Norse Atlantic Asa · OSL:NORSE
Norse Atlantic Asa — Norse Atlantic Airways — Q1 2023 Earnings Presentation
29 slides from Norse Atlantic Asa's earnings presentation, May 31, 2023
Slide 1: Company Presentation
Norse Atlantic Airways Company Presentation 31 May 2023 First quarter 2023 report Explore
Slide 2: Index
INDEX Norse at a Glance 03 The Norse Fleet and Network 09 Commercial Strategy and Bookings 15 Q1 2023 Financials 20 Summary 26 2
Slide 3: Norse at a Glance
PART 1 Norse at a Glance 3
Slide 4: Norse Atlantic Airways – The Explorers' Airline
AIRLINES FLIGHT Norse Atlantic Airways – The Explorers’ Airline A low-cost, long-haul transatlantic airline Established and founded in March 2021 by Bjørn Tore Larsen, CEO and major shareholder All aircraft in operation from 1 July 2023 Point-to-point transatlantic flights at affordable fares London
Slide 5: Ready for peak summer 2023
Ready for peak summer 2023 Building a leading low-cost transatlantic airline in two years: all aircraft in production from 1ˢᵗ July All regulatory approvals and necessary airport slots secured Ready to go Organization, including people and systems, in place Increasing capacity Bringing new aircraft
Slide 6: We've been busy, but we're only just getting started…
We’ve been busy, but we´re only just getting started… Founding and IPO Norway AOC¹ First flight Norway AOC¹ UK AOC¹ Feb 2021 Mar/Apr Aug 2021 Dec 2021 Mar 2022 Jun 2022 Aug 2022 Oct 2022 Feb 2023 Mar 2023 May 2023 Norse 2021 Signs lease Norse Norse First flight Inaugural Norse Charles First flight o
Slide 7: Significant value created since inception
Significant value created since inception Established UK subsidiary is a game changer Early investments are paying off Unique in the industry: a fully-fledged, Secured 5 valuable slots at LGW and JFK low-cost long-haul operation Allows Norse to serve large and highly attractive Brand recognition is
Slide 8: Norse's path to a winning business model
Norse´s path to a winning business model Market leading High utilization Single fleet type aircraft cost Lowest CASK in Collaborations for Harmonious labour transatlantic in-house relations market flight school Connecting major markets 2021 Best Services Two cabin classes for Cargo revenues and focu
Slide 9: Fleet and Network
PART 2 Fleet and Network 9
Slide 10: Modern and more environmentally friendly aircraft
Modern and more environmentally friendly aircraft Modern and homogenous fleet Homogenous fleet of modern 787-9s and -8s Freshly checked aircraft – more than 2 years until next service Superior environmental performance 25% lower CO2 emissions 50% quieter than the previous generation of aircraft sti
Slide 11: Lease contracts increasing in value
Lease contracts increasing in value Shortage of supply of Boeing Dreamliners Timing is everything: NPV of remaining lease advantage NPV at various rates and WACC = 10%, USDm 600 Norse lease rates are capped at approximately 50% of historical cost 400 Current lease rates for 787-9s USD 865 to 1,050¹
Slide 12: Norse serves 16 destinations
Norse serves 16 destinations Summer ’23 and Winter ’23 destinations currently on sale Rapidly increasing available seats for sale Summer ‘23 network is Europe- US only Winter ‘23 includes routes to Caribbean and Thailand * Some routes are seasonal 12
Slide 13: Increasing production at the right time
Increasing production at the right time All aircraft generating revenue from 1 July 2023 ASK (m) 1,250 Norse bringing additional aircraft online 1,000 ahead of peak S23 season New routes scheduled for S23: 25 May London to Orlando 750 26 May London to Fort Lauderdale/Miami 1 June London to Washingto
Slide 14: UK market is key to transatlantic travel
UK market is key to transatlantic travel London twice the size market as any other; Paris a clear second with twice the size of the next (Rome) London by far the largest European hub for US traffic, and also has among the highest yields Large and high yield market creates opportunity to carve out de
Slide 15: Commercial Strategy and Bookings
PART 3 Commercial Strategy and Bookings 15
Slide 16: The 5 pillars of Norse commercial strategy
The 5 pillars of Norse commercial strategy 1 2 3 4 5 Unbundled low Ancillary Services Norse Premium Best-in-class Revenue from fare structure Class cargo product leases and Gives flexibility to travellers and extra charter Unlocking new Targeting cost- Wide-body aircraft revenue from third- consciou
Slide 17: Forward bookings increase as network expands
Forward bookings increase as network expands Rolling seven days bookings in USDm and number of passengers by booking date As at 25 May 2023 Increasing selling windows allows for higher yields: S22 season on sale ~3 months in advance W22 season on sale ~4 months in advance S23 on sale ~5 months in ad
Slide 18: Fares increasing overall and on like-for-like basis
Fares increasing overall and on like-for-like basis Based on booked fares as of 25 May 2023 Ticket revenue per segment Net fare comparison Based on booking date Based on month of flight Average fare continuing to increase >35% higher fare for S23 bookings versus flown S22 16 18
Slide 19: Driving ancillary revenue
Driving ancillary revenue Airport ancillary revenue Norse’s fare model provide pricing flexibility to passengers Includes all ancillary sales done at check-in, such as upgrades and application of baggage policies Passengers pays for what they choose >500% May-to date compared to actual 2022 while No
Slide 20: Q1 2023 Financials
PART 4 Q1 2023 Financials 20
Slide 21: Income statement
Income statement Low earnings due to limited production in the historical low season 3 months 3 months 12 months USD thousands Q1 2023 Q4 2022 FY 2022 Revenue 39,757 46,428 104,269 Q1 2023 revenue down 14% versus prior Personnel expenses 19,353 17,434 44,462 quarter due to 9% reduced capacity (ASK)
Slide 22: Balance sheet
Balance sheet Statement of financial position $914 million aircraft right-of-use asset USD thousands 31 Mar-23 31 Dec-22 15 Boeing 787 Dreamliners on leases with average remaining life ~11 years Non-current assets 952,148 973,037 Corresponding lease liability of $963 million Total current assets 1
Slide 23: Cash flow statement
Cash flow statement 3 months 3 months 12 months USD thousands Q1 2023 Q4 2022 FY 2022 Q1 2023 cash outflow $28 million driven by: Operating cash flows (20,773) (13,264) (68,639) $21 million outflow from operations $8 million outflow from fixed aircraft Investing cash flows 1,256 7,921 (24,956) lea
Slide 24: Cash performance on-track
Cash performance on-track Cash flow actual versus projected in equity raise pitch presented Nov-22 (USD) Actual Presented Nov-22 Millions 125,000,000 100,000,000 75,000,000 50,000,000 25,000,000 0 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Actual inclu
Slide 25: Key operational numbers since first flight
Key operational numbers since first flight 14 June to 30 Apr 2023 Jun22 Jul22 Aug22 Sep22 Oct22 Nov22 Dec22 Jan23 Feb23 Mar23 Apr23 Number of aircraft in 11 13 13 13 14 14 15 15 15 15 15 fleet Aircraft subleased out 2 4 4 4 4 4 5 5 5 5 5 ASK (millions) 54 248 505 663 567 293 384 397 344 390 449 RPK
Slide 26: Summary
PART 5 Summary 26
Slide 27: Summary and outlook
Summary and outlook Once in a lifetime opportunity to build a profitable long haul low cost transatlantic airline Strategy and business Unit costs in line with target (excl. fuel) and will further improve with increased scale case validated Modern fuel-efficient fleet; lease contracts substantially
Slide 28: Norse will be...
Norse will be... The first truly low-cost sustainable transatlantic airline The lowest unit cost airline amongst peers The highest ancillary revenue per passenger in the industry The lowest emissions per passenger versus long-haul peers The most affordable and best value transatlantic product 28
Slide 29: Thank You For Flying With Us!
Thank You For Flying With Us! flynorse.com Explore
Norse Atlantic Airways — Q1 2023 Earnings Presentation on 6ix