Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q3 2007 Earnings Presentation
18 slides from Norwegian Air Shuttle Asa's earnings presentation, Oct 24, 2007
Slide 1: Norwegian (NAS) Q3 2007
Norwegian (NAS) Q3 2007 Bjørn Kjos (CEO) Oslo, 24. October 2007
Slide 2: Strong revenue growth continues in Q3 07
Strong revenue growth continues in Q3 07 ● The Group had total revenues of MNOK 1,324 which is a 51% increase since last year ● Acquisition of FlyNordic contributes MNOK 153 to top line growth in Q307 MNOK 1600 1200 800 400 0 Q3 04 Q3 05 Q3 06 Q3 07 Q3 04 Q3 05 Q3 06 Q3 07 Revenue 332 590 878 1323 D
Slide 3: Q3 07 margin improves on growing international traffic and ancillary revenue
Q3 07 margin improves on growing international traffic and ancillary revenue ● Group earnings (EBITDA) of 168 MNOK in Q3 07 (54 MNOK) ● Group earnings 76 MNOK after tax (28 MNOK) ● Group margin (EBITDA) of 14 % (6 % in Q3 06) EBITDA MNOK 200 160 168 120 80 Negative earnings 64 impact from 40 54 laun
Slide 4: The Polish operation shows positive results (EBITDA) in Q3 07
The Polish operation shows positive results (EBITDA) in Q3 07 ● Polish operations EBITDA 10 MNOK ● 13 MNOK earnings improvement since Q2 2007 ● The Warsaw base continues to improve, but is influenced by seasonality EBITDA MNOK 50 30 10 10 -3 Q4 06 Q1 07 Q2 07 Q3 07 -10 -30 -36 -52 -50 -70 4
Slide 5: Cash Flow fluctuation due to seasonality
Cash Flow fluctuation due to seasonality ● Cash flow from operations of MNOK -68 (-137) – Decrease in air traffic settlement liabilities ● Cash Flow from investments affected by: – Deposit for 42 new aircraft: MNOK -266 – Acquisition of FlyNordic: MNOK +126 ● Cash and equivalents MNOK 810 (387) Net
Slide 6: 39 % of Boeing 737-800 purchase has been hedged
39 % of Boeing 737-800 purchase has been hedged ● Instruments used are knock-in forwards ● Accounting standard IAS 39 – hedge accounting ● Inefficiency in hedge compared to cash flow on hedge object results in loss in Q3 of MNOK 31 charged to financial items 6
Slide 7: Production growth of 21 % absorbed by 23 % traffic growth
Production growth of 21 % absorbed by 23 % traffic growth ● 21 % production growth since last year, international growth of 24 % ● Load factor at 86 %, international load factor is leveling out at 87 % August & September Norwegian (million) Q3 03 Q3 04 Q3 05 Q3 06 Q3 07 ASK 331 683 1033 1693 2042 RP
Slide 8: 2 million passengers were carried through Norwegian's network last three months
2 million passengers were carried through Norwegian’s network last three months ● Number of domestic passengers is growing at approx 13 % ● Number of international passengers is growing at approx 56 % Passengers (Thousands) 2300 1800 1300 International Passengers Domsestic Passengers 800 300 Q3 03 Q
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 5
Slide 10: Cost development
Cost development ● Unit cost of 0.50 in Q3 2007 – Added cost of 0.01 from wet lease of two aircraft CASK NOK 0,55 0,5 0,02 Fuel Fuel 05-07 and 0,03 05-06 Wet Lease costs 0,51 0,45 0,50 0,47 0,46 0,4 Q3 04 Q3 05 Q3 06 Q3 07 10
Slide 11: Ancillary revenue grows as new products are introduced to the market
Ancillary revenue grows as new products are introduced to the market – still upside potential ● Q3 07 ancillary revenue 30 NOK per passenger (114 % growth) ● Driven by new and improved products maturing; – seating, baggage/carry on, commission from hotel and rental car bookings ● Major LCC’s ancilla
Slide 12: The credit card Norwegian Reward was made publicly available on 17 October
● The credit card ”Norwegian Reward” was made publicly available on 17 October ● The card is not only a credit card issued by Bank Norwegian, but also an integrated part of Norwegian Air Shuttle’s frequent flyer benefit program ● More than 15,000 cards were ordered within the first week. ● Condition
Slide 13: New, environmentally friendly fleet of Boeing 737-800s
New, environmentally friendly fleet of Boeing 737-800s 13
Slide 14: The most environment-friendly airplane in production
The most environment-friendly airplane in production Up to 43% reductions on a flight from Oslo to Alicante New technology engines + Blended winglets 4-5% extra CO2/NoX reductions 14 Source: Boeing
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 – May be negatively influenced if the fuel price remains at the curre
Slide 16: Expectations for 2008
Expectations for 2008 ● The growth in ASK for 2008 is expected to be in the area of 50 %. ● Growth target depends on the final delivery schedule of new 737-800 and finalization of route program ● Unit cost to come down to NOK 0,51- 0,52 due to changes to route portfolio mix Growth target ASK for 200
Slide 17: 129 routes to 76 destinations
Plenty of opportunities - 129 routes to 76 127 routes to 75 destinations destinations
Slide 18: Thank you!
Thank you! 18
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