French stock report - Air France - KLM

FRA

Air France - KLM outperforming 97% of stocks October 18, 2017 17:30 CEST

NEWS BITES - EUROPE

Air France - KLM (FR:AF), France's 4th largest Travel & leisure company by market cap, was unchanged to close at EUR13.28. Compared with the CAC 40 Index which rose 22.4 points (0.4%) in the day, the relative price change was -0.4%. The volume was 0.8 times the average daily trading volume of 4.8 million shares. In the French market of 612 stocks traded today, the stock has a 6-month relative price strength of 97 indicating it is outperforming 97% of the market.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, High Performance Indicators

SECTION 2 BEARISH SIGNALS

Fundamentals, Technicals, Low Performance Indicator, Moving Annual Return, Beta, Aggregate Volumes, Prices and Turnover Period

SECTION 3 RANKING

Global, Independent Ratings

SECTION 4 FINANCIALS

SECTION 5 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 6 STOCK BUZZ

SECTION 1 AIR FRANCE - KLM BULLISH SIGNALS

1.1 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.2. Compared with the rest of the market the stock is undervalued and ranks in the top 5% of stock by value of Q Ratio.

+ As per the Du Pont analysis, Return on Equity is high at 41.2%. This is computed as net profit margin of 2.1% times asset turnover [sales/assets] of 1.1 times leverage factor [total assets/shareholders' equity] of 17.9.

1.2 Undervaluation [compared with sector average]:

+ Price/Earnings of 8.2 [38.3].

+ Price/Sales of 0.2 [0.7]. We estimate Air France - KLM stock is trading at a current year Price/Sales of 0.2 and a forward year Price/Sales of 0.2.

+ Return on Equity 41.2% [6.9%].

+ Return on Assets 2.3% [1.7%].

+ Return on Capital Employed 6.4% [3.5%].

1.3 Technicals:

+ The 4.9% discount to 12-month high of EUR13.97 against the 177.8% premium to 12-month low of EUR4.78 suggests the stock continues to push for new highs.

+ In the last three months the stock has hit a new 52-week high once.

+ A two-bagger in the past year, the present value of EUR1,000 (PV1000) invested one year ago in Air France - KLM is EUR2,614, for a capital gain of EUR1,614.

PV10001-week1-month1-year
AF.FR9989842,614
CAC 40 Index1,0051,0191,194

+ The present value of EUR1,000 (PV1000) invested five years ago in Air France - KLM is EUR2,233, for a capital gain of EUR1,233.

+ 5 years Multiplier in EUR = 2.233x

+ Compound Annual Growth Rate (CAGR) in EUR = 17.4%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Air France - KLM is $US2,017, for a capital gain of $US1,017.

+ 5 years ago EUR 1 equalled USD 1.3032

+ 5 years Multiplier in USD = 2.017x

+ Compound Annual Growth Rate (CAGR) in USD = 15.1%

Oct 18, 2017: EUR 1 equals USD 1.18

1.4 High Performance Indicators:

DescriptionValueRank In Market
Price to Sales0.2In Top 3%
Price/MAP2001.35In Top 5%
Today's TurnoverEUR48.3 million (US$56.9 million)In Top 5%

SECTION 2 AIR FRANCE - KLM BEARISH SIGNALS

2.1 Fundamentals:

+ Total Liabilities/EBITDA of 9 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 0.7% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

2.2 Technicals:

+ The price decreased 0.2% in the last week and 1.6% in the last month.

2.3 Low Performance Indicator:

DescriptionValueRank In Market
Total Debt to Equity6.6In Bottom 1%

2.4 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 2 of the last 5 years. An investment a year ago in AF would have produced a return of 161.4%.

AFClose (EUR)Annual Return %
Oct 1813.28161.4
1 Yr ago5.08(20.4)
2 Yrs ago6.38(2.0)
3 Yrs ago6.51(13.1)
4 Yrs ago7.4925.9

Close 5 years ago EUR5.95

2.5 Beta:

+ Beta: the Beta of Air France - KLM stock is 0.7. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

2.6 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ Paris: AF.FR 3,640,000 [VI of 0.8] volume 99.89% of aggregate. Price: EUR13.28.

+ Frankfurt: AFR.FRA 4,050 [VI of 0.3] volume 0.11% of aggregate. Price: EUR13.28.

+ Aggregate volume: there were 3.6 million shares of Air France - KLM worth EUR48.4 million traded today. The aggregate volume was 0.8 times average trading of 4.6 million shares.

SECTION 3 RANKING

3.1 Global Rank [out of 47,797 stocks] and Rank in the Europe Region [out of 8,438 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)4.7B2,801619
Total Assets (US$)26.9B1,385322
Revenue (US$)29.2B466129
Net Profit (US$)930M1,062232
Return on Equity %41.2860190
Net Profit Margin %2.123,3573,768
Price/Earnings8.23,624777
PV$1000 (1Year) US$*2,8061,049186
US$* Change (1Year) %184.41,007173

* 1 year ago EUR 1 = USD 1.1

Oct 18, 2017: EUR 1 equals USD 1.18

3.2 Independent Ratings

Air France - KLM was ranked 14 in World Airline Awards list of Top 100 Airlines Companies in 2016; an improvement over a year from rank 15 in 2015.

It is the 289th largest by revenue in the Forbes Global 2000.

It is placed 16/573 in BSS News Bites' ranking of French performers in the past year, a percentile ranking of 97.

SECTION 4 AIR FRANCE - KLM FINANCIALS

Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)29.430.929.5
Pretax (USD M)974.7236.974.6
Net (USD M)938139.7(234.5)
EPS (EUR)1.62910.115(0.67)

Net profit was up 571.2% from US$139.7 million in 2015 to US$938 million in 2016. Earnings Per Share (EPS) was up 1,316.1% from 11.50c to EUR1.63.

SECTION 5 AIR FRANCE - KLM PROFILE

5.1 Activities

Air France-KLM is one of the world's leading airline companies. Net sales break down by activity as follows: - passenger transportation (77.5%): 71.4 million people transported in 2009/10; - freight transportation (11.6%; No. 2 worldwide): 1.5 Mt of merchandise transported; - maintenance services (4.6%); - other (6.3%): primarily catering service activities (Servair and KLM Catering Services) and charters (Transavia.com). At the end of March 2010, the group had a fleet of 625 airplanes divided between the domestic fleets of Air France (262, of which 148 owned and 114 leased) and KLM (113, of which 33 owned and 80 leased), and the regional fleets of KLM Cityhopper (48, of which 32 owned and 16 leased), Brit Air (43, of which 16 owned and 27 leased), City Jet (27, of which 16 owned and 11 leased), Regional (64, of which 23 owned and 41 leased), VLM Airlines (17, of which 15 owned and 2 leased) and other (51, of which 8 owned and 43 leased).

5.2 Industry & Sector

Classification LevelName of Sector
Industry GroupHotels & Entertainment Services
IndustryLeisure & Recreation
Economic SectorConsumer Cyclicals
Business SectorCyclical Consumer Services

5.3 Top Management

The chief executive officer and chairman is Jean-Marc Janaillac.

5.4 Issued Capital

Based on 300,219,278 issued shares the market capitalisation is EUR4 billion (US$4.7 billion).

SECTION 6 STOCK BUZZ

Corporate Wire

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October 16: AIR FRANCE - KLM: Early redemption of the OCEANEs maturing on February 15, 2023

Air France-KLM informs today the holders of its bonds convertible into and/or exchangeable for new or existing shares maturing on February 15, 2023 (ISIN FR0011453463, the "OCEANEs") of its decision to exercise its early redemption option on 15 November 2017 in respect of all of its outstanding OCEANEs, pursuant to the provisions of the first paragraph of article 4.1.8.1.3 "Early redemption at the option of the Issuer" of the securities note approved by the Autorite des Marches Financiers on March 19, 2013 under visa number 13-077 (the "Securities Note").

As of today, 53,383,705 OCEANEs remain outstanding out of a total of 53,398,058 OCEANEs initially issued.

Unless the holders of the OCEANEs exercise their conversion/exchange right in accordance with the terms described below, the OCEANEs will be redeemed in cash on 15 November 2017 at par, i.e.

October 03: AIR FRANCE - KLM: Completion of the capital increases reserved to China Eastern Airlines and Delta Air Lines

Air France-KLM announces the completion of the capital increases reserved to China Eastern Airlines and Delta Air Lines. The 75,054,098 related new shares have been admitted to the regulated market of Euronext Paris and Amsterdam. These capital increases, announced on 27 July 2017, have been approved by the General meeting of shareholders on 4 September 2017.

Each of China Eastern Airlines and Delta Airlines now holds 10% of Air France-KLM's share capital and has consequently one director representing it at Air France-KLM's board of directors.

Air France-KLM does realize today a further major strengthening of its strategic partnerships with its new shareholders China Eastern Airlines and Delta Airlines.

August 11: AIR FRANCE - KLM : Availability of documents ahead of the Shareholders' Meeting of September 4 2017

Shareholders of Air France-KLM are invited to participate to the extraordinary session of Air France-KLM Combined Ordinary and Extraordinary Shareholders' Meeting which will be held on Monday, September 4, 2017 at 9 AM at the Hotel Pullman Paris Centre Bercy - 1 rue de Libourne, 75012 Paris.

In this context, the information relating to this Shareholders' Meeting referred to in article R.

July 28: AIR FRANCE - KLM : First Half 2017 Results

FIRST HALF 2017

Robust traffic resulting in an improved load factor, up 1.4 pts compared to last year Confirmation of the positive trend in Group (Passenger + Transavia) unit revenue per available seat kilometer (RASK) ex-currency: +1.9% during the Second Quarter First Half operating result 353 million euros, up 135 million euros TRUST TOGETHER

Major advances in strengthening the network of alliances Air France Pilot agreement paving the way for the creation of Joon Air France Cabin crew signed 5-year labor agreement OUTLOOK

Long haul forward bookings for coming four months above previous year's level Unit revenue variation at constant currency expected to be slightly up for the Second Half 2017 Despite the negative effects of the increased load factor and profit sharing on the unit cost evolution, the Group is expecting a unit cost reduction for 2017 between 1.0% and 1.5% at constant currency, fuel price and pension related expenses.

April 04: Air France - KLM announces AGM

Air France - KLM has announced its Annual General Meeting will take place on Tuesday, May 16.

Contact: +33 (0)1 41 56 88 85

Physical Address: 45 rue de Paris POBox 90112 95747 Roissy Charles de Gaulle France

State/Province/Country: France

Country of Incorporation: France

Exchange: Euronext - Paris

ISIN: FR0000031122

FR:AF; EPA:AF; PA:AF; FP:AF; AIRF.PA

PermID: 4295866970

Air France Klm Sa, Air France-Klm, Astoria Financial Corp

Source: www.BuySellSignals.com