Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q3 2014 Earnings Presentation
20 slides from Norwegian Air Shuttle Asa's earnings presentation, August 2014
Slide 1: Norwegian Air Shuttle ASA Q3 2014 Presentation
Norwegian Air Shuttle ASA Q3 2014 Presentation Photo: Bjørn Morgan / August 2014 Europe’s best low-cost airline 2013 & 2014
Slide 2: Double digit revenue growth in Q3 driven by International
Europe’s best low-cost airline Double digit revenue growth in Q3 driven by International 2013 & 2014 • Group revenues of MNOK 6,337 in Q3 2014 + 30 % 6 000 5 000 4 000 Domestic Revenue (MNOK) International Revenue (MNOK) 3 000 Total Revenues (MNOK) 2 000 MNOK 1 000 0 Q3 11 Q3 12 Q3 13 Q3 14 Revenues
Slide 3: Q3 affected by capacity investment and delayed US approval
Europe’s best low-cost airline Q3 affected by capacity investment and delayed US approval 2013 & 2014 Q3 14 Q3 13 EBITDAR MNOK 1 217 1 169 EBITDA MNOK 726 778 EBIT MNOK 532 638 Pre-tax profit (EBT) MNOK 505 604 Net profit MNOK 374 436 EBITDAR development Q3 EBT development Q3 3
Slide 4: Underlying EBT improved by 13%
Europe’s best low-cost airline Underlying EBT improved by 13% 2013 & 2014 • High IRR cost related to Long-Haul • Delayed US approval process causes suboptimal scheduling • Negative impact of currency
Slide 5: Ancillary revenue growth driven by bundling and LH
Europe’s best low-cost airline Ancillary revenue growth driven by bundling and LH 2013 & 2014 • Ancillary revenue comprises 13% of Group revenues in Q3 • NOK 124 per scheduled passenger (an increase of 37% from last year) 5
Slide 6: Aircraft investments financed by operating cash-flow
Europe’s best low-cost airline Aircraft investments financed by operating cash-flow 2013 & 2014 • Strong presales through the quarter – Seasonal effect - delivering on presold summer tickets • Q3 2014 air traffic settlements driven by ramp-up of long-haul • BNOK 2bn of internal funds used to fund ai
Slide 7: New on-balance sheet aircraft in 2014
Europe’s best low-cost airline 12 new on-balance sheet aircraft in 2014 2013 & 2014 ● Total balance of NOK 19 billion ● Net interest bearing debt NOK 7,6 billion ● Equity of NOK 2,8 billion at the end of Q3 14 ● Group equity ratio of 15% (20%) 20 000 18 000 16 000 Long term liabilities 14 000 9 054
Slide 8: Strong Q3 load in spite of 36% capacity increase
Europe’s best low-cost airline Strong Q3 load in spite of 36% capacity increase 2013 & 2014 • 41% traffic growth • Average flying distance up 14% • Load factor increased to 84.6% (+ 3.2 p.p.) • Short-haul load up 2.7 p.p. + 41 % 100,0 % 12 000 ASK Load Factor 11 000 86,4 % 86,1 % 84,7 % 84,4 % 84,6
Slide 9: 7.1 million passengers in Q3
Europe’s best low-cost airline 7.1 million passengers in Q3 2013 & 2014 • An increase of more than 1,000,000 passengers +17 % 6,00 5,00 4,00 3,00 2,00 Passengers (million) 1,00 0,00 Q3 05 Q3 06 Q3 07 Q3 08 Q3 09 Q3 10 Q3 11 Q3 12 Q3 13 Q3 14 Pax (mill) 0,9 1,5 2,0 2,6 3,1 3,8 4,6 5,2 6,0 7,1 9
Slide 10: Growing market share in all markets
Strong demand: Europe’s best low-cost airline 2013 & 2014 Growing market share in all markets • Business model works – lower costs and prices attract volume 10
Slide 11: Lowest cost always wins
Europe’s best low-cost airline Lowest cost always wins 2013 & 2014 Sources: Norwegian Q3 2014 report (period displayed October 2013 – September 2014), SAS Interim Reports (including latest May 2014 – July 2014). Figures as reported in respective quarters and not restated - Scandinavian Airlines (SK)
Slide 12: Stable gap vs local competition
Europe’s best low-cost airline Stable gap vs local competition 2013 & 2014 Sources: Norwegian Q3 2014 report (period displayed October 2013 – September 2014), SAS Interim Reports (including latest May 2014 – July 2014). Figures as reported in respective quarters and not restated - Scandinavian Airli
Slide 13: Operating cost EBITDA level per ASK (CASK)
Europe’s best low-cost airline Unit cost at constant currency and excl. one-off down 5% 2013 & 2014 • Unit cost ex fuel down 4% - hampered by weak NOK & Long-Haul wet lease • Unit cost including fuel down 1% 0,45 -1% Fuel share of CASK 0,40 CASK excl fuel Operating cost EBITDA level per ASK (CASK) 0
Slide 14: Aiming for FY CASK NOK 0.25 excluding fuel
Europe’s best low-cost airline Aiming for FY CASK NOK 0.25 excluding fuel 2013 & 2014 Scale economies New more efficient aircraft Growth adapted to int’l markets • Uniform fleet of Boeing 737-800s • Flying cost of 737-800 lower than 737-300 • Cost level adapted to local markets • Overheads • 737-800
Slide 15: Unit cost under control – further upside
Europe’s best low-cost airline Unit cost under control – further upside 2013 & 2014 – Phase-out 737-300 (Fuel, Tech, Handling, Airport/ATC & Personnel) – Phase-in Max / Neo / Dreamliner (Fuel & Tech) – Larger scale (Overhead, Sales & distrib., Personnel) – Further automation (Overhead, Personnel, Ha
Slide 16: Aircraft number 100 delivered
Europe’s best low-cost airline Aircraft number 100 delivered 2013 & 2014 16
Slide 17: Low fuel hedgings - exposed to lower fuel price
Europe’s best low-cost airline Low fuel hedgings - exposed to lower fuel price 2013 & 2014 • Opportunistic fuel hedging • Hedging for the following quarters – 30% for Q4 2014 on an average USD 930 per MT – 25% for Q1 2015 and 12.5% for Q2 2015 on an average USD 920 per MT • Hedged 23% of expected fu
Slide 18: Expectations for 2014 (Group)
Europe’s best low-cost airline Expectations for 2014 (Group) 2013 & 2014 • Business environment – Economic uncertainty in parts of Europe – Seasonal fluctuations – Yield pressure from capacity investment – Competitive pressure in the Nordic region • Production – The company expects a production grow
Slide 19: Expectations for 2015 (Group)
Europe’s best low-cost airline Expectations for 2015 (Group) 2013 & 2014 • The company expects a production growth (ASK) of 5 % – Short-haul 2% – Long-haul 25% – Utilization and distance increase driven by UK and Spanish bases and long-haul – Continuous optimization of the route portfolio • Unit cos
Slide 20: Norwegian offers 417 scheduled routes to 126 destinations
From bases in NORWAY SWEDEN From bases in DENMARK Norwegian offers 417 FINLAND scheduled routes to 126 destinations in 39 countries From bases in the USA & THAILAND From bases in SPAIN From the UK base
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