Norwegian Air Shuttle Asa · OSL:NAS

Norwegian Air Shuttle Asa — Q1 2016 Earnings Presentation

23 slides from Norwegian Air Shuttle Asa's earnings presentation, Apr 21, 2016

  1. Slide 1: Norwegian Air Shuttle ASA Q1 2016 Presentation

    Norwegian Air Shuttle ASA Q1 2016 Presentation 21 April 2016

  2. Slide 2: Highlights Q1 2016

    Highlights Q1 2016 Launched new routes to/from Paris and the USA (LAX, NYC and FLL) and a short haul base in Rome, Italy Norwegian Reward reached 4 million members Tentative approval of NAI by the US Department of Transportation (DoT) Added five new 737-800 aircraft and one 787-9 Dreamliner to the f

  3. Slide 3: 5.8 million passengers in Q1 2016 (+18 %)

    5.8 million passengers in Q1 2016 (+18 %) 7 + 18 % 6 5 4 3 2 Passengers (million) 1 0 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Pax (mill) 1,3 2,0 2,1 2,7 3,1 3,6 3,9 4,9 4,9 5,8 3

  4. Slide 4: Available Seat KM (ASK) and load factor

    Q1 load factor up to 85 % (+2 p.p.) 17 % growth in capacity (ASK) 21 % growth in traffic (RPK) Average flying distance increased by 4 % ASK Load Factor Load 18 000 100% +2 p.p. 17 000 16 000 85,1 % 90% 83,0 % 15 000 77,2 % 77,2 % 76,1 % 77,3 % 74,8 % 74,8 % 75,1 % 74,3 % 80% 14 000 13 000 70% 12 000

  5. Slide 5: Holding or growing market shares in all key airports

    Holding or growing market shares in all key airports (last 12 months) + 1,034,000 pax 41 % mkt share 10 000 000 8 000 000 6 000 000 + 398,000 pax + 680,000 pax + 715,000 pax 17 % mkt share 4 % mkt share 22 % mkt share + 566,000 pax 10 % mkt share 4 000 000 + 171,000 pax 13 % mkt share 2 000 000 0 Os

  6. Slide 6: 23 % revenue growth in Q1

    23 % revenue growth in Q1 25 % growth in international revenue, + 15 % for domestic Scandinavia Unit revenue up by 5 % driven by yield (+2 %) and load (+2 p.p) offset by increased stage length 6 000 + 23 % 5 000 4 000 Domestic revenue 3 000 International revenue 2 000 Total Revenues NOK million 1 00

  7. Slide 7: 19 % growth in ancillary revenue in Q1

    19 % growth in ancillary revenue in Q1 16 % share of Group revenue 1 % growth per passenger NOK 138 NOK 136 Flexibility/ Flexibility/ modifications modifications Pre-sold packages Pre-sold (bundle) packages (bundle) Optional Seating extras Seating Baggage Baggage Other Ancillary Other Ancillary Q1 1

  8. Slide 8: Strongest growth in USA and Spain

    Strongest growth in USA and Spain Growing share of revenue in USD, GBP and Euro Norway now reduced to 35 % of group passengers Over 40% of passengers booking from outside Scandinavia Hungary USA France Other Italy Poland Spain Germany USA Hungary Norway France Finland Sweden UK UK Norway Italy Denma

  9. Slide 9: New corporate contracts boosting sales

    New corporate contracts boosting sales Revenue from corporate agreements Q1: • Norway up by 22 % y-o-y • Sweden up by 17 % y-o-y Corporate contracts signed in Q1 2016: Forsvaret (Norwegian army) • Four year contract from February for 17,000 employees (Norwegian only) Change Retail 65 % Consultants 3

  10. Slide 10: Reported earnings: lower fuel offset by currency

    Reported earnings: lower fuel offset by currency (NOK million) Q1 15 Q1 16 Change Revenue 4 034 4 961 EBITDAR 69 63 -6 EBITDA -502 -606 -104 Pre-tax profit (EBT) -776 -992 -216 Net profit -538 -800 EBITDAR development Q1 EBT development Q1 500 200 438 400 -50 300 -160 -300 200 NOK million NOK millio

  11. Slide 11: Underlying EBITDA up by NOK 400 million

    Underlying EBITDA* up by NOK 400 million NOK million Q1 2015 Q1 2016 chg Revenue 4 034 4 961 926 EBITDA as reported -502 -606 -104 Other losses/gains 3 -528 -531 EBITDA excl other losses/gains -505 -78 426 Non-recurring items: - strik e -110 - - wetlease -19 -112 Sum non-recurring items -129 -112 Cl

  12. Slide 12: Operating cost EBITDA level per ASK (CASK)

    Unit cost cut by 5 % CASK ex fuel +1 % to NOK 0.35 on currency 0,55 0,16 CASK excl fuel 0,50 0,11 0.15 Fuel share of CASK 0,45 0,11 0,12 0,15 0,40 0,13 0,10 0,07 0,14 Operating cost EBITDA level per ASK (CASK) 0,35 0,30 0,25 0,46 0,45 0,20 0,40 0,37 0,36 0,44 0,35 0,35 0,33 0,32 0,15 0,10 0,05 0,00

  13. Slide 13: Fuel share of opex reduced to 15 % (23% in Q115)

    Fuel share of opex reduced to 15 % (23% in Q115) 0,16 Sales/ distrib. 2% Depr. Fuel 0,14 4% 15 % Other Flight ops. exp. 4% 0,12 Fuel Gen. and Personnel adm. exp. 5% 16 % 0,10 Technical 7% 0,08 Airport & ATC Personnel Leasing 12 % 12 % Handling 0,06 Airport/ATC 10 % Handling Leasing 0,04 Other Techni

  14. Slide 14: NOK 1 bn higher cash-flow from operations

    NOK 1 bn higher cash-flow from operations Invested NOK 1.7 bn in new B737-800 aircraft NOK 3.2 billion in cash at the end of Q1 Q1 Q1 NOK million 2015 2016 Change Profit before tax -777 -992 -215 Depreciation 220 288 68 Air traffic settlement liabilities 2 497 2 954 457 Change working capital -945 -

  15. Slide 15: Net debt reduced by NOK 1 bn in the quarter

    Net debt reduced by NOK 1 bn in the quarter Added five new 737-800 on balance + PDP’s NOK 16 bn net debt (reduced from NOK 17bn at the end of 2015) Equity ratio of 6 % (11 % incl. market value of Bank Norwegian) 33 000 30 000 Aircraft 27 000 Financing 12 994 24 000 Aircraft 18 536 21 000 10 028 12 5

  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: Top modern fleet with an average age of 3.6 years

    Top modern fleet with an average age of 3.6 years Deliveries 787-9 Deliveries 737-800 Re-deliveries 737-800 2016: +1376 seats +3,162 seats -744 seats 160 156 7 B788/B789 Owned 14 140 B788/B789 Leased 12 A320neo owned 120 120 3 6 B737 MAX 8 owned 9 B738 owned 99 4 100 95 3 B738 S&LB 2 5 85 5 B738 lea

  18. Slide 18: Norwegian Group 2020 growth in 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

  19. Slide 19: Summer 2016: 18 crew bases and 106 aircraft

    Summer 2016: 18 crew bases and 106 aircraft Short haul: 96 aircraft Long haul: 10 aircraft LGW TRD NO FI JFK 738: 33 SE 738: 5 738: 13 OSL FLL BGO HEL ARN SVG BKK DK CPH UK 738: 8 738: 10 LGW IT 738: 2 ES BCN 738: 25 FCO MAD ALC AGP TFS LPA 19

  20. Slide 20: Launched new long haul routes to Paris

    Launched new long haul routes to Paris 20

  21. Slide 21: Outlook for 2016

    Outlook for 2016 Markets and business Soft macro and passenger tax to be introduced in Norway, strong competition in Denmark Stable in other key markets Positive momentum for long-haul Group bookings ahead of last year, capacity adjusted An estimated production growth (ASK) of 18 % (unchanged) Short

  22. Slide 22: Summary

    Summary Won several corporate agreements as businesses want to reduce travel expenses NAI has received tentative approval from DoT Bookings ahead of last year Financing on-track Unchanged guidance for 2016 on production and unit cost Bank Norwegian to be listed on OSE 22

  23. Slide 23: Norwegian operates 447 routes to 138 destinations

    Norwegian operates 447 routes to 138 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

Norwegian Air Shuttle — Q1 2016 Earnings Presentation on 6ix