Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q3 2017 Earnings Presentation
26 slides from Norwegian Air Shuttle Asa's earnings presentation, Oct 26, 2017
Slide 1: Norwegian Air Shuttle ASA Q3 2017 Presentation
Norwegian Air Shuttle ASA Q3 2017 Presentation 26 October 2017
Slide 2: Highlights Q3 2017
Highlights Q3 2017 Norwegian celebrated 15 years Start-up of 14 new intercontinental routes, to destinations such as Singapore, Denver and Seattle Added four Boeing 737 MAXs, one 737-800 and five 787- 9 Dreamliners to operations Norwegian Air UK (NUK) given final approval by the US Department of Tra
Slide 3: 9.8 million passengers in Q3 (+14 %)
9.8 million passengers in Q3 (+14 %) + 15 14 % 9 10 8 9 8 7 7 6 6 5 5 4 4 3 3 Passengers (million) Passengers (million) 2 2 1 1 0 0 Q3 08 Q3 08 Q3 09 Q3 09 Q3 10 Q3 10 Q3 Q3 11 11 Q3Q3 12 12 Q3Q3 1313 Q3Q3 1414 Q3 Q31515 Q3 Q316 16 Q3 Q317 17 Pax (mill) 2.6 3.1 3.8 4.6 5.2 6.0 7.1 7.7 8.6 9.8 Pax 12
Slide 4: Available Seat KM (ASK)
Increasing load despite high ASK growth 25 % growth in capacity (ASK) 26 % growth in traffic (RPK) Load ASK Load Factor +0.4 p.p. 22,000 100% 21,000 90.7 % 91.3 % 91.7 % 20,000 90% 84.4 % 84.6 % 19,000 81.8 % 82.2 % 82.6 % 81.4 % 80.5 % 18,000 80% 17,000 16,000 70% 15,000 14,000 13,000 60% 12,000 11
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: Accelerating growth in the US
Accelerating growth in the US 11 % passenger growth in the Nordics 79 % and 25 % growth in the US and Spain respectively Growth in number of passengers in Q3 17 (y/y): Split passengers by origin in Q3 17: 6
Slide 7: 21 % revenue growth in Q3
21 % revenue growth in Q3 Q3 unit passenger revenue (RASK) -5 % to 0.40 (-4 % in constant currency) Average flying distance increased by 10 % 10 % growth in ancillary revenue per passenger (NOK 153) + 21 % 10,000 8,000 6,000 4,000 2,000 NOK million 0 Q3 13 Q3 14 Q3 15 Q3 16 Q3 17 Total revenue 4,878
Slide 8: A portfolio of 65 intercontinental routes
A portfolio of 65 intercontinental routes 8
Slide 9: Adding 32 new aircraft in 2017
Adding 32 new aircraft in 2017 Deliveries 787-9 Deliveries 737-800 and 737 MAX Re-deliveries 737-800 2017: +3,096 seats +4,296 seats -744 seats 9
Slide 10: Financials
Financials 10
Slide 11: Q3 EBT of NOK 1.4 billion
Q3 EBT of NOK 1.4 billion 12 mths rolling 12 mths rolling Q3 17 Q3 16 Chg Q3 17 Q3 16 Chg Revenue 10,074 8,331 1,743 29,131 25,243 3,887 EBITDAR 3,180 2,573 607 4,920 4,896 23 EBITDA 1,991 1,725 266 1,385 2,177 -792 Pre-tax profit (EBT) 1,351 1,270 81 664 506 158 Net profit 1,032 992 39 817 564 253
Slide 12: Clean EBITDA* of NOK 1.9 billion
Clean EBITDA* of NOK 1.9 billion 12 mths rolling 12 mths rolling NOK million Q3 17 Q3 16 Chg Q3 17 Q3 16 Chg Revenue 10,074 8,331 1,743 29,131 25,243 3,887 EBITDA as reported 1,991 1,725 266 1,385 2,177 -792 Other losses/gains 486 -178 664 1,110 -761 1,872 EBITDA ex. other losses/gains 1,505 1,904 -
Slide 13: EBITDA (ex. other losses/gains) bridge
EBITDA (ex. other losses/gains) bridge * Ex. Other losses/gains 13
Slide 14: YTD split of unit revenue and cost by currency
YTD split of unit revenue and cost by currency Currency split gross RASK*: Currency split CASK: * Includes ancillary and other revenue in addition to passenger revenue 14
Slide 15: Operating cost EBITDA level per ASK (CASK)
Unit cost driven by fuel and wetlease/passenger care Both unit cost ex. and incl. fuel increased by 6 % (9 % in constant currency) NOK 0.03 of CASK is related to wetlease, passenger care and bought days off 0.50 Unit cost ex. depr. and fuel Irregularities Fuel share of unit cost 0.45 0.40 0.19 0.12
Slide 16: Increased unit cost while expanding globally
Increased unit cost while expanding globally Higher fuel cost (+7 % per ASK) driven by spot price (+8 %), partly offset by a weaker USD vs NOK (-4 %) Higher personnel cost (+10 % per ASK) due to ramp-up (FTEs +47 %) and bought days off Higher leasing cost (+12 % per ASK) due to a higher share of lea
Slide 17: Comparison of unit cost incl. depreciation
Comparison of unit cost incl. depreciation Sources: Based on official full-year 2016 annual reports •Foreign exchange rates used are equivalent to the daily average rates corresponding to the reporting periods and as stated by the Central Bank of Norway • Note: For some carriers the available financ
Slide 18: NOK 1.0 billion cash flow from operations in Q3
NOK 1.0 billion cash flow from operations in Q3 Highlights Cash development Q3 6,000 Strong liquidity with NOK 5.6 bn in 5,567 5,000 cash at the end of Q3 Cash flow from operations of NOK 4,000 3.8 bn the last 12 months (2.6 bn) NOK million 3,000 Invested NOK 2.3 bn the last 12 2,297 2,233 2,000 mon
Slide 19: Financing on track
Financing on track Expected capex (all aircraft incl. PDP) USD 0.7 bn for 2017 USD 2.1 bn for 2018 PDP financing / liquidity SLB of a total 34 737-800s (of which 28 in 2017) Paid down unsecured bond in July (NOK 1 bn) Undrawn credit facility of NOK 325 million (of NOK 1 bn) Long-term financing Finan
Slide 20: Net debt reduced by close to 3 billion YTD
Net debt reduced by close to 3 billion YTD Added two 787-9s, six 737 MAXs and three 320neos on balance the last 12 months NOK 18.3 net debt (reduced from 19.3 bn in Q2 2017) 11 % equity ratio (10 %) 45,000 40,000 Aircraft 35,000 financing Aircraft 17,775 22,649 30,000 16,145 25,000 20,573 PDP and bo
Slide 21: Outlook
Outlook 21
Slide 22: Capacity adjusted forward bookings
Capacity adjusted forward bookings 22 The graph shows booked and paid travels. Bookings per October 23, 2017 and October 24, 2016 (corresponding weekday).
Slide 23: Outlook for 2017
Outlook for 2017 Markets and business Positive and stable markets in the Nordics Capacity adjusted booking volumes ahead of last year An estimated production growth (ASK) of 25 % (unchanged) Fuel hedging 53 % of Q4 2017 at USD 486 and 25 % of 2018 at USD 494 Unit cost estimate of NOK 0.42 (unchanged
Slide 24: Outlook for 2018
Outlook for 2018 Markets and business Negative impact from expected introduction of Swedish passenger tax An estimated production growth (ASK) of 35 % Increasing distance driven by mix (long haul) Unit cost estimate of NOK 0.38-0.39 ex. depreciation and 0.40-0.41 incl. depreciation Assumptions: Fuel
Slide 25: Going forward
Going forward Solid bookings ahead of Q4 Awarded ‘Airline of the Year’ at the 2017 CAPA Aviation Awards for Excellence Focus on global expansion and strong growth in number of staff, routes and aircraft Strong liquidity and fully financed for 2017 and Q1 2018 Keep working on the partnership with eas
Slide 26: Norwegian offers more than 500 routes to over 150 destinations
Norwegian offers more than 500 routes to over 150 destinations 26
Norwegian Air Shuttle — Q3 2017 Earnings Presentation on 6ix