Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q2 2004 Earnings Presentation
20 slides from Norwegian Air Shuttle Asa's earnings presentation, Aug 26, 2004
Slide 1: A stronger competitive position
Norwegian Air Shuttle ASA (NAS) A stronger competitive position Q2 2004 Oslo – London 25 - 26 August 2004
Slide 2: A stronger competitive position
A stronger competitive position ● Q2 results in line with expectations ● Strong financial position maintained ● Low-cost model confirmed ● Low-fare position strengthened ● Positive EBITDA outlook for H2 2
Slide 3: A stronger competitive position
A stronger competitive position ● Q2 results in line with expectations ● Strong financial position maintained ● Low-cost model confirmed ● Low-fare position strengthened ● Positive EBITDA outlook for H2 3
Slide 4: Turnover up 45% from Q2 2003
Turnover up 45% from Q2 2003 ● 311 Mill NOK in turnover in Q2 2004, compared to 215 (196 from low-fare) in Q2 2003 ● Growth driven by increased production and higher passenger volumes ● Rapid expansion accomplished with continuously higher load-factor (61% in Q2 03 to 67% in Q2 04) Mill 350 45 % 300
Slide 5: Aggressive pricing impacted result
Aggressive pricing impacted result ● EBITDA result of -36 MNOK in Q2 2004, versus -8.7 MNOK in Q2 2003 (low-fare) ● EBITDA result mainly impacted by aggressive competitive pricing ● EBITDA result not satisfactory, but in line with management expectations Mill EBITDA level B-737 35 25 15 5 -5 -15 -25
Slide 6: A stronger competitive position
A stronger competitive position ● Q2 results in line with expectations ● Strong financial position maintained ● Low-cost model confirmed ● Low-fare position strengthened ● Positive EBITDA outlook for H2 6
Slide 7: Stable cash balance
Stable cash balance ● Cash-balance marginally down from Q1 2004 to 320.5 MNOK as of July 1. 2004 ● Positive cash flow from operations of 0.7 MNOK ● Good sales in Q2 Cash Flow statement Second Quarter 2003 2004 2003 Operating activities 738 -1 870 61 498 Investments -8 243 -7 481 -28 637 Financial ac
Slide 8: Strong financial position
Strong financial position ● Total assets of 556 MNOK ● IPO proceeds of 235 MNOK ”still in the bank” ● Equity-share of 36% Second Quarter FIXED ASSETS 2004 2003 EQUITY 2004 2003 Intangible assets 91 336 37 478 Tangible fixed assets 28 688 62 764 Paid-in equity 267 214 71 157 Financial fixed assets 13
Slide 9: A stronger competitive position
A stronger competitive position ● Q2 results in line with expectations ● Strong financial position maintained ● Low-cost model confirmed ● Low-fare position strengthened ● Positive EBITDA outlook for H2 9
Slide 10: Costs are down as planned
Costs are down as planned ● Average unit costs of 0.54 NOK in Q2 2004, down more than 30 % from Q2 2003 (0.78 NOK) ● Scale benefits from increased production and longer sector lengths, have been main drivers ● Cost effective distribution solutions, renegotiated supplier agreements and internal effic
Slide 11: Scale benefits realized
Scale benefits realized ● Annualized ABH per pilot was 573 in Q2 2004, up 19% from Q1 ● ABH per plane per day was 6,8 in Q2 Hrs 2004, up 20% from Q1 Hrs pilots plane 1000 10 900 9 800 8 700 7 600 6 500 5 400 4 300 3 200 2 100 1 0 A A (F) (F) (F) 0 Q1 04 Q2 04 Q3 04 Q4 04 Pilot utilization (ABH pr pl
Slide 12: More effective distribution
More effective distribution ● Distribution costs per sold seat is down with 25 % since Q2 2003 ● Higher internet penetration, currently 60% of sold volume, is a major driver ● New internet portals for business clients and travel agents combined with new distribution channels (SMS and Narvesen), shou
Slide 13: A stronger competitive position
A stronger competitive position ● Q2 results in line with expectations ● Strong financial position maintained ● Low-cost model confirmed ● Low-fare position strengthened ● Positive EBITDA outlook for H2 13
Slide 14: A demonstration of strength
A demonstration of strength ● Increased fleet from 8 to 11 planes and started 18 new routes in Q2 2004 ● Production increased to 642 Mill km in Q204, an increase of 147% from Q203 (261 Mill km) ● Load factor increased to 67% in Q204, an increase of 6 %- points from Q203 (61%) ● Load factor in July w
Slide 15: Stronger domestic position
Stronger domestic position ● Market share of 25 % and increasing on key domestic routes ● Market share maintained and somewhat increased from Q1 to Q2, in a period with aggressive competitive pricing ● Large business clients are showing renewed interest in our services. Recently closed deal with Tel
Slide 16: A stronger competitive position
A stronger competitive position ● Q2 results in line with expectations ● Strong financial position maintained ● Low-cost model confirmed ● Low-fare position strengthened ● Positive EBITDA outlook for H2 16
Slide 17: Yield hit by aggressive pricing
Yield hit by aggressive pricing ● An increase of 33% in average sector length from Q1 2004 to Q2 2004, impacted yield levels negatively in Q2 ● Aggressive price competition had a strong adverse affect on yield levels in Q2 ● The intensity of price rivalry has recently eased off, providing room for a
Slide 18: The overall market is growing
The overall market is growing Total PAX volume OSL 2003/2004 1 500 000 1 300 000 1 100 000 900 000 700 000 500 000 300 000 ch ry ay ne ly y ril st r r er r ar ua be be Ju be ar Ap M gu Ju ob ru M br em em em Au ct Ja Fe O pt ov ec Se N D International Domestic 2004 18
Slide 19: Positive EBITDA outlook for H2
Positive EBITDA outlook for H2 ● Higher passenger volumes and continued yield pressure expected for Q3 and Q4 ● A materialized ”softening” of domestic price rivalry, may affect yield levels positively in the latter part of H2 ● Positive EBITDA outlook for H2 ● An overall negative result for 2004 is
Slide 20: Summary
Summary: ● Q2 results in line with expectations ● Strong financial position maintained ● Low-cost model confirmed ● Low-fare position strengthened ● Positive EBITDA outlook for H2
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