Air France - KLM (AF: EUR11.26) in 3rd consecutive rise; +1c [0.1%] 23 February 2024

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Air France - KLM's (FR: AF EUR11.26) stock price extended its gains on Friday, rising an additional 1.0c (0.1%) to close at EUR11.26.

This brought its 3-day rise to 3.0%; compared with the CAC 40 Index which rose 173.5 points (2.2%) in the three days for a relative price increase of 0.8%.

Cumulative volume in the 3 days was 0.8 times the average 3-day volume of 1.4 million shares. There were 1,600,000 shares worth EUR18 million ($19.5 million) traded today.

Air France - KLM is France's 3rd largest Travel & leisure company by market cap.

AIR FRANCE - KLM (AF) Stock Dashboard [traded in Euro, EUR] End-of-Day Fri, Feb 23

http://www.airfranceklm-finance.com

P/E3.8Market CapEUR3 billion [US$3 billion]
EPS (FY2022)30.0cExchangeFRENCH [CHI-X (France), Paris]
Shares Outstanding257,053,613SectorTravel & Leisure [of 13 stocks]
LastEUR11.26VI1.1
AF in IndicesCAC Consumer Services [of 48 stocks]Currency1.000 EUR = 1.081 USD
EPS Growth (Q3 2023 vs Q2 2023)-71.7PV$1000 (1 yr)EUR633
US$644
Today's Volume1,600,000
Ave Daily Volume1,428,796 shares
52-Week Price Range10.17 - 18.60

A year ago the exchange rate was USD 1 = 0.94 EUR. USD1000 would have bought EUR941. A year ago the Air France - KLM share price was EUR17.80. EUR941 would have bought 52.9 Air France - KLM shares on that day. Those 52.9 shares would be worth EUR596 at today's share price of EUR11.26. At today's exchange rate of USD1=0.92 EUR this is equivalent to USD644. PV$1000= $644.

Price Volume Snapshot past 3 months (Euro)

Past month to HighLowVWAPVolume Index *
23 Feb 202412.410.811.50.9
23 Jan 202413.811.412.50.9
22 Dec 202314.011.312.61.2

[*Volume Index of 0.9 means volume for the month was 0.9 times its 12-month average]

[VWAP is defined as the Volume Weighted Average Price]

INDEX

SECTION 1 RECENT NEWS AND RESEARCH

SECTION 2 TODAY'S BEARISH SIGNALS

SECTION 3 ONGOING BEARISH PARAMETERS

SECTION 4 TODAY'S BULLISH SIGNALS

SECTION 5 ONGOING BULLISH PARAMETERS

SECTION 6 CORPORATE PROFILE

SECTION 7 FINANCIALS FY 2022

SECTION 8 TOP SHAREHOLDERS

Read more...

ANNEXURE

APPENDIX I DATA & ARCHIVE DOWNLOAD CENTER

APPENDIX II STOCK IDENTIFIERS

GLOSSARY

SECTION 1 RECENT NEWS AND RESEARCH

Financial News

Quarterly Report (Q3/2023):

Quarterly Report Analysis Q3 2023: Air France - KLM reports 54% sequential rise in Quarterly Net Profit

Air France - KLM (FR:AF), announced net profit of EUR930m ($985m) for the quarter-ended 30 September 2023 [Q3/2023], up 54% from the previous quarter and up 102% from the year-earlier period [Q3/2022].

Corresponding Quarter comparison

Year-on-Year [September 30]2023202220232022Change
DescriptionEUR mEUR m$ m$ m(%)
Total Revenue8,6598,1129,1677,929.9Up 6.7
EBITDA1,7481,2101,850.51,182.8Up 44.5
EBIT1,0955351,159.2523Up 104.7
Pre Tax Profit/(Loss)1,0955351,159.2523Up 104.7
Profit/(Loss) after Tax930460984.6449.7Up 102.2
Net Assets(1,589)(3,313)(1,682.2)(3,238.6)Improvement

SECTION 2 TODAY'S BEARISH SIGNALS

2.1 Rank in the bottom 16% by Relative Valuation in the French market

DescriptionValueRank
EV/EBITDA5.9In Bottom 16%

2.2 Rank in the bottom 23% by Price Performance in the French market

DescriptionValueRank
PV1000 [1 yr] $644In Bottom 23%

2.3 Downtrend

Price/Moving Average Price of 0.82 and negative MACD:

- The Price/MAP 200 for Air France - KLM is 0.82. Being less than 1 is a bearish indicator. It is lower than the Price/MAP 200 for the CAC 40 Index of 1.09, a second bearish indicator. The stock is trading below both its MAPs and the 50-day MAP of EUR12.26 is lower than the 200-day MAP of EUR13.66, a third bearish indicator. The 200-day MAP has decreased to EUR13.66, a fourth bearish indicator.

- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 11.24 minus the 26-day EMA of 11.53 is negative, suggesting a bearish signal.

Past Quarter:

The Worst 3 weeks in the past quarter

In the past quarter the steepest fall of 8.8% took place in the week beginning Monday January 08. The fall was exacerbated by volume of 1.2 times average.

Mon-FriChange %CAC 40 Index Change %Vol Ind [1 is avg]
Jan 08-12-8.80.61.2
Nov 20-24-7.90.81
Feb 05-09-5.50.80.9

Trailing Relative Strength (6 months) at 31 percentile:

- The stock has a 6-month relative strength of 31 in the French market of 553 stocks which means it has underperformed 69% of the market.

2.4 Other Bearish Signals

- Total Liabilities/EBITDA of 11.6 is more than 5, this compares unfavourably with the Joseph Piotroski benchmark of 5.

- Return on Capital Employed of 1.8% versus sector average of 4.0%.

SECTION 3 ONGOING BEARISH PARAMETERS

3.1 Past four-years

- Air France - KLM fell for a fourth consecutive year. In the past four years it has fallen EUR34.53 (75.4%).

3.2 Rank in the bottom 19% by Performance in the French market

DescriptionValueRank
Net Profit Margin %2.8In Bottom 19%

3.3 Rank in the bottom 14% by Productivity in the French market

DescriptionValueRank
Return on Capital Employed [ROCE] %1.8In Bottom 14%

3.4 Present Value of EUR1000 Invested in the Past [3 Mo, 1 Yr, 3 Yrs]; The Worst Periods with PVEUR1000 < 961

PVEUR1,0003 mo ago1 yr ago3 yrs ago
AF.FREUR960EUR633EUR447
Travel & Leisure sectorEUR942EUR989EUR1,694
CAC 40 IndexEUR1,098EUR1,089EUR1,379

3.5 The Worst Periods [3 Mo, 1 Yr, 3 Yrs] with Price Change % < -3.9

3-Year price change of -55.3% for Air France - KLM underperformed the change of 38.2% in the CAC 40 Index for a relative price change of -93.5%.

Price Change %QuarterYear3 Years
Air France - KLM-4-36.7-55.3
Travel & Leisure sector-5.8-0.174.3
CAC 40 Index9.29.238.2

3.6 MCap: 5-Year Decrease of EUR2 B [$2B] (42%)

In the past 5 years Market Capitalization has decreased by EUR2.1 billion (42%) from EUR5 billion to EUR2.9 billion. Based on a dynamic start date of 5 years ago, there have been declines in MCap in 4 out of 5 years.

PriceMCap (EUR M)MCap ($ M)
LastEUR11.262,894.43,130.1
1 Year agoEUR17.804,575.64,841.7
2 Years agoEUR20.581,748.81,984.2
3 Years agoEUR25.222,143.22,597.9
4 Years agoEUR45.793,8924,200.6
5 Years agoEUR59.015,0155,685.5

3.7 Annualised Period-based Total Shareholder Returns [TSR %]: The Worst Periods with TSR < -13.1%

TSR %1 yr3 yrs5 yrs10 yrs
AF.FR-36.7-23.4-28.2-13.2

3.8 Declining Volume, down 54% in 5 years

In the past five years, Average Daily Volume of Trading (ADVT) has decreased 54.0% to 1.4 million shares.

Avg. Daily Volume Traded 12 months ended Feb 23, million shares

YearADVT
20241.4
202312.2
20224.7
20215.9
20203.1

3.9 Declining VWAP, down 72% in 5 years

In the past five years Volume Weighted Average Price (VWAP) has decreased by 71.5% to EUR13.91. Based on a dynamic start date of five years ago, there has been no rise in VWAP over the last 5 years.

Past five years, 12 months ended Feb 23 (EUR)

YearHigh PriceVWAPLow Price
202418.613.9110.17
202322.3915.010.7
202230.0621.9418.21
202142.8722.8513.16
202064.248.7737.62

3.10 Declining share turnover, down 35% in 5 years

In the past five years, average daily share turnover has decreased 35.1% to EUR19.8 million ($21.4 million). This suggests decreased liquidity.

Past five years, 12 months ended Feb 23 (EUR million)

YearAverage Daily Turnover
202419.8
202320.4
202221.1
202127.2
202030.5

3.11 Satisfies 4 out of 9 criteria of Joseph Piotroski [pass mark 5]:

- Positive net income.

- Positive operating cashflow.

- Good quality of earnings [operating cashflow exceeds net income].

- Improvement in long-term debt to total assets from 0.5 to 0.4.

But does not meet the following 5 criteria of Joseph Piotroski:

- Return on Assets improvement.

- Improvement in current ratio.

- Total shares on issue unchanged (or reduction in total shares on issue).

- Improvement in gross margin.

- Improvement in asset turnover.

SECTION 4 TODAY'S BULLISH SIGNALS

4.1 Relative Value Indicators: Undervaluation compared with sector averages

Price/Earnings:

Air France - KLM stock is trading at the tenth lowest P/E multiple in the Total French Market ex CAC 40 Index.

Price/Earnings of 3.8 < Travel & Leisure sector (of 13 stocks) avg of 14.5:

- The price-to-earnings ratio of 3.8 indicates undervaluation compared with sector average of 14.5 and market average of 19.6.

4.2 Relative Value Indicators: Undervaluation compared with Index averages and bond yield

- Earnings yield of 26.6% is more attractive compared with the French average earning yield of 5.1%.

- The earnings yield of 26.6% is 9.2 times the 10-year bond yield of 2.9%.

(All figures in %)

Earnings Yield26.6
French avg5.1
Bond Yield2.9

SectorP/E
Forbes 2000Stock: 3.8; Sector: 17.3undervalued

4.3 3-DAY: WEAK MOMENTUM UP

AF increases 3.0% on below average volume 0.8 times average. Compared with the CAC 40 Index which rose 173.5 points (or 2.2%) in the 3-days, the relative price increase was 0.8%.

Week 8 of 2024: Up 2.1%; the price ranged between a high of EUR11.26 on Friday Feb 23 and a low of EUR11.11 on Wednesday Feb 21.

FebAir France - KLMClose [EUR]Change %Comment
Fri 23In 3rd consecutive rise11.260.1VI*=1.1
Thu 22In 2nd consecutive rise11.251.3Price rise on beating relative strength
Wed 21Adds EUR46 million ($50 million) (1.6%) in MCap, top heavyweight rise in Travel & leisure sector11.111.6Top Rise; RPC=1.5%

* RPC - Relative Price Change is % price change of stock less % change of the CAC 40 Index.

[Volume Index (VI); 1 is average]

4.4 Rank in the top 13% by Relative Valuation in the French market

DescriptionValueRank
Price to Sales0.1In Top 1%
Price/Earnings3.8In Top 7%
Cash to MCap %21.4In Top 13%

4.5 Rank in the top 25% by Price Performance in the French market

DescriptionValueRank
1-week Price Change %2.1In Top 25%

4.6 Other Bullish Signals

MCap/Total Assets:

- The company is cash rich with Cash to Market Capitalisation at 21.4%.

SECTION 5 ONGOING BULLISH PARAMETERS

5.1 Rule of 40

The stock scores a favorable score exceeding 40 when using the Rule of 40 (Revenue Growth plus EBITDA margin). Y.o.y revenue growth of 84%, EBITDA margin is 11.5% and the sum of the two 95.9% needs to exceed 40%.

5.2 Rank in the top 92% by Liquidity in the French market

DescriptionValueRank
Ave daily turnoverEUR19 million ($21 million)In top 92%

5.3 Rank in the top 18% by Size in the French market

DescriptionValueRank
Annual RevenueEUR26.4 billion ($28.5 billion)In Top 7%
Ave daily TurnoverEUR18 million ($19.5 million)In Top 8%
MCap$3 billionIn Top 18%

5.4 Improved EBIT Margins:

EBIT margin is positive and has increased from -24.8% to 1.3% in the past year.

FYEBIT Margins (%)
20221.3
2021-24.8
2020-62.5
20191.3
20182.3

5.5 Growth > 13% for Revenue and Net Profit:

- Net Profit margin is positive and has seen consecutive rises in recent quarters. [All figures in %]

Qtr-endedRevenue GrowthNet Profit GrowthNet Profit Margin
Sep 23 [Q3 vs Q2]13.65410.9
Jun 23 [Q2 vs Q4]--8

5.6 - Revenue growth rate has shown signs of recovery in recent years. [compared with previous year, all figures in %]

FYRevenue Growth
202284
202129
2020-59

5.7 Satisfies one criterion of Benjamin Graham

- "An earnings-to-price yield of at least twice the triple-A bond"; the stock's earning yield of 26.6% is 9.2 times the triple-A bond yield of 2.9%.

SECTION 6 CORPORATE PROFILE

6.1 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). It is France's 3rd largest Travel & leisure company by market capitalisation.

6.2 Contact Details

Websitehttp://www.airfranceklm-finance.com
Physical Address45 rue de Paris POBox 90112 95747 Roissy Charles de Gaulle France
Phone+33 (0)1 41 56 88 85
Fax+33 (0)1 41 56 70 29

6.3 Industry & Sector [of 96 stocks]

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

SECTION 7 FINANCIALS FY 2022

7.1 AF Financials Summary:

Year ended DecFY2022FY2021FY2020
Sales ($ B)28.415.411.9
Pretax ($)367.9M(3.8B)(7.5B)
Net ($)783.2M(3.5B)(7.6B)
EPS (EUR)3(30.2609)(70.6087)

EPS recovered to EUR3.0 in FY2022 [ y.e. 31 Dec 2022]

+ There was a turnaround in Net profit from a loss of $3.5 billion in FY2021 to net profit of $783.2 million in FY2022.

+ Earnings Per Share (EPS) recovered from a loss of EUR30.26 in FY2021 to EUR3.0 in FY2022.

7.2 Financials, FY 2022 [year-ended 31 December 2022 ]

Air France - KLM Revenue up 84%

Air France - KLM (FR:AF) reported total revenue for the year-ended 31 December 2022 [FY2022] of EUR26.4b ($28.3b), up 84% from EUR14.3b ($16.2b) in the previous year [FY2021].

7.3 Annual growth in Revenue

Year-ended31 December [FY/2022]31 December [FY/2021]
Revenue, EUR Billion26.414.3
Revenue, $ Billion28.315.4
Growth in Revenue %84.429.1
Net Profit, EUR728m-3.3b
Net Profit, $781m-3.5b
EPS30.0cEUR-6.0

Major changes compared with previous year (FY2022 vs FY2021):

Favourable Changes:

- Sales revenue up 84.4% from EUR14.3b ($16.2b) to EUR26.4b ($28.3b)

- Total revenue to total assets up from 0.5 to 0.8

- Sales and marketing expenses to Sales down from 46.4% to 31.3%

- Current Debtors to Total Assets up from 4.9% to 5.5%

Unfavourable Changes:

- Current ratio down 9.9% from 0.9 to 0.8

- Fixed Assets to Total Assets down from 55.5% to 53.9%

- Total Liabilities to EBITDA of 11.6 compares unfavourably with the Joseph Piotroski benchmark of <5

- Total Liabilities to Operating Cash Flow of 7.3 compares unfavourably with the Joseph Piotroski benchmark of <4. However, it has improved by 67.7% from the previous year's ratio of 22.5.

Currency Conversion (December 31, 2022): $1 = EUR0.93

Currency Conversion (December 31, 2021): $1 = EUR0.88

Three-year record of growth and performance:

In the last 3 years Total Revenue averaged EUR17.3B ($18.5B), EBITDA averaged EUR-0.7B (-US78.3cB) and Net Profit averaged EUR-3.2B (-$3.4B). Compound Annual Growth Rate (CAGR) averaged -1.0% for Total Revenue, 35.9% for Net Profit and -2.6% for EBITDA.

DescriptionAnnual (EUR M)Annual ($ M)3-year Avg (EUR B)3-year Avg ($ B)3-year CAGR %
Total Revenue26,39328,325.817.318.5(1)
EBITDA3,0383,260.5(0.7)(0.8)(2.6)
Operating Profit342367(3.4)(3.6)(0.4)
Net Profit728781.3(3.2)(3.4)35.9

Three-year record of EBITDA, Operating Profit, Net Profit, ROA and ROCE

In 2022 Net Profit Margin of 2.8% was above its 3-year Avg of -27.8% (All Figures in %)

Description20223-year Avg
EBITDA Margin11.5(11.2)
Operating Profit Margin1.3(28.7)
Net Profit Margin2.8(27.8)
Return on Assets2.3(10.5)
Return on Capital Employed1.8(18.2)

7.4 Profiles of Top Management

Benjamin Smith

CEO

Benjamin Smith is a senior airline industry veteran, having spent twenty years at Air Canada before joining Air France-KLM as Chief Executive Officer.

In 1990, while at university, he started part time as a Customer Service Agent at Air Ontario. In 1992 he followed an entrepreneurial path and established his own retail corporate travel agency, successfully running this business for eight years. In 2002 he joined Air Canada, envisioning and subsequently leading its Tango subsidiary.

Anne-Marie Couderc

Non-Executive Independent Chairman

Mrs. Anne-Marie Couderc has served as Non-Executive Chairman of the Board of AIR FRANCE KLM SA since May 15, 2018. She has previously been Independent Director of the Company since May 19, 2016. She is Chair of the Appointments and Governance Committee and Member of the Audit Committee. Anne-Marie Couderc, a graduate in private law, holds a French Professional Lawyer's Certificate (Certificat d'Aptitude a la Profession d'Avocat). Ms. Couderc began her career in 1972 as a lawyer with the Paris Bar. She then became Chief Legal Officer in Hachette's industrial division between 1979 and 1982, before fulfilling different functions within the Lagardere Group from 1982 to 1995: she was successively Deputy General Secretary, Director of Human Resources and Communication, then Deputy CEO of the Hachette Filipacchi Associes (Press Division). In 1997, she was named Chief Executive Officer followed, from 2006 to 2010, Secretary-General of Lagardere Active (press and audiovisual activities). From 2011 to 2017, she was Chair of the Presstalis Group (press distribution). She has been company director since June 30, 2017. In parallel, Anne-Marie Couderc has pursued a political career: having been elected to the Paris Council in 1983, until 2001 she successively served as Advisor then Deputy to the Mayor of Paris between 1989 and 2001. Having been elected a Deputy of the French National Assembly in 1993, she subsequently joined the government in 1995 where she was appointed Secretary of State to the Prime Minister, responsible for Employment, then Minister for Employment and Social Affairs, responsible for Employment, until 1997. Ms. Couderc is an Officer of the Legion of Honor and of the National Order of Merit. She serves as Director and President of the Remuneration Committee of Ramsay Generale de Sante since 2014; director of Transdev SA since 2012 and President of the Audit Committee of Transdev SA since 2017; among others.

SECTION 8 TOP SHAREHOLDERS

Top 6 shareholders

Name of the Share HolderNumber Of Shares% of Capital
French State7351733328.6
Dutch State239059869.3
CMA CGM231348259.0
China Eastern Airlines120815204.7
Delta Airlines, Inc.74545552.9
Employees30846431.2

% held by Top 6 shareholders 55.7%

APPENDIX I DATA & ARCHIVE DOWNLOAD CENTER

AF: EXCEL TABLES ARE AVAILABLE TO EXPORT DATA:

+ PRICE VOLUME - 5-YEAR HISTORY

+ PEER COMPARISON - STOCK IN TRAVEL & LEISURE SECTOR AND STOCK IN INDICES

AF: LINKS IN HTML TO FURTHER INFORMATION:

+ NEWS ARCHIVES - AF PAST 1 YEAR IN HTML:

+ PRICE VOLUME CHARTS IN HTML

+ USD vs EUR EXCHANGE RATE CHARTS IN HTML

APPENDIX II STOCK IDENTIFIERS

ISIN: FR0000031122

PermID: 4295866970

RIC: AIRF.PA

LEI: 969500AQW31GYO8JZD66

GLOSSARY

ADVT: Average Daily Volume of shares Traded

Cash/MCap: Cash plus Liquids/Market Capitalisation (times)

Current Ratio: Current Assets/Current Liabilities (times)

EBIT Margin : Earnings Before Interest and Tax/Revenue (%)

Earnings Yield: Earnings Per Share/Share Price (%)

Moving Average Price (n periods): Sum of Prices for each Period/Number of Periods

PV1000: Present value of 1000 invested 1 year/'n' years ago

Price Close/Moving Avg Price: Latest Price/Moving Average Price

Price/Earnings: Share Price/Earnings Per Share (times)

Price/Sales: Share Price/Sales Per Share (times)

Relative Price Change [RPC]: Relative price change is price change of stock with respect to Benchmark Index

Relative Strength (6 Months): Price close today/Price close 6 months ago, then ranked by percentile within the entire market.

Return on Assets: Net Profit/Total Assets (%)

TSR: Total Shareholder Returns is expressed as an annualized rate of return for shareholders after allowing for capital appreciation and dividend

Volume Index (VI): Number of shares traded in the period/Average number of shares traded for the period

Volume Weighted Average Price (VWAP): The Volume Weighted Average Price (VWAP) is the summation of turnover divided by total volume in the same period.

Disclaimer: While this document is based on information sources which are considered reliable, it has been prepared without consideration of your specific investment objectives, financial situation or needs, so you should carry out your own analysis or seek professional investment advice before an investment decision is made. The document contains unbiased, independent equities data and analysis from Jupiter International (Australia) Pty Ltd trading as BuySellSignals (AFS Licence 222756), who provide round the clock analysis on every stock, every sector, every market, every day. BuySellSignals is not a broker, and does not have executing, corporate advisory or investment banking functions. Jupiter International (Australia) Pty Ltd, its directors, employees and contractors do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.

Data for the BuySellSignals algorithms is drawn from annual reports, company websites and similar sources of publicly available data. It should be used as a guide only.

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