Finnair Oyj — Earnings Release 2017

Feb 16, 2018

Finnair Group Financial Statement Release 1 January–31 December 2017

Finnair Group Financial Statement Release 1 January–31 December 2017

Finnair Plc Financial Statement Release 16 February 2018 at 9.00 am EET

Q4 comparable operating result increased to 22.9 million euros and FY 2017
comparable operating result tripled to a record-high 170.4 million euros

October–December 2017

·  Revenue increased by 13.2% to 645.3 million euros (569.9)*.
·  Available seat kilometres (ASK) grew by 17.2%.
·  Comparable operating result was 22.9 million euros (1.6).
·  Operating result was 23.5 million euros (18.2).
·  Comparable EBITDAR** was 94.0 million euros (59.4).
·  Net cash flow from operating activities was 92.6 million euros (30.5), and
net cash flow from investing activities was -85.6 million euros (-264.7).***
·  Unit revenue (RASK) decreased by 3.4%.
·  Unit cost (CASK) decreased by 6.6%, and unit cost at constant currency
excluding fuel decreased by 3.1%.
·  Ancillary and retail revenue per passenger grew by 3.2% to 12.60 euros.
·  Earnings per share were 0.11 euros (0.08).

January–December 2017

·  Revenue increased by 10.9% to 2,568.4 million euros (2,316.8)*.
·  Available seat kilometres (ASK) grew by 8.9%.
·  Comparable operating result was 170.4 million euros (55.2).
·  Operating result was 224.8 million euros (116.2), including a sales gain on
an A350 aircraft.
·  Comparable EBITDAR** was 436.2 million euros (270.4).
·  Net cash flow from operating activities was 382.3 million euros (219.7),
and net cash flow from investing activities was -157.5 million euros (
-499.6).***
·  Unit revenue (RASK) increased by 1.8%.
·  Unit cost (CASK) decreased by 2.6% and unit cost at constant currency
excluding fuel increased by 0.3%.
·  The 20-million euro cost-efficiency program was completed in full by the
summer.
·  Ancillary and retail revenue per passenger grew by 5.2% to 12.15 euros.
·  Earnings per share were 1.23 euros (0.55).
·  The Board of Directors proposes to the Annual General Meeting that a
dividend of 0.30 euros per share be distributed for 2017.

*     Unless otherwise stated, comparisons and figures in parentheses refer to
the comparison period, i.e. the same period last year.
**    Comparable operating result + depreciation + lease payments for aircraft.
***  Net cash flow from investing activities in Q4, includes 26.8 million euros
of investments to money market funds or other financial assets maturing after
more than three months. In 2017, these investments decreased in net terms by
82.9 million euros. These investments are part of the Group’s liquidity
management.

Outlook

Global airline traffic is expected to grow strongly in 2018. Finnair expects
increased competition as existing and new operators increase capacity,
particularly on routes linking Europe with Asia and with North America.

Finnair plans on increasing its capacity by more than 15 per cent in 2018, with
most of this growth coming in the first half of the year. Passenger volume is
expected to grow broadly in line with capacity while revenue growth is expected
to be slightly lower.

In line with its disclosure policy, Finnair will issue guidance on its full-year
comparable operating result as part of its half-year report in July.

CEO Pekka Vauramo:

The year 2017 was excellent for Finnair. The favourable business environment
supported our growth together with the right capacity, route network and product
decisions we made in recent years. We ended 2017 in the middle of the fastest
growth phase in Finnair’s history and we plan to continue our transformation and
growth also in 2018.

Towards the end of the year, our route network was expanded by four new long
-haul destinations, namely Goa, Havana, Puerto Plata and Puerto Vallarta. At the
same time, we increased our flight frequency to several Asian and European
destinations. We also invested heavily in our routes to Northern Finland by
increasing our capacity between Helsinki and Northern Finland by more than 20
per cent for the current winter season and by introducing direct flights to
Lapland from London, Paris and Zürich. Lapland is again the number one European
destination for our Chinese customers this winter. Passenger demand on our route
network remained strong from October to December, and we achieved a new
passenger record during the period by carrying nearly three million passengers.
The favorable development continued also in ancillary revenue, cargo and travel
services. Our comparable operating result for the fourth quarter was a record
high 22.9 million euros.

In 2017, our revenue grew to 2,568 million euros and our comparable operating
result more than tripled, reaching 170 million euros. While increasing our
capacity by nearly 9 per cent, we also managed to increase our passenger load
factor by 3.5 percentage points. Our customer satisfaction, measured by our Net
Promoter Score, increased by 4 units to 47.

During the year, we also completed the first phase of our long-haul fleet
renewal. We made significant investments in the development of digital solutions
and services to enhance the customer experience and to improve processes and
ways to work at Finnair. Other significant steps we took included the
commissioning of the new Nordic Cargo COOL terminal and the launch of the new
Finnair Holidays product. These moves enable us to deliver more personalized
services to our customers and to facilitate further growth going forward. In
travel services, Aurinkomatkat Suntours became the largest operator in terms of
the number of customers in the Finnish market in 2017.

I am satisfied with the renewal efforts we made during the year. They have
contributed to our growth and improved customer satisfaction. I am also pleased
with our records in monthly passenger volumes and passenger load factors, as
they indicate that our route network and product have developed in the right
direction.

Everyone at Finnair has made an excellent contribution during this period of
growth and transformation.

The turnaround we have achieved in our operations and financial performance is a
shared accomplishment by everyone at Finnair. As a sign of gratitude for the
transformation that has driven the company forward on the path of profitable
growth, Finnair decided to reward Finnair’s employees with a one-time bonus
announced in December. Throughout this period of growth, we have invested in the
development and well-being of our employees. We will continue these efforts and
our other development efforts in 2018 to support our continued strong growth.

Dividend policy and the Board’s proposal for the distribution of profit

The aim of Finnair’s dividend policy is to pay, on average, at least one-third
of the earnings per share as a dividend during an economic cycle. The aim is to
take into account the company’s earnings trend and outlook,

financial situation and capital needs in the distribution of dividends. In 2017,
earnings per share was 1.23

euros (0.55).

Finnair Plc’s distributable equity amounted to 424,036,052.14 euros on 31
December 2017. The Board of Directors proposes to the Annual General Meeting
that a dividend of 0.30 euros per share be distributed for 2017.

Financial reporting

The publication dates of Finnair’s financial reports in 2018 are as follows:

Interim Report 1 January – 31 March 2018:                        25 April 2018
Interim Report 1 January – 30 June 2018:                          17 July 2018
Interim Report 1 January – 30 September 2018:                 25 October 2018

FINNAIR PLC
Board of Directors

Briefings

Finnair will hold a result press conference on 16 February 2018 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 09 7479 0361
(Finland), 0200 880 389 (Sweden), 0800 358 6377 (UK) or +44 (0)330 336 9105 (all
other countries). The confirmation code is 2226645. To join the live webcast,
please register at:
https://slideassist.webcasts.com/starthere.jsp?ei=1181702 (http://www.messagegear
s.net/c/4/?T=OTE3MDc1NzE%3AMDItdDE4MDQzLTBkOWE2NGRiNWVlNjRlNzA5NmQ1OGZjNWVmNDk3OW
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2lzdC53ZWJjYXN0cy5jb20vc3RhcnRoZXJlLmpzcD9laT0xMTgxNzAy&K=GbbmcSvz0Bj90Sp9O
-gYag)

For further information, please contact:

Chief Financial Officer Pekka Vähähyyppä, tel. +358 9 818 8550,
pekka.vahahyyppa@finnair.com
Director, Financial Communications Mari Reponen, tel. +358 9 818 2037,
mari.reponen@finnair.com
Further information:
Finnair communications, tel. +358 9 818 4020, comms(a)finnair.com

Distribution:
Nasdaq Helsinki
Principal media

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