Pegasus Hava Tasimaciligi Anonim Sirketi : 2023 Q4 Investor Presentation

2023 FINANCIAL RESULTS PRESENTATION

March 2024

KEY HIGHLIGHTS

Another set of stellar results: EBITDA margin of 31.4% in 2023 marks one of the best performances in the world!

Traffic

• Total ASK grew 22% YoY in 2023, in line with the guidance provided. International ASK grew 26% YoY in 2023, standing 54% higher compared to 2019.
• Total passenger volume increased by 19% YoY in 2023. International passenger volume grew 24% YoY in 2023, standing 36% higher vs. 2019.
• International pax per cyle reached 169 pax in 2023 (173 pax in 4Q23), up from 161 pax in 2022 and 156 pax in 2019.

Financial Performance

• Revenues at EUR2.7bn in 2023 (+9% YoY, +54% vs. 2019). Ancillary rev/pax reached EUR25.4 (+9 YoY, +70% vs 2019).
• RASK-CASKspread amounted to EURc0.89 in 2023 (nearly 2x higher than historic avg.*). EBITDA** reached EUR838mn in 2023 (flat YoY, +45% vs. 2019), corresponding to an EBITDA margin of 31.4% - one of the best performances in the world!
• Net profit is at EUR790mn for 2023 (+83% YoY, +273% vs 2019). EUR420mn deferred tax income was recorded in 12/2023 P&L statement, stemming from the application of inflation accounting at the statutory accounts.

Outlook

• 10%-12%growth planned in total ASK for 2024.
• Market is expected to operate on a balanced demand-capacity supply in 2024, hinting at a flattish trend for yields. On the ancillary/pax front, our budget foresees a 'mid-to-high single digit growth' compared to 2023.
• Cost outlook remains to be challenging, particularly due to wage inflation. Under the current circumstances, CASK non- fuel is expected to increase by 'mid-to-highsingle digit' in 2024 over the 2023 level.
• We are confident that we will once again rank among the 'top EBITDA margin generators in the world' in 2024.
• • Historic average for 2014-22. COVID period (2020 & 2021) excluded from the calculation
  • EBITDA: Core EBIT+Depreciation expenses+55% of short term lease expenses (i.e. EUR14.6mn for 2023)

International ASK

Q4: +18%, 12M: +26% YoY

International Passengers

Q4: +14%, 12M: +24% YoY

International pax/cycle

Q4: +2 pax, 12M: +8 pax YoY

Revenues

Q4: -10%, 12M: +9% YoY

RASK-CASK spread

12M:€c0.89,+c.2x of hist. avg.

EBITDA margin

Q4: 21.5%%, 12M: 31.4%

2024E ASK

+10%-12% YoY

2024E Ancillary per pax

+mid-to-high single digit YoY

2024E CASK non-fuel+mid-to-highsingle digit YoY

ROUTE NETWORK

Size of the international route network reached 99 destinations.

Current Network

51 Countries

135 Destinations

36 Domestic, 99 Int'l

Announced additions to the int'l route network in 2023 & 2024

Istanbul Sabiha Gokcen

→ Plovdiv → Amman → Birmingham

• Kazan →Podgorica → Dortmund

→ Alexandria → Zagreb → Kutaisi

• Cairo *

Ankara

→ Moscow → Warsaw → Krakow

• Podgorica → Lisbon*

Antalya
→ Symkent	→ Astana → St.Petersburg
→ Krakow	→ Warsaw

Izmir

• Podgorica → Warsaw

Dalaman

→ Baku

Bodrum

→ Tel Aviv

Trabzon
→ Tel Aviv	→ Dammam → Erbil
Gaziantep
→ Cologne*	* Announced in 2024

3

OPERATING ENVIRONMENT

International passengers of Pegasus grew by 14% YoY in 4Q23, 24% YoY in 2023.

TÜRKİYE PAX. (mn)

PEGASUS PAX. (mn)

				Domestic
						+16%
			+11%
	11.8	9.6	10.7	50.0	39.3	45.5
	4Q19	4Q22	4Q23	12M19	12M22	12M23
				Domestic
10.0
9.0						+10%
8.0			+16%
7.0			16.1
6.0						12.0
5.0	4.1				10.9
4.0		2.7	3.2
3.0
2.0
1.0
0.0
	4Q19	4Q22	4Q23	12M19 12M22 12M23

		60
		50
		40
	+5%	30
		20
3.4	3.5	10
		0
Jan'23	Jan'24

70

60

50

40

+20%

30

20

0.9 1.1 10

0

Jan'23 Jan'24

International

80.0					+19%
70.0
60.0			+10%		49.2
50.0				43.4
			41.3
40.0							+12%
30.0	23.5	25.0	27.4
20.0
10.0						6.9	7.7
0.0
	4Q19	4Q22	4Q23	12M19 12M22 12M23	Jan'23	Jan'24

International

20.0
18.0				+24%
16.0
14.0		+14%
12.0					+27%
			19.9
10.0			14.7	16.0
8.0
6.0	4.3	5.0
3.6
4.0						1.6
2.0					1.2
0.0
4Q19	4Q22 4Q23	12M19 12M2212M23	Jan'23 Jan'24

90

80

70

60

50

40

30

20

10

0

70

60

50

40

30

20

10

0

Türkiye passenger data is taken from General Directorate of State Airports Authority, domestic passengers are divided by 2 in order to avoid double counting.
Pegasus figures reflect booked passengers, international pax includes charter pax	4

SUMMARY FIGURES - P&L

Industry-leading operating profitability maintaned with the EBITDA* margin standing at 31.4% in 2023.

	2023	2022	YoY
EURmn, ANNUAL	12M	12M	% chg.
Revenues	2,670	2,449	9%
Scheduled pax revenues	1,814	1,755	3%
Ancillary revenues	810	626	29%
Costs	2,150	1,871	15%
Fuel costs	834	832	0%
Personnel costs	303	253	20%
3
EBITDA *	838	835	0%
EBITDA Margin	31.4%	34.1%
Profit before tax	370	403	-8%
Tax income/(expense)	420	28	n.m.
Deferred tax inc./(exp.)	420	28	n.m.
Net profit	790	431	83%

EURmn, QUARTERLY	4Q23	4Q22	% chg.
Revenues	609	675	-10%
Scheduled pax revenues	400	475	-16%
Ancillary revenues	198	192	3%
Costs	564	504	12%
Fuel costs	227	219	4%
Personnel costs	73	86	-15%
EBITDA *	131	230	-43%
EBITDA Margin	21.5%	34.1%

• Given that our functional currency is EUR, inflation accounting primarily impacts our financials through adjustments to deferred tax accounts.
• Deferred tax is computed based on temporary timing differences between statutory accounts and those reported under TFRS. Inflation accounting lead to a substantial increase in the net book value of fixed assets in statutory books, while the net book value in TFRS financials remains unaffected. Consequently, we have recognized a substantial deferred tax asset and a corresponding tax benefit.

* EBITDA: Core EBIT+Depreciation expenses+55% of short term lease

expenses (i.e. EUR14.6mn for 2023)

5

SUMMARY FIGURES - TRAFFIC & KPIs

Outstanding cost management performance against the challenging cost environment: CASK non-fuel at EURc2.26 in 2023.

	2023	2022	YoY	2023	2022	YoY
EURmn	12M	12M	% chg.	Q4	Q4	% chg.
Revenues	2,670	2,449	9%	609	675	-10%
Costs	2,150	1,871	15%	564	504	12%
Fuel costs	834	832	0%	227	219	4%

Total Passengers (mn)	31.9	26.9	19%
International (mn)	19.9	16.0	24%
Total ASK (bn)	58.2	47.6	22%
International (bn)	48.2	38.3	26%
Load Factor	84.8%	83.6%
International	83.1%	82.6%
RASK	4.59	5.14	-11%
CASK	3.69	3.93	-6%
CASK non-fuel	2.26	2.18	4%

8.1 7.1 15%

5.0 4.3 14%

14.6 12.5 17%

11.9 10.1 18%

85.2% 85.5%

84.1% 85.7%

4.17 5.42 -23%

3.86 4.05 -5%

2.30 2.29 0%

International includes charter

6

REVENUES

2023 international scheduled revenues stand 70% higher compared to 2019.

	2019	2022	2023
EURmn	Q4	Q4	Q4	YoY chg.
TOTAL REVENUES	396	675	609	-10%

Domestic scheduled

78

82

77

-6%

International Scheduled KPIs

2023 vs 2019, % growth

International scheduled

190

393

322

-18%

70%

Ancillary	116	192	198	3%
Charter and Other	12	7	11	54%
RASK (EURc)	3.62	5.42	4.17	-23%
	2019	2022	2023
EURmn	12M	12M	12M	YoY chg.
TOTAL REVENUES	1,739	2,449	2,670	9%
Domestic scheduled	336	311	307	-1%

	57%
41%	38%
27%	23%
	9%

International scheduled	884	1,444	1,507	4%
Ancillary	459	626	810	29%

Revenues

Cycle

Seat (mn) ASK (m km) Pax (mn) pax/cycle

Yield

Charter and Other	61	68	46	-33%
RASK (EURc)	3.96	5.14	4.59	-11%

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SCHEDULED PASSENGER REVENUES

In 2023 vs 2019, while total capacity in ASK grew by 32%, the total scheduled unit revenue increased by 50%.

Passenger Yield - Sch. Domestic (TL)

Quarterly	884	Cumulative
		743
626 558		677
563	497
452	442
289
174

Total Scheduled Passenger Revenue / Pax (EUR)

2019-2022-2023

95

135

122

132

1Q19

2Q19

3Q19

4Q19

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

2019

2022

2023

Passenger Yield - Sch. Int'l (EUR)

Quarterly

Cumulative

90.5

55.6

83.4 +50% vs 2019

Ancillary rev. per pax

				129
		84		92	98	94
		79
		75		77
			66
45	60	54	50	61	63

1Q19

2Q19

3Q19

4Q19

1Q22

2Q22

3Q22

4Q22

1Q23

2Q23

3Q23

4Q23

2019

2022

2023

Blended pax yield (sch.)

2019 2022 2023

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ANCILLARY REVENUES

Ancillary revenue/pax reached EUR25.4 in 2033, in line with the guidance.

% share in Total Revenues

	26%	31%	26%	30%
1,100
900				810
700			626
500	459
	315
300
100
-100	12M19	12M21	12M22	12M23

2018 12M

11.6

Ancillary Revenues (EURmn)

			156	107		127	206	143
93	45	93	52
1Q19	1Q21	1Q22	1Q23	2Q19	2Q21	2Q22	2Q23	3Q19

Ancillary revenue per pax (EUR)

2022 12M

23.3

2019 12M

14.9

214	251	192	198
116
116	103

3Q21	3Q22	3Q23	4Q19	4Q21	4Q22	4Q23
	4Q22	2023 12M
	27.1				4Q23
		25.4				24.3

1100 900 700 500 300 100 -100

2018 Q1

2018 Q2

2018 Q3

2018 Q4

2019 Q1

2019 Q2

2019 Q3

2019 Q4

2022 Q1

2022 Q2

2022 Q3

2022 Q4

2023 Q1

2023 Q2

2023 Q3

2023 Q4

9

COSTS

RASK-CASK spread amounted to EURc0.89 in 2023, nearly 2x higher than the historic average spread.

	2019	2022	2023	YoY	2019	2022	2023	YoY
	Q4	Q4	Q4
Cost Items (EURmn)	% chg	12M	12M	12M	% chg
Jet fuel expenses	122	219	227	4%	497	832	834	0%			RASK-CASK spread (EURc)
Personnel expenses	56	86	73	-15%	222	253	303	20%
Maintenance	28	16	23	44%	61	78	72	-8%
Depreciation	64	59	83	40%	244	257	304	18%								0.89
Handling	29	36	44	20%	113	137	181	32%
Navigation	23	28	35	25%	92	110	150	36%
Landing	12	15	22	48%	50	56	89	60%
Pax service & catering	4	4	7	65%	15	14	25	77%
ST lease expenses	0	0	5	n.m.	0	0	27	n.m.	2014	2015	2016	2017	2018	2019	2022	2023
Other expenses	29	41	44	8%	108	133	192	24%
TOTAL COSTS	367	504	564	12%	1,403	1,871	2,150	15%
CASK (€ cent)	3.36	4.05	3.86	-5%	3.19	3.93	3.69	-6%
CASK non fuel (€ cent)	2.24	2.29	2.30	0%	2.06	2.18	2.26	4%

Avg. 2014-22*​0.45

* COVID period (2020 & 2021) excluded from the calculation of the average

10