Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q1 2018 Earnings Presentation
24 slides from Norwegian Air Shuttle Asa's earnings presentation, Apr 26, 2018
Slide 1: Norwegian Air Shuttle ASA Q1 2018 Presentation
Norwegian Air Shuttle ASA Q1 2018 Presentation 26 April 2018
Slide 2: Highlights Q1 2018
Highlights Q1 2018 Successfully completed private placement of NOK 1.3 billion Added two 737-800s and six 787-9s to operations Launched interline agreement with Widerøe Norwegian Air Argentina received an operating license EBITDA excl other losses/gains negative by NOK 1,850 million (-1,233) 2
Slide 3: Stable load despite high ASK growth
Stable load despite high ASK growth 36% growth in capacity (ASK) 37% growth in traffic (RPK) ASK Load Factor Load 24,000 100% + 0.1 p.p. 23,000 22,000 90% 85.2 % 84.4 % 84.5 % 21,000 83.0 % 20,000 77.3 % 77.2 % 76.1 % 19,000 74.8 % 75.1 % 74.3 % 80% 18,000 17,000 70% 16,000 15,000 60% 14,000 13,000
Slide 4: 7.5 million passengers in Q1 (+12%)
7.5 million passengers in Q1 (+12%) + 15 % 9 8 + 12 % 8 7 7 6 6 5 5 4 4 3 3 Passengers (million) Passengers (million) 2 2 1 1 0 0 Q1 09 Q1 09 Q1 10 Q1 10 Q1 11 Q1 11 Q1 Q1 12 12 Q1Q1 13 13 Q1Q1 1414 Q1Q1 1515 Q1Q11616 Q1 Q117 17 Q1 Q118 18 Pax (mill) 2.1 2.7 3.1 3.6 3.9 4.9 4.9 5.8 6.7 7.5 Pax 12 mt
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, Gatwick Airport and Aena
Slide 6: 56% of revenue generated outside the Nordics
56% of revenue generated outside the Nordics 14% revenue growth in the Nordics Most significant absolute growth in the US Growth in revenue by origin in Q1 18* (y/y): Split revenue by origin in Q1 18*: * 12 months rolling 6
Slide 7: Norwegian's passengers contribute to creating 40,000 new jobs
Norwegian’s passengers contribute to creating 40,000 new jobs A new report by Menon Economics shows the positive effects of international passengers flying to Scandinavia with Norwegian: 40,000 new jobs have been created in Scandinavia Passengers flying to Sweden, Norway and Denmark with Norwegian i
Slide 8: A network of more than 60 intercontinental routes
A network of more than 60 intercontinental routes 8
Slide 9: 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 9
Slide 10: Financials
Financials 10
Slide 11: Profit and loss
Profit and loss Q1 2018 Q1 2017 Passenger revenue 5,511 4,074 Ancillary revenue 1,211 919 Other revenue 271 263 Total operating revenue 6,993 5,256 Personnel expenses (1,550) (1,166) Fuel expenses (2,255) (1,526) Handling expenses (994) (722) Airport/ATC expenses (907) (733) Technical expenses (860)
Slide 12: Underlying RASK unchanged
Underlying RASK unchanged Q1 unit passenger revenue (RASK) -1% to 0.28 (unchanged currency adj.) Average flying distance increased by 17% Ancillary revenue per passenger increased by 17% Cargo revenue increased by 97% to NOK 162 million 8,000 + 33 % 7,000 6,000 5,000 4,000 3,000 2,000 NOK million 1,
Slide 13: Operating cost EBIT level per ASK
Unit cost excl fuel decreased by 5% Unit cost excl fuel decreased by 5% (decreased by 3% in constant currency) Unit cost incl fuel decreased by 2% (increased by 2% in constant currency) 0.70 0.65 CASK excl fuel and ownership cost 0.60 Ownership share of CASK 0.55 Fuel share of CASK 0.11 0.50 Operati
Slide 14: Unit cost down despite spike in fuel price
Unit cost down despite spike in fuel price Higher fuel cost (+8% per ASK) driven by spot price (+26%), partly offset by a weaker USD vs NOK (-7%) Lower personnel cost (-3% per ASK) due to abating growth and recruitment Higher leasing cost (+1% per ASK) due to a higher share of leased aircraft Higher
Slide 15: Balance sheet
Balance sheet Q1 2018 Q1 2017 Intangible assets 1,689 749 Prepayment on aircraft 6,213 7,128 Aircraft and aircraft parts 26,244 22,452 Other fixed assets 376 372 Tangible fixed assets 32,833 29,953 Fixed asset investments 922 1,606 Non-current assets 35,444 32,308 Inventory 114 88 Trade and other re
Slide 16: Cash flow
Cash flow Q1 2018 Q1 2017 Profit before tax (515) (1,848) Paid taxes (53) 40 Depreciation, amortization and impairment 336 364 Fair value adjustment of financial assets (1,940) - Changes in air traffic settlement liabilities 4,492 3,888 Changes in accounts receivable (3,240) (570) Other adjustments
Slide 17: Equity raise to get through the last phase of extensive growth
Equity raise to get through the last phase of extensive growth Raised NOK 1.3 billion in a private placement in March-April The price was set at NOK 155 per share through a bookbuilding Tranche 1 of the private placement registered in March and tranche 2 registered in April Subsequent offering to ex
Slide 18: Financing on track
Financing on track Capex commitment (all aircraft incl PDP) USD 1.9 billion for 2018 USD 2.6 billion for 2019 Fleet renewal – initiated process to sell older aircraft and reduce capex commitment PDP financing / liquidity PDP financing for six 787s Tap of unsecured bond in January (EUR 65 million) Un
Slide 19: Outlook
Outlook 19
Slide 20: Overall bookings ahead of last year
Overall bookings ahead of last year 20 Booked and paid travels as of 23 April 2018 and 24 April 2017 (corresponding weekday)
Slide 21: Outlook for 2018
Outlook for 2018 Markets and business Capacity adjusted booking volumes ahead of last year Favorable trading environment in European short haul market An estimated production growth (ASK) of 40% (unchanged) Q2: +48%, Q3: + 37% Q4: +41% Fuel hedging 27% of 2018 at USD 500 37% of H1 2018 at USD 499 19
Slide 22: Expect to reduce unit cost excl fuel by 12%
Expect to reduce unit cost excl fuel by 12% Unit cost estimates (unchanged since market update 20 March) NOK 0.290-0.295 excl fuel and depreciation NOK 0.390-0.395 excl depreciation NOK 0.415-0.420 incl depreciation Assumptions: Fuel price of USD 644/mt, USD/NOK 7.61, EUR/NOK 9.50. Based on the curr
Slide 23: Going forward
Going forward Subsequent offering to existing shareholders of NOK 200 million in May-June 2018 Focus on cost initiatives Reviewing strategic opportunities for Norwegian Reward In process of divesting up to 140 aircraft Replacement of older aircraft Sell or spin-off excess aircraft into leasing struc
Slide 24: Norwegian offers more than 500 routes to over 150 destinations
Norwegian offers more than 500 routes to over 150 destinations 24
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