BOC Aviation : UBS Asian Investment Conference 2024

UBS Asian Investment Conference 2024

29 MAY 2024

Disclaimer

This presentation contains information about BOC Aviation Limited ("BOC Aviation"), current as at the date hereof or as at such earlier date as may be specified herein. This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of BOC Aviation or any of its subsidiaries or affiliates or any other person in any jurisdiction or an inducement to enter into investment activity and does not constitute marketing material in connection with any such securities.

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2

Developments in 2024 YTD

STRONG ASSET

QUALITY

• 688 aircraft owned, managed and on order
• 4.8 years1 average fleet age; 7.9 years1 average remaining lease term
• 99% aircraft utilisation rate

	• Total liquidity of US$5.6 billion2
	• Issued US$500 million of 5Y bonds in January,
	with another US$500 million long 5Y issued in
	May at a spread of T + 87.5, the tightest in the
	Company's history
ROBUST	• Helps to fund 2024 target capex and maturing
LIQUIDITY	liabilities

	• Delivered five new aircraft in 1Q 2024
	• Signed 31 lease commitments in 1Q 2024
PROACTIVE	• Committed to acquire ten aircraft in 1Q 2024
• Closed 1Q 2024 with an orderbook of 229
INVESTMENT
aircraft
STRATEGY

	• Well positioned to support future investment
A	•	A- by S&P Global Ratings
STRONG CREDIT	•	A- by Fitch Ratings

EXPERIENCED

MANAGEMENT AND

OWNERSHIP

• Experienced management team successfully managed through multiple cycles
• Steven Townend succeeded Robert Martin as Chief Executive Officer and Managing Director
• Bank of China provides ongoing support

RATINGS

Long-term sustainable growth

All data as at 31 March 2024 unless otherwise indicated

Notes:

1. Weighted by net book value of owned fleet including finance lease receivables in respect of aircraft classified as finance leases in accordance with IFRS 16 (Leases)

2. As at 31 December 2023.

3

2023: A Year of Record Performance

Key Indicators

2023

US$ million

2022

US$ million

2023 vs 2022

Variance

Total revenues and other income
	2,461

Profit before tax		861

Net profit after tax		764

Earnings per share (US$)	1.10

2,307

29

20

0.03

7%

2,818%

3,708%

3,708%

30th year of unbroken profitability

4

Strong Improvement in Net Profit After Tax

		217
million		764
US$
527	547
	20

Reported net profit	Core net profit after1	Core net profit after 1	Insurance recovery	Reported net profit
after tax		tax	tax	(net of tax)	after tax
	2022				2023

Record performance driven by growth in underlying business and success in Russia-related recoveries

Note:

1. Excludes the impact of write-downs and recoveries related to aircraft in Russia.

5

Robust Balance Sheet and Liquidity

Key Indicators	31 December 2023
Total assets (US$ billion)
	24.2

Total available liquidity (US$ billion)		5.6

Total equity (US$ billion)		5.7

Net assets per share (US$)		8.28

Gross debt to equity (times)		2.9

31 December 2022

22.1

5.3

5.2

7.50

2.9

Variance

10%

6%

11%

11%

Stable

Total assets grew at the fastest pace since 2020

6

Highest Dividend Since IPO

US$

			0.3541					0.3852
	0.2958	0.3129					0.2831
						1
					0.2571		0.2659
							0.27212
		0.1845	0.2153
0.1800	0.1920			0.1173	0.1733
			0.1770
0.1190
	0.1038	0.1284	0.1388	0.1398	0.1098	0.0889	0.1131
0.061
2016	2017	2018	2019	2020	2021	2022	2023
				Interim dividend		Final dividend

Total dividend per share of US$0.3852 in 2023; annual payout ratio consistent at 35% of NPAT

Notes:

1. Represents a payout ratio of 35% of core net profit after tax
2. The recommended final dividend of US$0.2721 per share, pending approval at the AGM, will be payable to shareholders registered at the close of business on the record date, being 7 June 2024

7

Continued Improvement in Key Metrics

Total revenues

US$ million

2,183	2,307	2,461

2021

2022

2023

Operating cash flow net of interest1

US$ million

	1,517	1,643
1,327
2021	2022	2023

Profit before tax

US$ million

		861
639
	29
2021	2022	2023

Net profit after tax

US$ million		764
561
	20
2021	2022	2023

Strong rebound in earnings from growth in underlying business and recoveries from aircraft in Russia

Note:

1. Calculated as net cash flow from operating activities less finance expenses paid

8

Improving Operating Lease Yields

Lease rate factor1

9.7%	9.2%	10.0%

2021

2022

2023

Cost of debt2

		4.1%
2.9%	3.1%
2021	2022	2023

Net lease yield3

7.6%
	7.0%	7.1%
2021	2022	2023

Notes:

1. Calculated as operating lease rental income divided by average aircraft net book value and multiplied by 100%
2. Calculated as the sum of finance expenses and capitalised interest, divided by average total indebtedness. Total indebtedness represents loans and borrowings before adjustments for deferred debt issue costs, fair values, revaluations and discounts/premiums to medium term notes
3. Calculated as operating lease rental income less finance expenses apportioned to operating lease rental income, divided by average aircraft net book value

9

How We Invest

Global

Financial

Crisis

Number of aircraft delivered, purchased and sold

European	Opportunistic PLB
Crisis	acquisitions in the
	down cycle

Covid-19

																19	41								45
														24		13	16
			45							27	(3)	9		14	41		22
									16						7	4
					22		18		17	6									12	46
		14	31		21								43		29
		5				58	61		50			17
(5)	12		6		5				41	44	48
		27			31							23			1
14	17		22	22									11			17	21
	7																5
(12)	(12)	(3)	(10)	(10)	(6)	(21)						(30)		(28)	(12)	(23)		(17)	(20)	(4)
											(33)	(43)	(37)	(34)	(1)
														(7)		(5)	(2)
																		(3)
																			(5)	(12)
																(11)
															(10)
2007	2008	2009	2010	2011	2012	2013 2014	2015	2016	2017	2018	2019	2020	2021		2022	2023	Mar-24
High liquidity	Low liquidity			Low liquidity					High liquidity				Low liquidity
				From orderbook				From PLB			Owned aircraft sold			Acquired by airline lessee at delivery

2023 saw largest fleet growth in our history

10