Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q2 2018 Earnings Presentation
21 slides from Norwegian Air Shuttle Asa's earnings presentation, Jul 12, 2018
Slide 1: Norwegian Air Shuttle ASA Q2 2018 Presentation
Norwegian Air Shuttle ASA Q2 2018 Presentation 12 July 2018
Slide 2: Highlights Q2 2018
Highlights Q2 2018 Successfully completed subsequent offering of NOK 200 million Added two 737 MAXs and three 787-9s to operations EBITDA of NOK 538 million (59) Every operational aircraft was utilized on average 12.7 hours per day compared to 11.5 last year (block hours) Norwegian’s product recogni
Slide 3: Stable load in the quarter with highest absolute growth in the history of Norwegian
Stable load in the quarter with highest absolute growth in the history of Norwegian 48% growth in capacity (ASK) 46% growth in traffic (RPK) ASK Load Factor Load 30,000 - 0.9 p.p. 100% 87.8 % 87.7 % 86.8 % 85.2 % 90% 25,000 79.6 % 78.3 % 78.3 % 76.5 % 76.9 % 80% 75.4 % 70% 20,000 60% 15,000 50% 40%
Slide 4: Passengers (million)
10 million passengers in Q2 (+16%) + 16 % 10 9 8 7 6 5 4 3 Passengers (million) 2 1 0 Q2 09 Q2 10 Q2 11 Q2 12 Q2 13 Q2 14 Q2 15 Q2 16 Q2 17 Q2 18 PAX (m ill) 2.8 3.2 4.0 4.5 5.5 6.4 7.0 7.7 8.6 10.0 PAX 12 m os. rolling (m ill) 9.7 11.8 14.2 16.7 19.0 22.5 24.6 27.4 31.0 35.3 4
Slide 5: Continued growth at all key airports
Continued growth at all key airports 5 Source: 12 month rolling passengers as reported by Avinor , Swedavia, Copenhagen Airports, Finavia and Gatwick Airport
Slide 6: 58% of revenue generated outside the Nordics
58% of revenue generated outside the Nordics 13% revenue growth in the Nordics Most significant absolute growth in the US Growth in revenue by origin in Q2 18* (y/y): Revenue split by origin in Q2 18*: * 12 months rolling (estimated) 6
Slide 7: A network of more than 60 intercontinental routes
A network of more than 60 intercontinental routes 7
Slide 8: Adding 25 new aircraft to own operations in 2018
Adding 25 new aircraft to own operations in 2018 Deliveries 787-9 Deliveries 737-800 and 737 MAX Re-deliveries 737-800 2018: +3,724 seats +2,640 seats -744 seats 8
Slide 9: Financials
Financials 9
Slide 10: Profit and loss
Profit and loss NOK million Q2 2018 Q2 2017 Passenger revenue 8,294 6,268 Ancillary passenger revenue 1,613 1,173 Other revenue 321 334 Total operating revenue 10,228 7,775 Personnel expenses 1,656 1,262 Aviation fuel 3,206 1,744 Airport and ATC charges 1,173 982 Handling charges 1,278 844 Technical
Slide 11: Record high total revenue of NOK 10.2 billion
Record high total revenue of NOK 10.2 billion Total revenue increased by 32% y/y Q2 unit passenger revenue (RASK) -11% to 0.32 (-9% in constant currency) due to increased average flying distance of 20% and reverse Easter effect Ancillary revenue per passenger increased by 19% Cargo revenue increased
Slide 12: Operating cost EBIT level per ASK
Unit cost excl fuel decreased by 19% Unit cost excl fuel decreased by 19% (decreased by 17% in constant currency) Unit cost incl fuel decreased by 9% (decreased by 6% in constant currency) 0.65 0.60 CASK excl fuel and ownership cost 0.55 Ownership share of CASK Fuel share of CASK 0.50 Operating cost
Slide 13: Unit cost down despite spike in fuel price
Unit cost down despite spike in fuel price Higher fuel cost (+24% per ASK) driven by spot price (+46%), partly offset by a weaker USD vs NOK (-6%) and efficiency gains Lower personnel cost (-11% per ASK) due to reduced recruitment before growth moderates Higher handling cost (+2% per ASK) due to add
Slide 14: Balance sheet
Balance sheet NOK million Q2 2018 Q2 2017 Intangible assets 1,658 967 Prepayment on aircraft 8,226 6,705 Aircraft and aircraft parts 29,687 20,040 Other fixed assets 411 366 Tangible fixed assets 38,325 27,111 Fixed asset investments 978 1,592 Total non-current assets 40,961 29,669 Assets held for s
Slide 15: Cash flow
Cash flow NOK million Q2 2018 Q2 2017 Profit before tax 329 -909 Paid taxes 40 - Depreciation, amortization and impairment 384 921 Changes in air traffic settlement liabilities 378 484 Changes in receivables -199 -1,102 Other adjustments 315 2,002 Net cash flows from operating activities 1,247 1,397
Slide 16: Financing on track
Financing on track Capex commitment (all aircraft incl PDP) USD 1.75 billion for 2018 (previous estimate: USD 1.9 bn) USD 2.2 billion for 2019 (previous estimate: USD 2.6 bn) Fleet renewal – initiated process to sell older aircraft and reduce capex commitment PDP financing / liquidity Repayment of b
Slide 17: Outlook
Outlook 17
Slide 18: Outlook for 2018
Outlook for 2018 Markets and business Current booked volumes show that the load is marginally down and the yield is marginally up for the coming months An estimated production growth (ASK) of 40% (unchanged) Q3: + 34% Q4: +38% (previous estimate: 37% and 41% respectively) Fuel hedging 22% of H2 2018
Slide 19: Expect to reduce unit cost excl fuel by 12%
Expect to reduce unit cost excl fuel by 12% Unit cost estimates NOK 0.290-0.295 excl fuel and depreciation NOK 0.425-0.430 incl fuel and depreciation (previous estimate: 0.415-0.420) Assumptions: Fuel price of USD 681/mt (644), USD/NOK 7.88 (7.61), EUR/NOK 9.42 (9.50). Based on the current route por
Slide 20: Going forward
Going forward Fully committed to delivering on our long-term strategy Entering a more moderate growth phase Focus on cost reduction initiatives Expect to reach a conclusion on divestment of aircraft in Q3 2018 Growth will be skewed towards increased frequency on existing routes Preparing to start fl
Slide 21: Norwegian offers more than 500 routes to over 150 destinations
Norwegian offers more than 500 routes to over 150 destinations 21
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