Norwegian Air Shuttle Asa · OSL:NAS

Norwegian Air Shuttle Asa — Q2 2017 Earnings Presentation

29 slides from Norwegian Air Shuttle Asa's earnings presentation, Jul 13, 2017

  1. Slide 1: Norwegian Air Shuttle ASA Q2 2017 Presentation

    Norwegian Air Shuttle ASA Q2 2017 Presentation 13 July 2017

  2. Slide 2: Highlights Q2 2017

    Highlights Q2 2017 Winner of SkyTrax awards for World’s Best Low-Cost Long Haul Airline (3rd time in a row) and Europe’s Best Low-Cost Airline (5th time in a row) Start-up of single aisle intercontinental operations between US and UK, Ireland and Norway Added two new Boeing 737 MAX’s, eight 737-800’

  3. Slide 3: More than 200 million passengers since start-up in 2002

    More than 200 million passengers since the start-up in 2002 ++1215%% 9 8 7 6 5 4 3 Passengers (million) 2 1 0 Q2 08 Q2 09 Q2 10 Q2 11 Q2 12 Q2 13 Q2 14 Q2 15 Q2 16 Q2 Q2 17 17 Pax (mill) 2.3 2.8 3.2 4.0 4.5 5.5 6.4 7.0 7.7 8.6 Pax 12 mths rolling (mill) 8.4 9.7 11.8 14.2 16.7 19.0 22.5 24.6 27.4 31.

  4. Slide 4: Available Seat KM (ASK)

    Stable Q2 load factor of 88 % 19 % growth in capacity (ASK) and traffic (RPK) Load ASK Load Factor -0.1 p.p. 20,000 100% 19,000 87.8 % 87.7 % 18,000 85.2 % 90% 17,000 79.6 % 78.4 % 78.3 % 78.3 % 16,000 76.5 % 76.9 % 80% 75.4 % 15,000 14,000 70% 13,000 12,000 60% 11,000 10,000 50% 9,000 8,000 40% Ava

  5. Slide 5: Continued growth in all key airports

    Continued growth in all key airports 5 Source: 12 month rolling passengers as reported by Avinor (preliminary figures), Swedavia, Copenhagen Airports, Finavia, Gatwick Airport, Aena

  6. Slide 6: Stable passenger mix

    Stable passenger mix 8 % passenger growth in the Nordics 36 % and 25 % growth in the US and France respectively Growth in number of passengers in Q2 17 (y/y): Split passengers by origin in Q2 17: 6

  7. Slide 7: 17% revenue growth in Q2

    17 % revenue growth in Q2 Q2 unit passenger revenue (RASK) -3 % to 0.36 (-2 % in constant currency) Average flying distance increased by 6 % 4 % growth in ancillary revenue per passenger (NOK 136) 9,000 + 17 % 8,000 7,000 6,000 5,000 4,000 3,000 2,000 NOK million 1,000 0 Q2 13 Q2 14 Q2 15 Q2 16 Q2 1

  8. Slide 8: 737 MAX advantage

    737 MAX advantage 13 % lower fuel consumption per seat per trip Boeing 737-800 Boeing 737 MAX 8 4 % lower seat costs per trip 189 passengers (+3) Source: Boeing 8

  9. Slide 9: ~17% longer range to reach new markets

    ~17 % longer range to reach new markets 737 MAX 3,100 nm/5,741 km 737-800 2,640 nm/4,889 km Standard Operational Rules 50% annual winds Airways and traffic allowances included 737-800 includes optional winglets Source: Boeing 9

  10. Slide 10: Renewing the fleet with the MAX

    Renewing the fleet with the 737 MAX 10

  11. Slide 11: A route portfolio of 58 intercontinental routes

    A route portfolio of 58 intercontinental routes 11

  12. Slide 12: Adding 32 new aircraft in 2017

    Adding 32 new aircraft in 2017 Deliveries 787-9 Deliveries 737-800 and 737 MAX Re-deliveries 737-800 2017: +3,096 seats +4,296 seats -744 seats 12

  13. Slide 13: Heading towards WiFi on the entire fleet

    Heading towards WiFi on the entire fleet Signed contracts to provide WiFi in the 737 MAX and 787 fleet Extended the existing WiFi contract for the 737 fleet to increase band width by more than 40 % WiFi on 101 WiFi installed on WiFi on all Delivery of the first 787 with WiFi 737-800 737 MAX fleet 73

  14. Slide 14: Financials

    Financials 14

  15. Slide 15: Q2 net profit above 1 bn

    Q2 net profit above 1 bn 12 mths rolling 12 mths rolling Q2 17 Q2 16 Chg Q2 17 Q2 16 Chg Revenue 7,775 6,632 1,142 27,643 24,189 3,454 EBITDAR 990 1,965 -976 4,313 4,369 -56 EBITDA 59 1,324 -1,265 1,119 1,935 -816 Pre-tax profit (EBT) 861 930 -69 583 333 250 Net profit 1,080 745 334 778 405 373 EBT

  16. Slide 16: Clean EBITDA of NOK 301 million

    Clean EBITDA* of NOK 301 million 12 mths rolling 12 mths rolling NOK million Q2 17 Q2 16 Chg Q2 17 Q2 16 Chg Revenue 7,775 6,632 1,142 27,643 24,189 3,454 EBITDA as reported 59 1,324 -1,265 1,119 1,935 -816 Other losses/gains -197 460 -657 -192 645 -837 EBITDA ex. other losses/gains 256 864 -608 1,3

  17. Slide 17: EBITDA (ex. other losses/gains) bridge

    EBITDA (ex. other losses/gains) bridge 17

  18. Slide 18: Operating cost EBITDA level per ASK (CASK)

    Unit cost driven by fuel and SLB Unit cost ex. fuel increased by 7 % (5 % in constant currency) Unit cost increased by 9 % (7 % in constant currency) 0.55 CASK ex. fuel 0.50 Fuel share of CASK 0.45 0.18 0.09 0.15 0.40 0.15 0.15 Operating cost EBITDA level per ASK (CASK) 0.10 0.35 0.14 0.09 0.14 0.11

  19. Slide 19: Unit cost (CASK) driven by fuel cost and leasing

    Unit cost (CASK) driven by fuel cost and leasing Higher fuel cost (+16 % per ASK) driven by spot price (+22 %) and weaker NOK vs USD (3 %) Higher personnel cost (+12 % per ASK) due to ramp-up of intercontinental operations. FTE’s increased by 41 % Lower airport/ATC and handling (-5 % and -9 %) due t

  20. Slide 20: Comparison of unit cost incl. depreciation

    Comparison of unit cost incl. depreciation Sources: Based on official full-year 2016 annual report for Norwegian Air Shuttle, Finnair, Vueling, SAS Group (31.10.2016), Easyjet (30.09.2016), and full-year 2015 report for Ryanair and WizzAir (31.03.2016). Ryanair’s ASK is based on consensus median fro

  21. Slide 21: NOK 1.4 bn cash-flow from operations in Q2

    NOK 1.4 bn cash-flow from operations in Q2 Strong liquidity with NOK 5.8 bn in cash at the end of Q2 Cash-flow from operations of NOK 2.5 bn the last 12 months (3.3 bn) Invested NOK 3.4 bn the last 12 months 12 mths rolling 12 mths rolling NOK million Q2 17 Q2 16 Chg Q2 17 Q2 16 Chg Profit before ta

  22. Slide 22: Financing on track

    Financing on track Expected capex (all aircraft incl. PDP) USD 0.7 bn for 2017 (reduced from USD 1.3 bn) USD 2.1 bn for 2018 PDP financing / liquidity PDP financing for 50 Airbus 320neo’s Credit facility (NOK 1 bn) Repayment of bond on July 3 (NOK 1 bn) Long-term financing Financing in place for all

  23. Slide 23: Net debt reduced further by NOK 0.9 bn

    Net debt reduced further by NOK 0.9 bn Added three new 737-800, two 737 MAX and three 320neo’s on balance the last 12 months NOK 19.3 net debt (reduced from 20.2 bn in Q1 2017) 8 % equity ratio (unchanged) 45,000 40,000 Aircraft financing 35,000 14,238 Aircraft 20,040 30,000 PDP and bonds 16,392 25,

  24. Slide 24: Outlook

    Outlook 24

  25. Slide 25: Capacity adjusted forward bookings

    Capacity adjusted forward bookings 25 The graph shows booked and paid travels. Bookings per July 10, 2017 and July 11, 2016 (corresponding weekday).

  26. Slide 26: Outlook for 2017

    Outlook for 2017 Markets and business Negative revenue impact from currency and distance Capacity adjusted booking volumes ahead of last year An estimated production growth (ASK) of 25 % (previous estimate: 30 %) Q3: 25 % ASK growth Q4: 30 % ASK growth Fuel hedging 52 % of 2017 at USD 494 and 27 % o

  27. Slide 27: CASK guiding strongly influenced by relocation of costs

    CASK guiding strongly influenced by relocation of costs New CASK without SLBs 27

  28. Slide 28: Going forward

    Going forward Solid bookings ahead of Q3 Focus on global expansion and strong growth in staff, routes and aircraft Launched intercontinental routes between UK and Argentina and between Rome and US, as well as more US destinations from Paris and London Strengthened liquidity to meet the future more r

  29. Slide 29: Norwegian operates 500 routes to 150 destinations

    Norwegian operates 500 routes to 150 destinations From bases in SWEDEN DENMARK FINLAND Intercontinental From bases in From the From bases in SPAIN UK base NORWAY 29

Norwegian Air Shuttle — Q2 2017 Earnings Presentation on 6ix