ANA Holdings Financial Results for FY2013

TOKYO April 30, 2014 – ANA Holdings (hereafter “ANA HD”) today reports its consolidated financial results for fiscal year 2013 (April, 2013 – March, 2014).

Key points
• Record revenues of ¥1,601 billion, with sales growth in each business segment, helped by a gradual recovery in the Japanese economy
• Operating income, recurring profit and net income down compared to the prior year primarily due to increased fuel costs and the weakening of the Japanese yen
• Fuel costs increased by 22% over the prior year, accounting for approximately one quarter of all air transportation business expenses
• Further reform of cost base and strengthening of management to capitalize on the Group’s holding company structure
• Continued strategic investment to take advantage of business opportunities in the expanding Asian market
• Planned cash dividend of ¥3 per share for FY2013

Air Transportation

Domestic Passenger Services
ANA’s domestic passenger numbers and revenues increased year-on-year as it capitalized on the steady increase in business and leisure travel demand.

ANA enhanced its domestic network to improve convenience and choice for passengers by launching new services between Akita and Sapporo, Narita and Hiroshima, resuming the route between Haneda and Ishigaki and introducing more frequent flights between Haneda and Hiroshima/Tokushima.

ANA has also introduced targeted discount fares, such as Tabiwari 75, 60, and 21, and expanded coverage of Tokuwari to all domestic services, to drive growth in demand. These fares extend the reservation and purchase period to up to six months in advance of departure.

ANA is committed to providing the highest possible standards in customer service, introducing a number of improvements to its airport and on-board services during the period. As a result, revenues from domestic passenger services rose by ¥9.1 billion, or 1.4% year-on-year.

International Passenger Services
Demand for business and leisure travel remained solid, with passenger numbers and revenue both exceeding the prior period.

To capitalize on this demand, ANA increased the frequency of flights and introduced larger aircraft on its Narita-Yangon route and increased the frequency of flights on its Narita-Chicago route. In response to burgeoning demand in Asia, ANA also installed larger aircraft into the region from the winter timetable.

ANA continued to capture traffic from passengers visiting Japan and connecting between North America and Asia via Tokyo’s Narita airport.

ANA also remains committed to providing the highest possible standards in customer service for international passengers. This includes the expansion of check-in facilities and airport lounges at Haneda Airport, the introduction of specialist beverages and cuisine on-board and the launch of ANA Wi-Fi Service, an in-cabin Internet service, in certain aircraft from March 2014.

Revenues from international passenger services increased by ¥47.0 billion, an increase of 13.5% year-on-year.

Cargo Services
In domestic cargo services, volumes increased compared to the previous year due to a recovery in courier services. However intense competition led to a decline in unit prices and overall revenues. ANA worked to expand its network, launching a new Narita-Chubu-Okinawa route in August 2013.

On international routes, solid shipments of cargo such as automobile-related components from Japan to North America and effective leveraging of the Okinawa cargo hub to generate business, both within the Asian region and on routes linking Asia and North America, resulted in an increase in cargo volume and revenue over the prior period.

As a result, revenues from domestic cargo services fell by ¥0.1 billion but revenues from international cargo services rose by ¥18.1 billion, an increase of 21.0%.

Others
In October 2013, ANA HD ceased operating flights under the AirAsia Japan brand from its Narita hub and resumed operations in December, 2013 under the renamed Vanilla Air.

During the period of operation under the Vanilla Air brand, approximately 119,000 passengers were carried on domestic flights with a load factor of 70.6%, and approximately 75,000 passengers were carried on international flights with a load factor of 86.0%.

Other income in airline-related businesses, which includes maintenance for third parties and Vanilla Air, was ¥179.1 billion (an increase of 17.8 % over the prior period).

Airline Related, Travel Services, Trade and Retail and Other
In airline related businesses, revenue of ¥189.6 billion was achieved in the year, an increase of 6.4% year-on-year, driven by an increase in contracts for ground support operations, as well as increased revenue from Overseas Courier Services Co., Ltd., which is responsible for international express shipping.

In the travel service segment, revenues for domestic and international travel services grew by 7.7% year-on-year to ¥173.4 billion. This was due to an increase in domestic travel, especially to attractions in the Tokyo area such as Tokyo Disneyland. International travel also increased driven by strong tour demand and the record number of international travelers visiting Japan. However, expenses increased because of the weakening yen, and operating income fell 1.1% year-on-year to ¥4.4 billion.

In the trade and retail business, revenues for the year were ¥110.2 billion, up 12.8% year-on-year, while operating income was ¥3.3 billion, an increase of 14.5% compared to the previous year.

In other services, the solid performance of the building maintenance business resulted in revenues of ¥30.1 billion, up 4.4% year-on-year, while operating income was ¥1.3 billion, an increase of 24.4% compared to the previous year.

Outlook for FY2014 (April, 2014 – March, 2015)
•During fiscal year 2014, Japan’s economy is expected to recover gradually as the beneficial effects of the government’s economic policies take hold. However, factors including the continued high price of fuel, persistent weakness in the Japanese yen and increasingly fierce competition will continue to present headwinds for ANA HD.
•In this business environment, ANA HD will continue to execute its mid-term corporate strategy (FY2014-2016) to strengthen the Group’s core businesses; expand and diversify its earnings and continue to reform its cost structure.
• ANA HD aims to improve profitability by:
- further reducing operational costs and improving supply-demand balance on domestic
passenger routes
-network expansion utilizing a dual-hub model for the Tokyo Metropolitan area on international
passenger routes
- improving convenience in the cargo business by offering combined cargo and passenger flights – network expansion and customer service improvements in its Low Cost Carrier operations.
• In addition to the 787-8 aircraft currently in operation, ANA HD will also be introducing new 787-9 aircraft.
•As a result of these initiatives, ANA HD projects the following consolidated financial performance for the fiscal year ending March 2015. Projected cash dividend per share for the period is ¥4.