Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q3 2005 Earnings Presentation
19 slides from Norwegian Air Shuttle Asa's earnings presentation, Nov 10, 2005
Slide 1: Norwegian (NAS) Q3 2005
Norwegian (NAS) Q3 2005 Bjørn Kjos (CEO) Oslo, 10. November 2005 Norwegian Air Shuttle ASA
Slide 2: Since last time...
Since last time... Fra den 29. mars 2006: Norwegian starter direkterute Oslo-Madrid Norwegian apner 29. mars en ny layprisrute mellom Oslo og Madrid. lf G J Ruten vil fa fire ukentlige avganger. — Med den nye ruten til Madrid " — : « forsterker vi var posisjon pa Europas “nye” og spennende storbyer,
Slide 3: Another profitable quarter
Another profitable quarter ● 590 MNOK in turnover in Q3 05, compared to 332 MNOK in Q3 04. ● Revenue growth 78 % ● EBITDA margin of + 11 %, - 3 % last year Revenue development MNOK 700 78 % 600 500 400 44 % 300 200 100 0 Q3 03 Q3 04 Q3 05 EBITDA MNOK -20 -11 64 EBITDA margin % -9 % -3 % 11 % Earning
Slide 4: Cabin factor at LCC level
Cabin factor at LCC level ● 51 % production increase from Q304 to Q305 ● 91 % growth in passenger traffic (RPK) ● 86 % cabin factor in Q305, up from 69 % in Q304 Cabin Factor 1 033 90 % 85 % 683 80 % 75 % 331 70 % 65 % 67 % 69 % 86 % 60 % Q3 03 Q3 04 Q3 05 Cabin Factor ASK PAX (000)* 324 549 947 *Ti
Slide 5: One third chose Norwegian in Q3
One third chose Norwegian in Q3 ● Over 30 % market share on key domestic routes ● Capacity increased 18 % while market share jumped 4-8 %-points 35 % 34 % 31 % 28 % 29 % 30 % 26 % 23 % 24 % 25 % 22 % 20 % 15 % 10 % Bergen Trondheim Stavanger Tromsø Q3 04 Q3 05 5
Slide 6: Norwegian, guarantist for low fares
Norwegian, guarantist for low fares ● Profitable operation does not mean fares are more expensive ● Norwegian’s domestic fares has on an average been stabel over the last year ● Norwegian`s international fares varies due to introduction prices on new routes, and seasonalities Norwegian's average tic
Slide 7: Keep it simple!
Keep it simple! ● Fuel surcharge and fees are just another way to fool passengers into paying to much ● Average fuel cost pr passenger is stable ● It all comes down to low prices and high volume NOK NOK/Tonn 140 4500 120 4000 100 3500 80 3000 60 2500 40 20 2000 0 1500 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q
Slide 8: It is a “win-win” situation
It is a “win-win” situation ● Yield is down and fares are cheaper ● Cheaper fares gives higher volume ● Higher volume gives profitable operation Yield development Q305 vs, Q304 RASK development Q305 vs, Q304 33 % 18 % 15 % 10 % 2% 0% Short dom/int Long domestic Central Europe Southern Europe -3 % -9
Slide 9: Cost target Q3 2005 achieved
Cost target Q3 2005 achieved ● Average unit costs of 0.51 NOK in Q305 ● Achieved unit costs of 0.49 NOK, when adjusted for fuel price increase Q304 – Q305 ● Expected unit cost of 0.55 NOK for 2005 Cost pr ASK 0,65 0,60 - 2,7 %* 0,55 0,50 0,45 0,40 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Target 2005 Target 200
Slide 10: Increased fleet and crew utilization
Increased fleet and crew utilization ● Aircraft utilization of 9.9 block hours pr plane per day, up 22 % from Q304 (8,1) ● Crew utilization of 715 block hours pr crew per year, up 7 % from Q304 Block hours/plane/day Block hours/crew/year 22 % 10 7% 700 9 8 600 7 500 6 5 400 Q3 03 Q3 04 Q3 05 Q3 03 Q
Slide 11: Lean organisation
Lean organisation ● Passengers pr employee approaching 8.000 pr year ● Non core activities outsourced 8000 31 % 7000 6000 5000 4000 3000 2000 Q2 02 Q3 03 Q3 04 Q3 05 Pax pr employee* Pax pr employee* 3 112 4 319 5 489 7 216 (*) Q3 level grossed up to one year 11
Slide 12: Lower distribution costs
Lower distribution costs ● Distribution costs per sold ticket of NOK 21, down 44% from Q304 (NOK 38) ● Initiative in cooperation with Amadeus is expected to bring costs even further down NOK pr sold ticket 50,0 - 44 % 40,0 30,0 20,0 10,0 Q3 03 Q3 04 Q3 05 12
Slide 13: New LLC commercial IT platform
New LLC commercial IT platform ● Norwegian and Amadeus are developing a new LCC commercial IT platform → Siginficant lower distribution cost → Improved funcitonality → Online link to travel agents global booking systems → Increased business development opportunities → Maintains aviliability in all s
Slide 14: Cheapest available fare is always displayed!
Cheapest available fare is always displayed! ● www.norwegian.no, a pioneer in new internet user interface with “low fare calendar” functionality. ● www.norwegian.no accounts for 77 % of ticket sales. ● Scandinavia’s most successful commercial website. Present on the list of the world’s top 10.000 mo
Slide 15: Positive cash flow
Positive cash flow ● Cash-balance of 249 MNOK ● Positive net change of 54 MNOK in 2005, 16 MNOK in Q305 ● Prepaid tickets of 224 MNOK, receivables of 119 MNOK CASH FLOW (TNOK) Third quarter Accumulated Form: 2005 2004 2005 2004 2004 Operation activites 37 524 -79 388 100 774 -68 355 -90 847 Investme
Slide 16: Continued expansion in 2006
Continued expansion in 2006 ● Currently another 2 planes on order (16 total) ● Expected production increase in the magnitude of 50 % compared to last year (*) ● Mainly from international expansion ASK Expansion case 16 aircraft - 2006 2 000 1 500 1 000 500 - Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06
Slide 17: Expectations for remaining 2005
Expectations for remaining 2005 Expected business environment : ● Continued market increase from low prices ● Increased price competition on international routes ● Seasonal fluctuation on yield ● Fuel prices at current levels Expected results: ● Unit cost of 0,55 NOK for 2005 ● Positive operating ea
Slide 18: Thank you, - and fly Norwegian!
Thank you, - and fly Norwegian! 18
Slide 19: Slide 19
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