Finnair Financial Statements Release 1 January–31 December 2019*

Year 2019 ended with a strong quarter; full-year comparable operating profit totalled 162.8 million euros

October-December 2019

• Earnings per share were 0.17 euros (0.24).
• Revenue increased by 13.4% to 774.9 million euros (683.4)**.
• Unit revenue (RASK) increased by 2.5%. Unit revenue at constant currency increased by 1.8%.
• Unit cost (CASK) increased by 2.3%. Unit cost at constant currency excluding fuel increased by 1.3%.
• Fuel costs increased by 26.0 million euros (+17.9%) of which the impact of fuel price*** was 12 million euros.
• Comparable operating result was 31.2 million euros (26.5). Operating result was 34.7 million euros (73.1).
• Net cash flow from operating activities was 120.1 million euros (68.3), and net cash flow from investing activities was -185.7 million euros (-51.5).****
• Number of passengers increased by 11.0% to 3.5 million (3.2).
• Available seat kilometres (ASK) grew by 10.6%.
• Passenger load factor (PLF) was 79.0% (+2.1 points).

January-December 2019

• Earnings per share were 0.49 euros (0.70).
• Revenue increased by 9.2% to 3,097.7 million euros (2,836.1)**.
• Unit revenue (RASK) decreased by 1.9%. Unit revenue at constant currency decreased by 2.4%.
• Unit cost (CASK) increased by 0.7%. Unit cost at constant currency excluding fuel decreased by 1.2%.
• Fuel costs increased by 106.3 million euros (+18.3%) of which the impact of fuel price*** was 42 million euros.
• Comparable operating result was 162.8 million euros (218.4). Operating result was 160.0 million euros (256.3).
• Net cash flow from operating activities was 564.5 million euros (503.6), and net cash flow from investing activities was -513.2 million euros (-202.6).****
• Number of passengers increased by 10.3% to 14.7 million (13.3).
• Available seat kilometres (ASK) grew by 11.3%.
• Passenger load factor (PLF) was 81.7% (-0.1 points).
• The Board of Directors proposes to the Annual General Meeting that a dividend of 0.20 euros per share be distributed for 2019.

* Quarterly and full-year figures for 2018 have been restated to reflect the adoption of the IFRS 16 standard, changes in accounting principles relating to aircraft components and the changes in the presentation of profit and loss, balance sheet and cash flow statements. The restated figures were published on 21 March 2019. In addition, IFRS interpretation committee (IFRIC) concluded in its meeting in September 2019 that customer (passenger) compensations related to delayed or cancelled flights need to be treated as deductions of revenue instead of passenger and handling costs. Due to this, Finnair has made a decision to apply the change retrospectively for quarterly and full-year figures for 2018 and 2019 in order for the years to be comparable. More information on the restatement is available in Note 20.

** Unless otherwise stated, comparisons and figures in parentheses refer to the comparison period, i.e. the same period last year.

*** Fuel price including impact of currencies and hedging.

**** In Q4, net cash flow from investing activities includes 59.7 million euros of investments in money market funds or other financial assets maturing after more than three months. In 2019, these increased in net terms by 53.4 million euros. These investments are part of the Group's liquidity management.

Outlook

Guidance on 7 February 2020:

We are currently seeing strong performance continuing in Europe. As stated earlier, the direct financial impact of coronavirus during Q1 2020 is relatively limited, even if the mainland China cancellations continued until end of Q1 2020.  

We currently forecast our capacity to increase by approximately 4 per cent in 2020. Due to the situation with coronavirus, we do not provide a full year revenue estimate at this time. The guidance will be updated in connection to Q1 2020 interim report.

CEO Topi Manner:

Year 2019 was a year of rapid growth. In addition to that, it stood out due to our fantastic, and highly committed personnel. We have now moved to a new phase of sustainable, profitable growth covering the years 2020-2025.

The year 2019 was characterised by an unstable operating environment due to slower economic growth in our main markets as well as uncertainties in world trade. As a result, year 2019 was a volatile one for us but it ended with a strong quarter as the market situation improved: I was particularly happy with the strength of our European traffic and the improving unit revenues.

With capacity growth of 11.3 per cent in passenger traffic and an increase of 10.3 per cent in passenger volume, we reached a new all-time high of 14.7 million passengers, leading to 9.2 per cent growth in revenue. Our revenue for the year amounted to 3.1 billion euros and our comparable operating result for the full year was 162.8 million euros, down from 218.4 million euros in the previous year primarily due to changes in fuel price.

A central objective for sustainable, profitable growth is to grow cost-effectively, allowing us to maintain our healthy balance sheet and cash flow while carrying out significant investments of approximately 3.5-4.0 billion euros to substantially reduce our emissions and enable profitable growth. Above all, the investments are aimed at the renewal of our narrow-body fleet to make it more fuel-efficient, economic and environmentally friendly. This represents a significant step towards our long-term goal of carbon neutrality.

During my first year as the CEO, I have been pleased to see how passionate our customers and employees are about Finnair. This provides an ideal foundation for the implementation of our new strategy. I want to take this opportunity to thank our shareholders and customers for their trust in Finnair. I am also grateful to everyone at Finnair for their strong commitment and hard work in 2019.

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 over 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 2019, earnings per share were 0.49 euros (0.70).

Finnair Plc's distributable equity amounted to 434,179,503.56 euros on 31 December 2019. The Board of Directors proposes to the Annual General Meeting that a dividend of 0.20 euros per share be distributed for 2019.

Financial Reporting in 2020

The publication dates of Finnair's financial reports in 2020 are the following:

• Interim Report for January-March 2020 on Wednesday 29 April 2020
• Half-Year Report for January-June 2020 on Friday 17 July 2020
• Interim Report for January-September 2020 on Wednesday 28 October 2020

FINNAIR PLC
Board of Directors

Briefings

Finnair will hold a results press conference (in Finnish) on 7 February 2020 at 11:00 a.m. at its office located at Tietotie 9, Vantaa.

An English-language telephone conference and webcast will begin at 1:00 p.m. Finnish time.