Norwegian Air Shuttle Asa · OSL:NAS

Norwegian Air Shuttle Asa — Q4 2016 Earnings Presentation

28 slides from Norwegian Air Shuttle Asa's earnings presentation, Feb 16, 2017

  1. Slide 1: Norwegian Air Shuttle ASA Q4 2016 Presentation

    Norwegian Air Shuttle ASA Q4 2016 Presentation 16 February 2017

  2. Slide 2: Highlights Q4 2016

    Highlights Q4 2016 Final approval for NAI by the US Department of Transportation (DOT) Reported EBITDA of NOK 673 million (-266) Q4 load factor up 1 p.p. to 86 % Added three new Boeing 737-800, one 787-9 Dreamliner and the first two Airbus 320neos Started 15 new routes in Q4 Norwegian.com voted best

  3. Slide 3: Highlights FY 2016

    Highlights FY 2016 Reported EBITDA of NOK 3.1 bn (1.5) Full-year load factor up 2 p.p. to 88 % Added 17 new 737-800, four 787-9 Dreamliners and two 320neos 34 new routes, including nine new intercontinental routes Launched new crew bases in Rome and Palma Start-up of routes between several US cities

  4. Slide 4: Passengers (million)

    7 million passengers in Q4 2016 (+17 %) 8 + 17 % 7 6 5 4 3 Passengers (million) 2 1 0 Q4 07 Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Pax (mill) 2.0 2.2 2.8 3.3 4.0 4.4 5.2 5.6 6.1 7.2 4

  5. Slide 5: Available Seat KM (ASK)

    Q4 load factor of 86 % (85 %) 27 % growth in capacity (ASK) 28 % growth in traffic (RPK) Average flying distance increased by 8 % Load ASK Load Factor 20,000 +0.9 p.p. 100% 19,000 18,000 84.9 % 85.8 % 90% 17,000 80.7 % 77.6 % 77.4 % 78.5 % 77.9 % 16,000 76.2 % 76.1 % 76.7 % 80% 15,000 14,000 70% 13,

  6. Slide 6: Market share up at all key airports

    Market share up at all key airports 12,000,000 + 1,096,000 pax 42 % mkt share 10,000,000 8,000,000 + 1,661,000 pax 5 % mkt share + 495,000 pax 21 % mkt share + 486,000 pax 6,000,000 17 % mkt share + 657,000 pax 11 % mkt share 4,000,000 + 185,000 pax 14 % mkt share 2,000,000 0 Oslo Arlanda Copenhagen

  7. Slide 7: More than 1 million new passengers in Spain

    More than 1 million new passengers in Spain Over 3.6 million passengers in Spain (+1.1 million) in FY 2016 Strongest passenger growth in Spain, US and UK 3 % passenger growth in Norway (adj. for the strike in 2015) Growth in number of passengers in 2016 (%): Split passengers by origin for 2016: 7

  8. Slide 8: 15 % revenue growth in Q4

    15 % revenue growth in Q4 Key revenue drivers: More customers, new ancillary products and Reward Q4 unit passenger revenue -13 % to 0.32 (-8 % in constant currency) An average 18 % revenue growth over the last five years 7,000 + 15 % 6,000 5,000 Other 4,000 Ancillary Passenger 3,000 Total revenue 2,

  9. Slide 9: 20 % growth in total ancillary revenue in Q4

    20 % growth in total ancillary revenue in Q4 Per passenger sales increased by 2 % to NOK 129 in Q4 Seasonal variation Full-year 2016 per passenger of NOK 134 (+5 %) Split by category: 9

  10. Slide 10: A total of 50 intercontinental routes in 2017

    A total of 50 intercontinental routes in 2017 Adding USA - Barcelona and Copenhagen - San Francisco in 2017 More new routes to be announced and adding frequency to existing routes 10

  11. Slide 11: Scaling up the Dreamliner fleet to 32 by 2018

    Scaling up the Dreamliner fleet to 32 by 2018 Widebody aircraft Deliveries 787-8 Deliveries 787-9 (delivered and firm orders) (291 seats) (344 seats) 2013 2014 2015 2016 2017 2018 Aircraft 3 7 8 12 21 32 Seats 873 2 037 2 328 3 704 6 800 10 584 11

  12. Slide 12: Key figures and estimated Dreamliner growth

    Key figures and estimated Dreamliner growth Key figures Dreamliners 2013 2014 2015 2016 ASK (million) 1,571 8,087 10,388 14,681 Load Factor 89 % 87 % 93 % 93 % Passengers 192,579 941,265 1,293,767 1,872,694 Legs 769 3,683 4,799 6,668 Forecast Dreamliners 2016 2017P 2018P ASK 14,681 14 681 23,500 23

  13. Slide 13: Adding 32 new aircraft in 2017

    Adding 32 new aircraft in 2017 Deliveries 787-9 Deliveries 737-800 and 737Max Re-deliveries 737-800 2017: +3096 seats +4,296 seats -744 seats 163 160 B788/B789 owned 12 144 B788/B789 leased 140 7 20 B737 MAX 8 owned 14 B738 owned 16 120 116 6 B738 S&LB 3 9 B738 leased 99 100 95 3 B733 owned 2 5 85 5

  14. Slide 14: Unit cost comparison based on the latest full-year results (in NOK)

    Unit cost comparison based on the latest full-year results (in NOK) Sources: Based on official full-year 2015 annual report for Norwegian Air Shuttle, Finnair, Vueling, SAS Group (31.10.2015), Easyjet (30.09.2015), and full-year 2015 report for Ryanair and WizzAir (31.03.2016). Eurowings figures are

  15. Slide 15: Financials

    Financials 15

  16. Slide 16: EBITDA improved to NOK 673 million in Q4

    EBITDA improved to NOK 673 million in Q4 (NOK million) Q4 16 Q4 15 Chg 2016 2015 Chg Revenue 6,102 5,319 783 26,055 22,491 3,564 EBITDAR 1,357 295 1,062 5,958 3,694 2,264 EBITDA 673 (266) 940 3,116 1,481 1,635 Pre-tax profit (EBT) 300 (703) 1,003 1,508 75 1,433 Net profit 197 (373) 571 1,135 246 889

  17. Slide 17: Clean EBITDA increased to NOK 3.2 bn

    Clean EBITDA* increased to NOK 3.2 bn NOK million Q4 16 Q4 15 Chg 2016 2015 Chg Revenue 6,102 5,319 783 26,055 22,491 3,563 EBITDA as reported 673 -266 940 3,116 1,481 1,635 Other losses/gains 852 -515 1,367 577 -474 1,051 EBITDA ex. other losses/gains -179 249 -427 2,540 1,955 584 Non-recurring ite

  18. Slide 18: Margin recovery following long haul build-up

    Margin recovery following long haul build-up 25% launched 20% Financial Long haul crisis 15% Fuel price drop 10% 5% 0% -5% -10% EBITDAR-margin (12 months rolling) EBIT-margin (12 months rolling) 18

  19. Slide 19: Operating cost EBITDA level per ASK (CASK)

    Q4 unit cost cut by 2 % to NOK 0.42 1 % lower unit cost in constant currency Unit cost ex. fuel decreased 1 % to NOK 0.32 (flat in constant currency) 0.55 0.21 CASK ex. fuel 0.50 0.15 Fuel share of CASK 0.45 0.15 0.11 0.40 0.15 Operating cost EBITDA level per ASK (CASK) 0.15 0.13 0.10 0.10 0.35 0.14

  20. Slide 20: Operating cost EBITDA level per ASK (CASK)

    Full-year unit cost cut by 3 % to NOK 0.41 6 % lower unit cost in constant currency Unit cost ex. fuel increased 2 % to NOK 0.32 (-1 % in constant currency) 0.55 CASK ex. fuel Fuel share of CASK 0.50 0.19 0.45 0.13 0.15 0.40 0.12 0.14 Operating cost EBITDA level per ASK (CASK) 0.14 0.11 0.09 0.35 0.

  21. Slide 21: Full impact of lower fuel cost

    Full impact of lower fuel cost 0.16 Sales/ Depr. distrib. 4% 2% Other flight ops. exp. 0.14 4% Fuel Gen. and 22 % adm. exp. 5% 0.12 Technical 9% 0.10 Personnel Fuel Leasing 16 % 0.08 10 % Personnel Handling Airport & ATC 0.06 12 % 12 % Airport/ATC Handling Leasing Other 0.04 Stable personnel cost at

  22. Slide 22: NOK 3 bn cash-flow from operations in 2016

    NOK 3 bn cash-flow from operations in 2016 Invested NOK 6.5 bn in new aircraft of which NOK 3.2 bn financed by own cash NOK 2.3 bn in cash at the end of Q4 (+NOK 0.7 bn in undrawn facility) NOK million Q4 16 Q4 15 Chg 2016 2015 Chg Profit before tax 300 -703 1,003 1,508 75 1,433 Paid taxes - - - -29

  23. Slide 23: Equity improved by NOK 1.1 bn

    Equity improved by NOK 1.1 bn Added 13 new 737-800 on balance the last 12 months + PDP’s NOK 21 bn net debt (from 17 bn in 2015) 11 % equity ratio (9 %). 16 % when adding market value of Bank Norwegian (NOFI) 40,000 35,000 Aircraft 30,000 financing Aircraft 17,580 22,572 25,000 14,890 18,482 20,000

  24. Slide 24: Balanced mix of funding

    Balanced mix of funding 30 aircraft financed in US capital Debt mix: markets, 37 by export credits 3.7 % average interest rate on long- term aircraft financing 95 % of AC financing on fixed rates Debt maturity profile: 10 000 9 000 Number of aircraft: 8 000 7 000 6 000 # aircraft B737 B787 A320 5 00

  25. Slide 25: Financing on track

    Financing on track Expected capex (all aircraft incl. PDP) USD 1.8 bn for 2017 (reduced from USD 2.1 bn) USD 2.1 bn for 2018 (increased from USD 2.0 bn) PDP financing / liquidity PDP financing for 50 320neos in place New unsecured bond in January (SEK 800 million) New credit facility (NOK 1 bn) Long

  26. Slide 26: Outlook for 2017

    Outlook for 2017 Markets and business Negative impact from passenger tax in Norway Weaker demand in the UK post Brexit Booking volumes on par with last year, capacity adjusted An estimated production growth (ASK) of 30 % (unchanged) 737-800 / 737 MAX +20 %, 787 Dreamliners +60 % Increasing distance

  27. Slide 27: Summary

    Summary Strongest full-year result in the history of Norwegian Building load factor Continued passenger growth Preparing for global expansion Launch of new intercontinental routes with the 737 MAX in 2017 Financing on track 27

  28. Slide 28: Norwegian operates 471 routes to 130 destinations

    Norwegian operates 471 routes to 130 destinations From bases in SWEDEN DENMARK Intercontinental FINLAND From bases in From the From bases in SPAIN UK base NORWAY 28

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