Finnair carried a record number of passengers in Q4; full-year comparable operating profit totalled EUR 169.4 million

October-December 2018

- Revenue increased by 5.8% to EUR 683.1 million(645.3)*.

- Available seat kilometres (ASK) grew by 9.0%.

- Passenger load factor (PLF) was 76.9% (-3.4 percentage points).

- Comparable operating result was 9.2 EUR million(22.9). Operating result was EUR 55.9 million(23.5).

- Net cash flow from operating activities was EUR 37.5 million(92.6), and net cash flow from investing activities was EUR -49.5 million(-85.6).**

- Unit revenue (RASK) decreased by 2.9%. Unit revenue at constant currency decreased by 2.4%.

- Unit cost (CASK) decreased by 0.7%. Unit cost at constant currency excluding fuel decreased by 4.3%.

- Earnings per share were EUR 0.29(0.11).

January-December 2018

- Revenue increased by 10.4% to EUR 2,834.6 million(2,568.4)*.

- Available seat kilometres (ASK) grew by 14.8%.

- Passenger load factor (PLF) was 81.8% (-1.5 percentage points).

- Comparable operating result was EUR 169.4 million(170.4). Operating result was EUR 207.5 million(224.8).

- Net cash flow from operating activities was EUR 383.1 million(382.3), and net cash flow from investing activities was EUR -194.0 million(-157.5).**

- Unit revenue (RASK) decreased by 3.9%. Unit revenue at constant currency decreased by 2.6%.

- Unit cost (CASK) decreased by 3.2%. Unit cost at constant currency excluding fuel decreased by 6.2%.

- Earnings per share were EUR 1.08(1.23).

- The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.274 per share be distributed for 2018.

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

** In Q4, net cash flow from investing activities includes EUR 2.3 million of investments in money market funds or other financial assets maturing after more than three months. In January-December, these increased in net terms by EUR 81.8 million. These redemptions are part of the Group's liquidity management.

Outlook

Guidance on 15 February 2019:

Global airline traffic is expected to continue growing in 2019. Finnair expects increased competition as capacity is added, particularly on routes linking Europe with Asia as well as in short-haul traffic. The slowdown in the economy of Finnair's key markets and the continued uncertainties surrounding global trade, including from Brexit, could impact the demand for air travel and cargo.

Finnair plans to increase its capacity by approximately 10 per cent in 2019, down from its 14.8 per cent capacity growth in 2018. This growth is mainly focused on the Asian market. Revenue is expected to grow at a somewhat slower pace than capacity in 2019.

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 Topi Manner:

The year 2018 was Finnair's third year of accelerated growth, but it also had a different side to it. In the first half of the year, a favorable demand environment supported our rapid and profitable growth in both passenger traffic and travel services. However, in the second half of the year, competition intensified especially on certain European routes. In addition, the price of jet fuel temporarily spiked and the future growth rate of the global economy became more uncertain.

Our full-year traffic growth - a 14.8% increase in capacity and an 11.6% increase in number of passengers to 13.3 million - resulted in a growth of 10.4% in revenue, with a total revenue of EUR 2.8 billion. Our full-year comparable operating result was EUR 169.4 million, thus remaining at the previous year's level (170.4).

We continued investments that our renewal requires. Even if our operating result weakened towards the end of the year, our long-term target continues to be profitable, sustainable growth.

Our market environment also has more uncertainty than a year ago, as the growth in global economy seems to soften. Our goal is to create value for our shareholders, customers and employees alike. Therefore, it is important that we take care of our profitability so that we can develop in all these areas and create value in the more challenging environment we operate in. In practice this means that we invest into items that are key for our future, we question our way of working in a healthy manner, we develop our productivity and react to changes in external environment. At the same time, we continue to develop our customer experience and people experience in long-term.

As the new CEO, I have seen how passionate both our customers and our people are about Finnair. This forms a strong foundation on which to build Finnair's future together. I want to thank our customers for the trust they have placed in Finnair, and all Finnair employees for the good performance in 2018.

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 2018, earnings per share were EUR 1.08(1.23). Finnair Plc's distributable equity amounted to EUR 392,868,533.76 on 31 December 2018. The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.274 per share be distributed for 2018.

Financial Reporting in 2019

The publication dates of Finnair's financial reports in 2019 are the following:

Interim Report 1 January - 31 March 2019:     24 April 2019

Half-year report 1 January - 30 June 2019:    17 July 2019

Interim Report 1 January - 30 September 2019: 22 October 2019

FINNAIR PLC

Board of Directors

Briefings

Finnair will hold a results press conference on 15 February 2019 at 11:00 a.m. and an analyst briefing at 12:30 p.m. at its office located 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 +358 9 7479 0361 (Finland), 0200 880 389 (Sweden), 0800 358 6377 (UK) or +44 (0)330 336 9105 (all other countries). The confirmation code is 9344771. To join the live webcast, please register at: https://slideassist.webcasts.com/starthere.jsp?ei=1231175

Contributed by Finnair