Norwegian Air Shuttle Asa · OSL:NAS

Norwegian Air Shuttle Asa — Q4 2003 Earnings Presentation

20 slides from Norwegian Air Shuttle Asa's earnings presentation, Feb 26, 2004

1. Slide 1: Norwegian Air Shuttle ASA (NAS) Q4 2003 and FY 2003

   Norwegian Air Shuttle ASA (NAS) Q4 2003 and FY 2003 24-26 February 2004

2. Slide 2: Agenda

   Agenda _ Introduction _ Financials Q4 2003 and FY 2003 _ Norwegian low-fare operation _ Going forward 2004 2

3. Slide 3: Agenda

   Agenda _ Introduction _ Financials Q4 2003 and FY 2003 _ Norwegian low-fare operation _ Going forward 2004 3

4. Slide 4: Management introduction

   Management introduction Bjørn Kjos, CEO, founder _ Founded Norwegian Air Shuttle in 1993. _ Former managing partner of the law firm Vogt & Wiig. _ Aviation experience from RNOAF 334 squadron Frode E. Foss, CFO _ Ex. Ernst & Young and Arthur Andersen experience _ Masters in Business Administration Ol

5. Slide 5: Highlights

   Highlights Financials Q4 2003 and FY 2003 _ NAS is becoming a pure low-fare airline _ The low-fare operation is turning profitable _ NAS overall profit margins have improved from FY 2002 to FY 2003 _ NAS has established a strong financial position Norwegian low-fare operation _ Revenue is up, partly

6. Slide 6: Agenda

   Agenda _ Introduction _ Financials Q4 2003 and FY 2003 _ Norwegian low-fare operation _ Going forward 2004 6

7. Slide 7: NAS is becoming a pure low-fare airline

   NAS is becoming a pure low-fare airline Highlights Q4 2003 Total revenue (Mill NOK) _ Total revenue increased 40 % to MNOK 276 300 compared to Q4 2002 (MNOK 197). Mill _ Total operating expense increased 21 % to 250 MNOK 265 compared to Q4 2002 (MNOK 219) 200 150 NAS (MNOK) Q4 2003 Q4 2002 100 EBITD

8. Slide 8: The low-fare operation is turning profitable

   The low-fare operation is turning profitable Revenue development (B-737) Total revenue (Mill NOK) 300 Mill _ The low-fare operation is becoming a 1 billion NOK business, with 258 MNOK in turnover 250 74% for Q4 2003 200 _ High revenue growth throughout the period, 150 74% increase from Q4 2002 to Q4

9. Slide 9: NAS overall profit margins have improved from FY 2002 to FY 2003

   NAS overall profit margins have improved from FY 2002 to FY 2003 P&L FY 2003 Norwegian Air Shuttle ASA (MNOK) Q1 03 Q2 03 Q3 03 Q4 03 2003 2002 (1) B-737 Revenues 152 507 196 155 212 260 257 187 818 109 185 628 EBITDA -33 982 -8 704 -13 052 -245 -55 183 -49 316 NAS TOTAL Revenues 238 719 214 873 230

10. Slide 10: NAS has gained a strong financial position

    NAS has gained a strong financial position Balance Sheet FY 2003 Norwegian Air Shuttle ASA BALANCE SHEET _ Total Assets MNOK 524 – IPO MNOK 250 (MNOK 235) Q3 Pr 31.12 2003 2003 2002 – Equity ratio of 50 % FIXED ASSETS Intangible assets 52 093 62 861 32 418 Tangible fixed asstes 48 503 49 557 56 383

11. Slide 11: Agenda

    Agenda _ Introduction _ Financials Q4 2003 and FY 2003 _ Norwegian low-fare operation _ Going forward 2004 11

12. Slide 12: Load factor is up, revenue growth dampened by pressure on Yield

    Load factor is up, revenue growth dampened by pressure on Yield Mill ASK RPK/ASK Load factor development 400 80 % _ 2 more planes, 14 new routes and 350 70 % adjustments on established routes, brought 300 60 % total production (ASK) up 82% in Q4 2003, 250 50 % compared with Q4/02 200 40 % _ Passenge

13. Slide 13: Growing passenger volume, mainly driven by price campaigns on the internet

    Growing passenger volume, mainly driven by price campaigns on the internet Passenger (PAX) development Passenger volume (1000) 170 (000) 150 _ In order to increase market penetration, 130 pricing campaigns has been executed for ”low 110 season” and off peak periods in November / 90 December and on s

14. Slide 14: Costs are down from increased production and lower distribution costs

    Costs are down from increased production and lower distribution costs Cost per ASK 1,00 Operational costs per ASK 23% 0,90 _ Unit cost down 23 % compared to Q4 2002 0,80 0,70 0,60 _ Q4 compared to Q3 2003 - slightly higher due to: 0,50 – decreased production in December 0,40 – Increased maintenance

15. Slide 15: Agenda

    Agenda _ Introduction _ Financials Q4 2003 and FY 2003 _ Norwegian low-fare operation _ Going forward 2004 15

16. Slide 16: Strong market position going forward

    Strong market position going forward Market penetration _ Market share of 20 % on largest routes domestically, and increasing Route Market share 2003 ∆ Q3-Q4 _ 60 % internet sales Bergen 21,7 % _ Added new distribution channels: Trondheim 22,2 % ”Bedriftsportal”, Narvesen and SMS Stavanger 19,7 % Tr

17. Slide 17: Strong focus on top line growth and cost efficiency

    Strong focus on top line growth and cost efficiency Production Programme Mill ASK 800 Mill 600 _ Route expansion and plane additions in 2004 will increase revenue substantially 400 _ Positive sales development, particularly for 200 new international leisure routes _ 3rd party sales and ”add-ons” are

18. Slide 18: Continued high load factor expected for first half 2004

    Continued high load factor expected for first half 2004 Expected load factor development Total PAX Volume OSL 2003 _ Domestic load factor of 69% for January 750 000 2004 700 000 650 000 _ Domestic passenger volume expected to 600 000 increase in first half 2004 550 000 _ International load factor of

19. Slide 19: Lower yield and cost in first half 2004, due to increased flight sector length

    Lower yield and cost in first half 2004, due to increased flight sector length Expected yield development ABH / Cycle C/ASK Avg ABH pr flight Cost/ASK 1,00 1,60 0,90 _ Expected average sector length to increase 1,40 0,80 from 60 minutes in January to an average 1,20 0,70 of 75 minutes for 2004 1,00

20. Slide 20: Slide 20

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