Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q3 2018 Earnings Presentation
23 slides from Norwegian Air Shuttle Asa's earnings presentation, Oct 25, 2018
Slide 1: Norwegian Air Shuttle ASA Q3 2018 Presentation
Norwegian Air Shuttle ASA Q3 2018 Presentation 25 October 2018
Slide 2: Highlights Q3 2018
Highlights Q3 2018 Added four 737 MAX 8s and one 787-9 to operations Sold eight 737-800s with delivery in 2018 and 2019 EBITDA of NOK 2,266 million (1,991) Carried out the 5th UNICEF flight, this time to Chad together with Norway’s Minister of International Development Took the position as the large
Slide 3: Load factor of 90.5% in Q3
Load factor of 90.5 % in Q3 33 % growth in capacity (ASK) 32 % growth in traffic (RPK) Load ASK Load Factor - 1.2 p.p. 30,000 100% 90.7 % 91.3 % 91.7 % 90.5 % 90% 84.4 % 84.6 % 82.2 % 82.6 % 80.5 % 81.4 % 25,000 80% 70% 20,000 60% 15,000 50% 40% Available Seat KM (ASK) 10,000 30% Load Factor 20% 5,0
Slide 4: Passengers (million)
10.9 million passengers in Q3 (+11 %) 12 + 11 % 11 10 9 8 7 6 5 4 Passengers (million) 3 2 1 0 Q3 09 Q3 10 Q3 11 Q3 12 Q3 13 Q3 14 Q3 15 Q3 16 Q3 17 Q3 18 PAX (m ill) 3.1 3.8 4.6 5.2 6.0 7.1 7.7 8.6 9.8 10.9 PAX 12 m os. rolling (m ill) 10.2 12.5 15.0 17.3 19.8 23.6 25.2 28.3 32.3 36.4 4
Slide 5: Continued growth at all key airports
Continued growth at all key airports 5 Source: 12 month rolling passengers as reported by Avinor, Swedavia, Copenhagen Airports, Finavia, Gatwick Airport and Aena
Slide 6: Revenue per country
Revenue per country 6 % revenue growth in the Nordics on a 12 months rolling basis Most significant absolute growth in the US, both in Q3 and 12 months rolling Growth in revenue by origin in Q3 18* (y/y): Revenue split by origin in Q3 18*: 6 * 12 months rolling (estimated)
Slide 7: A network of more than 60 intercontinental routes
A network of more than 60 intercontinental routes 7
Slide 8: Adding 25 new aircraft to own operations in 2018
Adding 25 new aircraft to own operations in 2018 Deliveries 787-9 Deliveries 737-800 and 737 MAX Re-deliveries 737-800 2018: +3,724 seats +2,640 seats -744 seats 8
Slide 9: Financials
Financials 9
Slide 10: Profit and loss
Profit and loss NOK million Q3 2018 Q3 2017 Passenger revenue 11,062 8,263 Ancillary passenger revenue 1,919 1,498 Other revenue 406 313 Total operating revenue 13,387 10,074 Personnel expenses 1,692 1,399 Aviation fuel 3,681 1,994 Airport and ATC charges 1,266 1,091 Handling charges 1,432 1,016 Tec
Slide 11: Slight increase in unit revenue
Slight increase in unit revenue Total revenue increased by 33 % y/y Q3 unit passenger revenue (RASK) +0.4 % to 0.40 (-0.5 % in constant currency) despite increased average flying distance of 13 % Ancillary revenue per passenger increased by 16 % to NOK 177 Cargo revenue increased by 97 % to NOK 177
Slide 12: Operating cost EBIT level per ASK
Unit cost excl fuel decreased by 10 % Unit cost excl fuel decreased by 10 % (decreased by 12 % in constant currency) Unit cost incl fuel increased by 1 % (decreased by 2 % in constant currency) 0.60 CASK excl fuel and ownership cost 0.55 Ownership share of CASK 0.50 Fuel share of CASK 0.45 Operating
Slide 13: Cost dominated by spike in fuel price
Cost dominated by spike in fuel price Higher fuel cost (+38 % per ASK) driven by spot price (+37 %) and a stronger USD vs NOK (+3 %), partly offset by efficiency gains Lower personnel cost (-9 % per ASK) due to increased utilization of crew as growth moderates Higher handling cost (+6 % per ASK) due
Slide 14: Best in class on fuel efficiency
Best in class on fuel efficiency Source: The International Council on Clean Transportation (ICCT), published in September 2018 based on 2017 figures. Only transatlantic routes included.
Slide 15: Balance sheet
Balance sheet NOK million Q3 2018 Q3 2017 Intangible assets 1,342 644 Prepayment on aircraft 8,346 5,313 Aircraft and aircraft parts 31,759 22,649 Other fixed assets 431 362 Tangible fixed assets 40,536 28,323 Fixed asset investments 1,185 1,675 Total non-current assets 43,064 30,642 Assets held for
Slide 16: Cash flow
Cash flow NOK million Q3 2018 Q3 2017 Profit before tax 1,600 1,421 Paid taxes -1 -9 Depreciation, amortization and impairment 451 401 Changes in air traffic settlement liabilities -3,912 -2,143 Changes in receivables 1,740 782 Other adjustments 368 505 Net cash flows from operating activities 245 9
Slide 17: Proven ability to finance the growth
Proven ability to finance the growth Strong financial flexibility through a wide debt product portfolio Focus on reducing cost of capital going forward 12% Weighted average cost of capital* 10% 3M LIBOR 8% 6% 4% 2% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Deliveries per year 2008 20
Slide 18: Capital expenditure and financing
Capital expenditure and financing Capex commitment (all aircraft incl PDP) USD 1.75 billion for 2018 USD 2.2 billion for 2019 Focus on reducing capex commitment Liquidity Undrawn credit facility of NOK 300 million Long-term financing Financed deliveries in Q3 18 with AFIC and SLB Secured financing f
Slide 19: Outlook
Outlook 19
Slide 20: Outlook
Outlook Markets and business Current booked volumes indicate a slight positive yield trend, but load may be affected during winter season Expect tough competition and high oil prices Estimated production growth (ASK) 38 % in 2018 (previous estimate: 40 %) 15-20 % in 2019 Fuel hedging 31 % of Q4 2018
Slide 21: Unit cost estimates for 2018 and target for 2019
Unit cost estimates for 2018 and target for 2019 Unit cost estimates 2018 NOK 0.290-0.295 excl fuel and depreciation (unchanged) NOK 0.435-0.440 incl fuel and depreciation (previous estimate: 0.425-0.430) Assumptions: Fuel price of USD 701/mt (681), USD/NOK 8.00 (7.88), EUR/NOK 9.55 (9.42). Based on
Slide 22: Going forward
Going forward Fully committed to delivering on long-term strategy Entering a more moderate growth phase Focus on cost reduction initiatives Secured financing for the remaining deliveries in 2018 Continuing the fleet renewal program CAGR of 5-10 % (ASK) for the next four years 3-5 % on narrow body op
Slide 23: Norwegian offers more than 500 routes to over 150 destinations
Norwegian offers more than 500 routes to over 150 destinations 23
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