Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q4 2005 Earnings Presentation
23 slides from Norwegian Air Shuttle Asa's earnings presentation, Feb 9, 2006
Slide 1: Norwegian (NAS) Q4 2005
Norwegian (NAS) Q4 2005 Bjørn Kjos (CEO) Oslo, 9. February 2006 Norwegian Air Shuttle ASA
Slide 2: Since last time...
Since last time... Flybilletter ble Desembertallene: Flyrutene Oslo-Riga skte med 395 prosent ! dyre re Tilsammen 7.338 passasjerer reiste med fly mellom Oslo og Riga i Prisene pa flybilletter | Salgssjef Lars Sande hos Norwegian: desember 2005 - mot 1.482 samme maned Aret for. Det gir en okning _—W
Slide 3: Strong earnings improvement in Q4
Strong earnings improvement in Q4 ● 531 MNOK in turnover in Q405, compared to 331 MNOK in Q404 ● Earnings before depreciation (EBITDA) 5 MNOK ● 48 MNOK earnings improvement despite ATC irregularities 550 MNOK 500 450 400 350 300 250 200 Q4 03 Q4 04 Q4 05 EBITDA MNOK -20 -43 5 EBITDA margin % -9 % -1
Slide 4: Strong revenue growth
Strong revenue growth ● 1.972 MNOK in turnover, compared to 1.210 in 2004 ● 63 % increase in revenue MNOK 2 500 63 % 2 000 1 500 1 000 1 972 1 210 500 959 - 2003 2004 2005 4
Slide 5: Three years and profitable LCC
Three years and profitable LCC ● EBITDA of 55 MNOK in 2005 ● Positive earnings after tax 27 MNOK in 2005 ● 196 MNOK in improved earnings EBITDA 100 50 55 0 -24 -50 -141 -100 -150 2003 2004 2005 Revenue 959 1 210 1 972 EBITDA MNOK -24 -141 55 Earings after tax MNOK -43 -110 27 EBITDA margin % -2 % -1
Slide 6: Stronger cash flow
Stronger cash flow ● Positive cash flow of 12 MNOK in Q405 ● Positive cash flow of 66 MNOK in 2005 ● Cash-balance of 261 MNOK MNOK 40 20 0 -20 -40 -60 -80 Q1 Q2 Q3 Q4 2004 2005 CASH FLOW (TNOK) Fourth quarter Accumulated Form: 2005 2004 2005 2004 Operation activites 19 140 -24 660 120 359 -90 847 In
Slide 7: Continued cabin factor growth
Continued cabin factor growth ● 52 % production increase from Q404 to Q405 ● 75 % growth in passenger traffic (RPK) ● 75% cabin factor in Q405, up 10 %-points Cabin Factor 80 % 922 75 % 607 349 70 % 65 % 71 % 65 % 75 % 60 % Q4 03 Q4 04 Q4 05 Cabin Factor ASK PAX (000)* 427 554 924 *Tickets sold for
Slide 8: Continued cabin factor growth
Continued cabin factor growth ● 50 % production increase from 2004 to 2005 ● 76 % growth in passenger traffic (RPK) ● 78% cabin factor in 2005, up 11 %-points Cabin Factor 3464 80 % 75 % 2301 70 % 65 % 1149 60 % 62 % 67 % 78 % 55 % 2003 2004 2005 Cabin Factor ASK PAX (000)* 1 235 2 074 3 290 *Ticket
Slide 9: From domestic to international player
From domestic to international player ● International turnover increased by 143 % since 2004 ● Domestic turnover increased by 26 % since 2004 Revenue 1 200 000 1 000 000 800 000 600 000 400 000 200 000 0 2003 2004 2005 Domestic turnover International turnover 9
Slide 10: Strengthen competitive position
Strengthen competitive position ● Over 34 % market share on key domestic routes ● Capacity increased 21 % % Market Share 38 % 36 % 34 % 32 % 30 % 37 % 28 % 36 % 26 % 33 % 30 % 30 % 30 % 24 % 28 % 22 % 24 % 20 % Bergen Trondheim Stavanger Tromsø Q4 04 Q4 05 10
Slide 11: Still a guarantist for low fares
Still a guarantist for low fares ● Domestic prices are down 5 % Q405 compared to Q404 ● International prices are down 8 % Q405 compared to Q404 ● Norwegian`s international fares varies due to introduction prices on new routes, and seasonalities Norwegian's average ticket price - index (Q1 03 = 100)
Slide 12: Win-win
Win-win ● Yield is down and fares are cheaper ● Cheaper fares gives higher volume ● Higher volume gives profitable operation Yield development Q405 vs, Q404 RASK development Q405 vs, Q404 16 % 9% 8% 3% 2% Short dom/int Long domestic Central Europe Southern Europe -2 % -6 % -12 % Short dom/int Long d
Slide 13: Growth in Corporate Accounts
Growth in Corporate Accounts ● Corporate accounts increased 29 % in 2005 compared to 2004 ● Corporate accounts increased 36 % since Q4 2004 ● Corporate customers are absorbing our expansion in the domestic market Corporate Accounts 29% 36 % 2004 2005 Q4 04 Q4 05 13
Slide 14: Cost target 2005 achieved
Cost target 2005 achieved ● Average unit costs of 0.57 NOK in Q405 ● Unit cost of 0.55 NOK for 2005 ● Total cost level is down 6 % (115 MNOK) compared to 2004 CASK Cost pr ASK - 10 %* 0,65 0,60 0,55 0,50 0,45 0,40 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Target 2006** Target (*) Percentage decrease ex. fuel pr
Slide 15: Increased fleet and crew utilization
Increased fleet and crew utilization ● Crew utilization of 694 block ● Aircraft utilization of 9.1 block hours pr crew per year, up 14 hours pr plane per day, up 20 % % from 2004 (609) from 2004 (7,6) Block hours/crew/year Block hours/plane/day 14 % 20 % 700 9 600 8 500 7 400 6 300 5 2003 2004 2005
Slide 16: Lean organization
Lean organization ● Carrying more than 7000 passengers per employee ● Non core activities outsourced Passengers pr employee 12000 10000 8000 6000 4000 2000 0 05 04 e 04 e 04 04 4 e 4 05 05 05 00 00 20 20 20 20 20 20 20 r2 20 t2 n g p n g Ai ia Je y n ou li li n be c ab er wi di eg an er f ly gr sy o
Slide 17: Lower distribution costs
Lower distribution costs ● Distribution costs per sold ticket of NOK 19,4 down 49% from Q404 (NOK 38) ● Initiative in cooperation with Amadeus is expected to bring costs even further down Distributioncost per pax 70 60 50 49 % 40 30 20 10 0 2003 2004 2005 17
Slide 18: Continued expansion in 2006
Continued expansion in 2006 ● Expected production increase in the magnitude of 50 % compared to last year (*) – Expects another two aircrafts (18 total,17 operational) ● 30 % on domestic operations – Stavanger-Bergen, Base Bergen ● 70 % international Capasity increase 2006 vs 2005 (ASK) ASK 120 % 10
Slide 19: 19
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Slide 20: Cost reducing initiatives in 2006
Cost reducing initiatives in 2006 Unit cost - CASK 0,90 ● Higher utilization 0,80 ● Implementation of new 0,70 distribution systems 0,60 0,50 ● Apprentice program 0,40 0,30 0,20 0,10 0,00 2003 2004 2005 Andre kostnader 0,11 0,07 0,09 Teknisk vedlikehold 0,09 0,07 0,06 Handlingkostnader 0,12 0,07 0,0
Slide 21: Norwegian Student Academy
Norwegian Student Academy ● Two years apprentice program in the tourist industry, supported by the Norwegian government ● Certificate of apprenticeship 21 Foto Olav Stendal ©
Slide 22: Expectations for 2006
Expectations for 2006 Expected business environment : ● Increased competition on international routes ● Strong price competition on northbound routes ● Seasonal fluctuation on yield Expected results: ● Q1 06 unit cost in the range of Q1 last year – Fuel, domestic expansion ● Q1 06 will, as expected,
Slide 23: Thank you, - and fly Norwegian!
Thank you, - and fly Norwegian! 23
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