www.latamairlinesgroup.net 1 Considers cash & cash equivalents + RCF 12 Proactively reshaping our debt profile

Debt maturity profile1 (US$ million) as of September 30, 20192

-262 make-whole Prepayment LATAM2020 Local Bond Unsecured Secured LATAM2020 1.063 1.013 953 1.013 824 536 322 343 218 215 204 10

4Q19 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Debt type as of September 30, 2019 Rating agencies

PDP 5.0% 2 Ba3 Banks 3.9%

WACD Fleet 3.8% 4.8% BB- Bonds 6.9%

BB- July 10, 2019

Source: www.latamairlinesgroup.net 1 Debt maturity profiles don’t include PDP and short term rolling debt 13 2 Proforma adjusted by liability management Partnership LATAM – Delta: Strategic Agreement

Tender Offer Delta invested $1.9 billion for a 20 percent stake in LATAM through a public tender offer at $16 per share, which was completed on January 3, 2019

Airplane Purchase Delta will acquire four A350 aircraft from LATAM and assume LATAM’s commitment to purchase 10 additional aircraft to be delivered beginning in 2020

Commercial Joint venture, code sharing agreement and $350 million from Delta to support transition costs for strategic partnership

Note: The joint venture and the tender offer is subject to customary closing conditions and governmental and regulatory approvals. 14 3241 aircraft operating fleet with an average age of ~9,0 years

Narrow body: 241 Wide body (PAX): 74 Wide body (Cargo): 9

Owned2: 163 aircraft Owned2: 49 aircraft Owned2: 8 aircraft

Leases3: 78 aircraft Leases3: 25 aircraft Leases3: 1 aircraft

A350 ​A321 A319 ​787 ​A320N ​767 ​767F A320 ​777

Airbus A320N Boeing 787-9 Boeing 767F

Source: Public Company Filings, Offering Memorandum 1 Excludes short-term leases 2 Aircraft included in Property, Plant and Equipment (Own + Financial Leases) 15 3 Operating Leases. Fleet Plan 2019E-2022E

Narrow Body Wide Body Freighter

358 338 345 11 330 11 11 11 77 77 75 77

270 244 250 257

2019E 2020E 2021E 2022E

Fleet Commitments (US$mm)

1,197 796 889 619

16 Refocusing investments to passenger experience and loyalty Cabin experience (US$400 million in cabin retrofits in 2 years)

22 Wide-body aircraft and 150 Narrow-body aircraft

New seat design and layout of passenger accommodation; comfort, segmentation & efficiency

Acquisition of Multiplus (~US$300 million) Worldwide recognition

Best Airline in South Best on-time America performance

. +30 million members . 4th Largest FFP in the world

. Unified value proposition Best “” “Most punctual global . Revenue management “Business Class Lounge” network airline in the “Economy Class” world in 2019”

Source: www.latamairlinesgroup.net 17 Key takeaways

1 LATAM is the leading and largest airline group in Latin America with an unmatched network

2 Delivered resilient operational and financial results despite challenges

3 Disciplined financial policy focused on continuous de-leveraging and balance sheet strengthening

Successful implementation of transformational initiatives including (i) a rigorous cost cutting 4 program, (ii) the reduction of fleet commitments (iii) acquisition of the minority stake in Multiplus, and (iv) transforming the cabin experience

5 Future performance anchored on an unique network strategy and positive business dynamics

18 Exhibits

April 2017 Results of the transformation plan

2015 2016 2017 2018 ‘15 vs. ‘18

1 143 +6,7% 134 135 136  ASK LTM (billion)

Focus on improving 327 329 1 operational performance 307 310 while solidifying the business  Operational Fleet (units) model resilience … -5,2%

7,0% 6,8% 6,0% +180 pbs 5,0%  EBIT Margin (%)2

155 182 +US$ 2 69 401 mm  Net Income LTM Has proven to be a (US$ million) compelling path to drive -219 profitability and cash generation … 1.379 1.159 +US$  Free Cash Flow 549 1.183 mm (US$ million)3 -24

3 Adjusted net financial 5,8x 5,3x 4,5x 4,3x leverage (x)4 Maintaining a rigorous 9,1 8,6 financial discipline for Financial Debt 7,9 7,3  -US$ continuous de-leveraging (US$ billion) 1,8 mmm

Source: Public Company Filings 1 Excludes 2 short-term leased aircrafts, as of December 2018. 2 EBIT margin defined as EBIT divided by Revenue + Other Income. EBIT defined as Revenue + Other Income – Operating Expenses. 20 3 Free Cash Flow defined as Cash Flow from Operating Activities less Cash Flow used in Investing Activities. 4 Adjusted Net Leverage defined as Adjusted Net Debt / LTM EBITDAR. Adjusted Net Debt defined as Gross Debt – Cash & Cash Equivalents + Aircraft Leases (7x LTM Aircraft Rentals). Financial hedging strategy to protect medium term operational margin

Reduced exposure to floating Fuel Hedge (% consumption) BRL Hedge (US$MM)1 rates

U$2.8bn U$4.6bn

37% 65% 66%

29 62% 44% 43% 1% 12 U$0.1bn

1Q20 2Q20 3Q20 4Q20 3Q19 4Q19 1Q20 2Q20 Fixed Floating w/ Hedge Floating

Source: www.latamairlinesgroup.net 21 Year-to-date 2019 Financial Summary

(US$ Millions) 9M19 9M18 Change

Total Operating Revenues 7,560 7,580 -0.3% Passenger 6,528 6,382 2.3% Cargo 784 874 -10.3% Others 248 324 -23.4%

Total Operating Costs -7,169 -7,036 1.9% Fuel -2,185 -2,151 1.6% Ex-fuel -4,984 -4,885 2.0%

Operating Income 391 544 -28.1% Operating Margin 5.2% 7.2% -2.0 p.p.

Net Income -37 -80 -54.4%

EBITDA 1,470 1,574 -6.6% EBITDA Margin 19.4% 20.8% -1,4 p.p.

Source: www.latamairlinesgroup.net Note: 2018 re-expressed under IFRS16 22 Year-to-date 2019 Operating Statistics

Capacity Traffic 1 % YoY System Capacity Load Factor RASK/RATK (USc) (ASK) (RPK) (% YoY)

International 56% +2.3% +3.1% 85.4% 5.7 (Long Haul & Regional) (+0.7 p.p.) (-8.7%)

BRL 9M19: +21.0% Domestic Brazil 26% +4.3% +5.6% 81.4% 6.8 (+1.0 p.p.) (+10.9%)

18% SSC Domestic +11.5% +11.3% 81.7% 6.5 (-0.1 p.p.) (-9.3%)

83.7% 5.9 Passenger +4.4% +5.1% (+0.6 p.p.) (-2.0%)

55.2% 16.6 Cargo2 +0.2% +2.4% (+1.2 p.p.) (-6.8%)

Note: Information as of September 2019 1 RASK by business unit includes ticket revenue, breakage, frequent flyer program contribution and ancillary revenues. 2 Excluding the sale of MasAir 23 Thank you!

April 2017