Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q4 2014 Earnings Presentation
24 slides from Norwegian Air Shuttle Asa's earnings presentation, 2015
Slide 1: Norwegian Air Shuttle ASA Q4 2014 Presentation
Norwegian Air Shuttle ASA Q4 2014 Presentation Europe’s best low-cost airline 2013 & 2014
Slide 2: Q4 2014 Highlights
Europe’s best low-cost airline 2013 & 2014 Q4 2014 Highlights • 22% revenue growth y.o.y – Driven by long-haul expansion – Received three new 737-800’s in Q4 replacing older aircraft – 45% growth in ancillary revenue • Unit cost (CASK) increased by 3% y.o.y to NOK 0.43 – Underlying CASK reduced by 7
Slide 3: Q4 revenue growth driven by International expansion
Europe’s best low-cost airline Q4 revenue growth driven by International expansion 2013 & 2014 • 22% revenue growth y.o.y 5 000 + 22 % 4 500 4 000 3 500 3 000 Domestic Revenue (MNOK) 2 500 International Revenue (MNOK) 2 000 Total Revenues (MNOK) 1 500 1 000 MNOK 500 0 Q4 11 Q4 12 Q4 13 Q4 14 Revenue
Slide 4: 45% growth in ancillary revenue driven by bundling and LH
Europe’s best low-cost airline 45% growth in ancillary revenue driven by bundling and LH 2013 & 2014 • 14 % share of Group revenues in Q4 2014 • NOK 119 per passenger (+34% y.o.y) 4
Slide 5: Q4 hit by MNOK 705 costs related to currency and MTM hedges
Europe’s best low-cost airline Q4 hit by MNOK 705 costs related to currency and MTM hedges 2013 & 2014 Q4 14 Q4 13 EBITDAR MNOK -380 299 EBITDA MNOK -870 -41 EBIT MNOK -1 082 -183 Pre-tax profit (EBT) MNOK -1 184 -283 Net profit MNOK -958 -197 EBITDAR development Q4 EBT development Q4 5
Slide 6: Q4 underlying EBT was MNOK 55m lower than last year
Europe’s best low-cost airline Q4 underlying EBT was MNOK 55m lower than last year 2013 & 2014 • Limited impact of lower fuel price in Q4 • Currency related to assets (AAAL) booked direct to equity 6
Slide 7: Equity - limited net impact from currency in Q4 2014
Europe’s best low-cost airline Equity - limited net impact from currency in Q4 2014 2013 & 2014 Booked direct to equity: - Net positive impact on equity AAAL (BV) MNOK 361 Booked through the P&L: - Reduced EBITDA rel. to currency MNOK 276 * - Loss on hedging (incl in EBITDA) MNOK 136 - Disagio (othe
Slide 8: MNOK 580 change in cash in Q4 from external PDP funding
Europe’s best low-cost airline MNOK 580 change in cash in Q4 from external PDP funding 2013 & 2014 • Full-year 2014: MNOK 346 in positive cash-flow from operations • External PDP funding of NOK 2.8 bn • NOK 2 billion available cash at year-end 8
Slide 9: Long-term financing through 2015/2016 on track
Europe’s best low-cost airline Long-term financing through 2015/2016 on track 2013 & 2014 • Year-end 2014 closing PDP facility: MUSD 366 (NOK 2.8 bn) – Covers all PDP payments for 2015 and first half of 2016 deliveries, with backstop lease for 14 aircraft • Committed external financing 2015: MUSD 50
Slide 10: Capex in 2014 - new on-balance sheet aircraft
Europe’s best low-cost airline NOK 5 bn capex in 2014 - 12 new on-balance sheet aircraft 2013 & 2014 ● Total balance of NOK 22,6 billion ● Net interest bearing debt NOK 11,3 billion ● Equity of NOK 2,1 billion at the end of Q4 14 ● Group equity ratio of 9% (19%) 24 000 21 000 18 000 Long term liabil
Slide 11: Strong Q4 load in spite of 21% capacity increase
Europe’s best low-cost airline Strong Q4 load in spite of 21% capacity increase 2013 & 2014 • Load factor increased to 80.7% (+ 2.8 p.p.) • 26% traffic growth (RPK) • Average flying distance up 12% • Short-haul load up 2.7 p.p. + 21 % 100% 12 000 ASK Load Factor 11 000 80,7 % 10 000 77,6 % 77,4 % 78
Slide 12: Passengers (million)
Europe’s best low-cost airline 24 million passengers in 2014 2013 & 2014 • 5% of pax from long-haul in 2014 • 130 million passengers since the start 6,00 + 8% 5,00 4,00 3,00 2,00 Passengers (million) 1,00 0,00 Q4 05 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Pax (mill) 0,9 1,3 2,0 2,2 2,8
Slide 13: Reduced capacity in Norway to expand in new markets
Europe’s best low-cost airline Reduced capacity in Norway to expand in new markets 2013 & 2014 13
Slide 14: Unit cost cut by 1% in 2014
Europe’s best low-cost airline Unit cost cut by 1% in 2014 2013 & 2014 0,60 CASK excl fuel Fuel share of CASK 0,55 0,50 Operating cost EBITDA level per ASK (CASK) 0,11 0,13 0.15 0,19 0,45 0,10 0,40 0,12 0,14 0,14 0,14 0,14 0,35 0,41 0,40 0,44 0,38 0,37 0,30 0,34 0,32 0,31 0,29 0,29 0,25 2005 2006 20
Slide 15: Stable gap vs local competition
Europe’s best low-cost airline Stable gap vs local competition 2013 & 2014 Sources: Norwegian Q4 2014 report (period displayed January - December 2014), SAS Interim Reports (including latest August 2014 – December 2014). Figures as reported in respective quarters and not restated - Scandinavian Airl
Slide 16: 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 17: 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 • Lower overhead per
Slide 18: Average age cut to 4.2 years - further reduction to 3.8 in 2015
Europe’s best low-cost airline Average age cut to 4.2 years - further reduction to 3.8 in 2015 2013 & 2014 18
Slide 19: Limited impact of lower fuel cost in 2014
Europe’s best low-cost airline Limited impact of lower fuel cost in 2014 2013 & 2014 • Jet fuel price down by 42% in USD (-29% in NOK) • Hedged 30% of expected fuel consumption for 2015 Source: Nordea Markets 19
Slide 20: Full effect of lower fuel price from Q1 2015
Europe’s best low-cost airline Full effect of lower fuel price from Q1 2015 2013 & 2014 • NOK 2 billion lower fuel cost vs 2014 (incl. currency) • In addition: NOK 0.5 billion loss (MTM) booked in 2014 related to 2015 – Differ from hedge accounting which have a gradual impact Assumptions: Compared w
Slide 21: Expectations for 2015 (Group)
Europe’s best low-cost airline Expectations for 2015 (Group) 2013 & 2014 • Business environment – Bookings for 2015 are ahead of last year (capacity adjusted) – Stable market in the Nordic region – Tough competition in continental Europe related to new capacity on short-haul – Positive momentum for
Slide 22: Summary
Europe’s best low-cost airline 2013 & 2014 Summary • Bookings for 2015 ahead of last year (capacity adjusted) • An estimated NOK 2 billion lower fuel cost for 2015 • Start-up of long haul on-track, improving regularity for 787 • Fully financed for 2015 with backstop lease arrangement • Aiming for fu
Slide 23: Norwegian offers 425 scheduled routes to 130 destinations in 39 countries
From bases in NORWAY SWEDEN From bases in DENMARK 23 Norwegian offers 425 FINLAND scheduled routes to 130 destinations in 39 countries From bases in the USA & THAILAND From bases in SPAIN From the UK base 23
Slide 24: Thank you!
Thank you! 24
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