Norwegian Air Shuttle Asa · OSL:NAS

Norwegian Air Shuttle Asa — Q2 2007 Earnings Presentation

16 slides from Norwegian Air Shuttle Asa's earnings presentation, Jul 19, 2007

  1. Slide 1: Norwegian (NAS) Q2 2007

    Norwegian (NAS) Q2 2007 Bjørn Kjos (CEO) Oslo, 19. July 2007

  2. Slide 2: Strong revenue growth continues in Q2 07

    Strong revenue growth continues in Q2 07 ● 1,019 MNOK in total revenue, 33 % growth since last year MNOK revenue 1 000 800 600 400 200 0 Q2 04 Q2 05 Q2 06 Q2 07 Q2 04 Q2 05 Q2 06 Q2 07 Revenue 311 531 765 1 019 Domestic revenue 204 280 381 459 International revenue 107 251 384 560 Domestic revenue g

  3. Slide 3: Q2 07 margin improves on growing international traffic and ancillary revenue

    Q2 07 margin improves on growing international traffic and ancillary revenue ● Earnings (EBITDA) of 85 MNOK in Q2 07 ● Earning 44.7 MNOK after tax ● Margin (EBITDA) of 8 % (5 % in Q2 06) EBITDA MNOK 90 85 70 50 30 36 31 10 -10 -36 -30 -50 Q2 04 Q2 05 Q2 06 Q2 07 -70 Q2 04 Q2 05 Q2 06 Q2 07 EBITDA MN

  4. Slide 4: Strong results in the first half year

    Strong results in the first half year ● Earnings (EBITDA) of 76 MNOK in the first half of 07 ● Margin (EBITDA) of 4 % ( -1 % in the first half of 06) EBITDA YTD 90 70 50 76 30 10 -10 -13 -15 -30 -50 -86 -70 -90 H104 H105 H106 H107 YTD 04 YTD 05 YTD 06 YTD 07 Revenue 547 851 1304 1757 EBITDA MNOK -86

  5. Slide 5: Polish operations on track and close to breaking even in Q2 07

    Polish operations on track and close to breaking even in Q2 07 ● Polish operations EBITDA - 3 MNOK ● 33 million improvement since Q1 2007 EBITDA MNOK 20 10 0 0 -10 -3 -20 -30 -36 -40 -52 -50 -60 Q4 06 Q1 07 Q2 07 5

  6. Slide 6: Positive cash flow from operations 257 MNOK

    Positive cash flow from operations 257 MNOK ● Net change 520 MNOK in Q2 – mainly driven by strong sales – financial activities linked to bond issue ● Available cash 1 048 MNOK CASH FLOW (TNOK) Second quarter Form: 2007 2006 Operation activites 257 222 141 493 Investments -43 939 -128 525 Financial a

  7. Slide 7: Production growth of 33 % absorbed by 34 % traffic growth

    Production growth of 33 % absorbed by 34 % traffic growth ● 33 % production growth since last year, international growth of 44 % ● Stable load factor at 79 %, international load factor is leveling out at 80 % M ASK 78 % 79 % 79 % 2000 1500 67 % 1000 500 0 Q2 04 Q2 05 Q2 06 Q2 07 ASK Cabin Factor Q2

  8. Slide 8: 1.6 million passengers carried through 103 routes and 65 destinations

    1.6 million passenger carried through Norwegian’s 103 routes and 65 destinations last three months ● Domestic passenger traffic steadily growing at approx 10 % ● International passenger growth approx 40 % Passengers 2000 1500 52 % International passengers 1000 500 48 % Domestic passengers 0 Q2 04 Q2

  9. Slide 9: Domestic market share approaching 45 % on key routes

    Domestic market share approaching 45 % on key routes as low fares stimulates and increase the total market ● Price and product enhancements stimulates business and leisure travel and increase the total market ● Increased production on Bergen and Trondheim attracts business travelers % Market Share 4

  10. Slide 10: Cost development

    Cost development ● Unit cost of 0.53 in Q2 2007, down 4 % since last year – Last year’s cost initiatives implemented – Longer sector lengths from international expansion – Added cost from wet lease of two aircraft CASK NOK 0,55 2007 target 0,5 0,54 0,55 0,53 0,53 0,45 0,4 Q2 04 Q2 05 Q2 06 Q2 07 10

  11. Slide 11: Ancillary revenue grows as new products are introduced – still upside potential

    Ancillary revenue grows as new products are introduced to the market – still upside potential ● Q2 07 ancillary revenue 26 NOK per passenger (170 % growth) ● Driven by new and improved products maturing; – seating, baggage/carry on, commission from hotel and rental car bookings ● Major LCC’s ancilla

  12. Slide 12: Building the brand

    Building the brand ● Norwegian recognized among the strongest brands in Norway ● Well-known brand is not the same as popular ~ a positive reputation and a well-known brand name builds a strong brand 80 Skandiabanken IKEA Good reputation and Norwegian Coop TV 2 well-known brand 75 Hydro Statoil Rema1

  13. Slide 13: Norwegian to acquire 100 % of FlyNordic

    Norwegian to acquire 100 % of FlyNordic ● Purchase agreement entered into on 30 June 2007 ● The transaction is pending approval from the Norwegian Competition Authorities ● Norwegian will publish an information memorandum on the transaction, as required by Oslo Stock Exchange ● The integration proce

  14. Slide 14: Recommendation for banking license given by Securities Commission

    ● Recommendation for banking license given by Securities Commission in June – Finance Ministry to conclude fall 2007 ● Conditional upon – Norwegian Air Shuttle ASA to hold max 20 % – Minimum share capital of 270 MNOK ● Project on track - planning equity issue in September and the bank to be fully op

  15. Slide 15: Expectations for remaining 2007

    Expectations for remaining 2007 Expected business environment: ● Increased competition on international routes ● Stable competition in Sweden and Poland Expected results (ex FlyNordic): ● Unit cost for 2007 in the area of NOK 0.53 – At current fuel and currency levels, and flight program – USD hedge

  16. Slide 16: Plenty of opportunities

    Plenty ofopportunities Plenty of opportunities - 93 routes 103 routes to 65 destinations More than 1000 weekly departures

Norwegian Air Shuttle — Q2 2007 Earnings Presentation on 6ix