Norwegian Air Shuttle Asa · OSL:NAS

Norwegian Air Shuttle Asa — Q4 2015 Earnings Presentation

23 slides from Norwegian Air Shuttle Asa's earnings presentation, Feb 11, 2016

  1. Slide 1: Norwegian Air Shuttle ASA Q4 2015 Presentation

    Norwegian Air Shuttle ASA Q4 2015 Presentation 11 February 2016

  2. Slide 2: Highlights

    Highlights Launched routes in Q4 to the Caribbean (Puerto Rico, St Croix, Martinique, Guadeloupe) and domestic Spain. New base in Italy in 2016 Added 10 new 737-800 aircraft and one 787-8 Dreamliner in 2015 Reached agreement with unions for pilots and cabin crew EBITDA ex other gains/losses improved

  3. Slide 3: 6.1 million passengers in Q4 2015 (+9 %)

    6.1 million passengers in Q4 2015 (+9 %) 7 + 9% 6 5 4 3 2 Passengers (million) 1 0 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Pax (mill) 1,3 2,0 2,2 2,8 3,3 4,0 4,4 5,2 5,6 6,1 3

  4. Slide 4: Market shares in key airports (last 12 months)

    Market shares in key airports (last 12 months) 4 Sources: Avinor, Swedavia, Copenhagen Airports, Finavia, Gatwick Airport, Aena

  5. Slide 5: Q4 load factor increased to 85 % (+4 p.p.)

    Q4 load factor increased to 85 % (+4 p.p.) 7 % growth in capacity (ASK) 12 % growth in traffic (RPK) Average flying distance increased by 4 % Load 18 000 ASK Load Factor +4 p.p. 100% 17 000 16 000 84,9 % 90% 80,7 % 15 000 77,6 % 78,5 % 77,9 % 76,2 % 76,1 % 77,4 % 76,7 % 80% 14 000 72,1 % 13 000 70%

  6. Slide 6: Q4 revenue increased by 16 %

    Q4 revenue increased by 16 % 19 % growth in international revenue, + 5 % for domestic Scandinavia 6 000 + 16 % 5 000 4 000 Domestic revenue 3 000 International revenue 2 000 Total Revenues NOK million 1 000 0 Q4 12 Q4 13 Q4 14 Q4 15 Revenues 3 106 3 786 4 602 5 319 Domes ti c revenue 1 097 1 116 1 2

  7. Slide 7: Q4 unit revenue up by 7 %, +1 % in local currency

    Q4 unit revenue up by 7 % +1 % in local currency Unit Revenue (RASK) improvement driven by higher load factor and currency Growing share of revenue in USD, GBP and Euro Less exposure to Norwegian krone Q4 2014 (NOK 3.8 bn) Q4 2015 (NOK 4.3 bn) USD USD 6% 3% EUR EUR 14 % 16 % NOK 40 % NOK 45 % SEK 21

  8. Slide 8: Q4: 17 % growth in ancillary revenue

    Q4: 17 % growth in ancillary revenue 15 % share of Group revenue Per passenger: 14 % growth for LH and 2 % for SH driven by bundle and freedom to choose 8

  9. Slide 9: Q4 EBITDA improved by NOK 603 million

    Q4 EBITDA improved by NOK 603 million (NOK million) Q4 14 Q4 15 Change Revenue 4 602 5 319 EBITDA -869 -266 603 EBIT -1 083 -633 Pre-tax profit (EBT) -1 184 -703 481 Net profit -978 -373 EBITDA development Q4 EBT development Q4 9

  10. Slide 10: Operating cost level per ASK (CASK)

    Unit cost cut by 2 % in Q4, -1% for the full year CASK -2 % to NOK 0.43 on lower fuel cost offset by currency 0,55 0.15 CASK excl fuel 0,50 0,13 0,15 Fuel share of CASK 0,45 0,09 0,11 0,40 0,15 Operating cost EBITDA level per ASK (CASK) 0,15 0,13 0,10 0,35 0,14 0,30 0,25 0,41 0,42 0,40 0,20 0,36 0,4

  11. Slide 11: 2% reduction in unit cost ex fuel adj. for currency

    2% reduction in unit cost ex fuel adj. for currency 8 % negative impact of currency Fuel share of opex reduced to 24 % 11

  12. Slide 12: FY 2015 EBITDA improved by NOK 2.1 bn

    FY 2015 EBITDA improved by NOK 2.1 bn (NOK million) 2014 2015 Change Revenue 19 534 22 491 EBITDA -662 1 481 2 143 EBIT -1 411 348 Pre-tax profit (EBT) -1 627 75 1 702 Net profit -1 070 246 EBITDA development (full-year) EBT development (full-year) 12

  13. Slide 13: EBITDA excl. unrealized hedging and one-offs

    EBITDA excl. unrealized hedging and one-offs NOK million 2014 2015 chg Revenue 19 540 22 491 2 951 EBITDA as reported -662 1 481 2 144 Unrealized fuel hedges marked to market -459 -800 -341 EBITDA excl unrealized hedges -203 2 281 2 485 Non-recurring items: - strik e -101 -110 - LH start-up IRR, wet

  14. Slide 14: NOK 2.1 bn higher CF from operations in 2015

    NOK 2.1 bn higher CF from operations in 2015 Invested NOK 5.2 bn in new aircraft EUR 125 million bond issue in Q4 NOK 2.5 billion in cash at the end of the year Q4 Q4 NOK million 2014 2015 2014 2015 Profit before tax -1 184 -703 -1 627 75 Paid taxes -203 0 -203 -44 Depreciation 212 367 748 1 133 Cha

  15. Slide 15: Balance sheet expanded by currency and new aircraft

    Balance-Sheet expanded by currency (NOK 4bn) and new aircraft (NOK 5bn) Added ten new 737-800 and one 787 on balance + PDP’s NOK 17 billion net debt and unchanged equity ratio of 9 % 33 000 30 000 27 000 Aircraft 24 000 Financing Aircraft 18 536 16 543 21 000 18 000 9 953 12 512 15 000 Aircraft PDP

  16. Slide 16: Aircraft financing on track

    Aircraft financing on track Expected capex (all aircraft incl. PDP) USD 1.1 bn for 2016 (unchanged) USD 2 bn for 2017 USD 2 bn for 2018 PDP financing PDP financing with backstop lease B 737 800 (in 1H 2016) PDP Financing for 50 A320 Neo’s in place Negotiating PDP financing for Boeing deliveries Long

  17. Slide 17: Fuel efficiency of the top 20 airlines on transatlantic routes

    Fuel efficiency of the top 20 airlines on transatlantic routes Excess fuel/ Pax-km/L fuel Pax-km 1. Norwegian 40 --- 2. Airberlin 35 +14% 3. Aer Lingus 34 +20% 4. Air France 33 +22% 5. Turkish 33 +22% 6. Aeroflot 33 +22% 7. Air Canada 33 +22% 8. KLM 33 +22% 9. Icelandair 32 +26% 10. Delta 32 +26% 11

  18. Slide 18: New routes to the US and the Caribbean

    New routes to the US and the Caribbean 18

  19. Slide 19: Top modern fleet with an average age below 4 yr

    Top modern fleet with an average age below 4 yr Extended lease agreements for three 737-800 (4 years) B788/B789 Owned 160 153 B788/B789 Leased 7 A320neo owned 140 14 B737 MAX 8 owned B738 owned 120 12 120 3 B738 S&LB 5 9 B738 leased 99 4 100 B733 owned 95 3 2 5 B733 leased 85 5 1 2 80 M80 leased 68

  20. Slide 20: Outlook for 2016

    Outlook for 2016 Markets and business Soft macro and passenger tax to be introduced in Norway, stronger competition in Denmark Stable in other key markets Positive momentum for long-haul Group bookings on par with last year, capacity adjusted The company expect a production growth (ASK) of 18 % Shor

  21. Slide 21: Million seat-kilometres (ASK)

    Norwegian Group 2020: Long-haul to be more than 1.5x today’s short-haul operation An average 20 % annual growth for the period (CAGR 10 % for SH, 40 % for LH) An estimated 130 billion ASK in 2020 2016-2020: 140 000 CAGR 20 % 120 000 100 000 Million seat-kilometres (ASK) 2005-2015: 80 000 CAGR 30% 60

  22. Slide 22: Summary

    Summary Launching new bases and routes, starting with Rome Pending DoT approval for NAI and NUK Positive impact from historic low fuel cost Aiming for further unit cost reductions 22

  23. Slide 23: Norwegian operates 439 routes to 132 destinations

    Norwegian operates 439 routes to 132 destinations From bases in SWEDEN DENMARK From bases in the FINLAND USA & THAILAND From bases in From the From bases in SPAIN UK base NORWAY 23

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