Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q1 2019 Earnings Presentation
26 slides from Norwegian Air Shuttle Asa's earnings presentation, Apr 25, 2019
Slide 1: Norwegian Air Shuttle ASA Q1 2019 Presentation
Norwegian Air Shuttle ASA Q1 2019 Presentation 25 April 2019
Slide 2: Highlights Q1 2019
Highlights Q1 2019 Completed Strengthened balance sheet through a fully underwritten rights issue of NOK 3 billion to increase preferential financial flexibility and create headroom to the covenants of the outstanding bonds rights issue Sold and delivered two A320neo aircraft with a cash effect of U
Slide 3: Load factor of 81% in Q1 2019
Load factor of 81 % in Q1 2019 17 % growth in capacity (ASK) 12 % growth in traffic (RPK) 30,000 ASK Load Factor 100% 85.2 % 90% 84.4 % 84.5 % 83.0 % 81.0 % 25,000 77.2 % 76.1 % 77.3 % 80% 75.1 % 74.3 % 70% 20,000 60% 15,000 50% 40% Available Seat KM (ASK) 10,000 30% Load Factor 20% 5,000 10% 0 0% Q
Slide 4: 8.1 million passengers in Q1
8.1 million passengers in Q1 (+9 %) 10 9 + 9% 8 7 6 5 4 3 Passengers (million) 2 1 0 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17 Q1 18 Q1 19 PAX (mill) 2.7 3.1 3.6 3.9 4.9 4.9 5.8 6.7 7.5 8.1 PAX 12 mos. rolling (mill) 11.3 13.4 16.3 18.0 21.6 24.0 26.6 30.1 34.0 38.0 4
Slide 5: Continued passenger growth at all key airports
Contiued passenger growth at all key airports 5 Source: 12 month rolling passengers as reported by Avinor, Swedavia, Copenhagen Airports, Finavia, Gatwick Airport and Aena
Slide 6: Revenue per country
Revenue per country 7 % revenue growth in the Nordics on a 12 months rolling basis Largest absolute growth in the US, both in Q1 and 12 months rolling Growth in revenue by origin in Q1 19* (y/y): Revenue split by origin in Q1 19*: Revenue growth in Argentina was 1,377 % due to low capacity last year
Slide 7: A network of more than 60 intercontinental routes
A network of more than 60 intercontinental routes 7
Slide 8: Fleet plan before further aircraft divestment
Fleet plan before further aircraft divestment Deliveries 787-9 Deliveries 737 MAX Re-delivery 737-800 2019: +1,690 seats +3,024 seats -186 seats Considering sale of additional aircraft 8
Slide 9: Significant improvement in on-time performance
Significant improvement in on-time performance Q1 2019 OTP Introduced on-time performance project in April-May 2018 Punctuality in Q2 2019 increased by 8.2 p.p. Huge improvement in the long haul operation (+22 p.p.) Seven consecutive months with positive punctuality development Number of long arriva
Slide 10: Financials
Financials 10
Slide 11: Profit and loss
Profit and loss Positive P&L effect of NOK 883 million from fuel hedge gains Negative IFRS 16 effect on EBT of NOK 175 million due to expenses the first half of a lease period Reclassification of NOFI holding in Q1 2018 improved net financial items by NOK 1.9 billion 11
Slide 12: Unit revenue negatively impacted by Easter
Unit revenue negatively impacted by Easter Q1 unit passenger revenue (RASK) -3 % to 0.27 (-4 % in constant currency), negatively impacted by Easter effect Ancillary revenue per passenger increased by 3 % to NOK 167 Cargo revenue increased by 34 % to NOK 217 million 9,000 + 14 % 8,000 7,000 6,000 5,0
Slide 13: Operating cost EBIT level per ASK
Unit cost excluding fuel decreased by 8 % Unit cost excl fuel decreased by 8 % (decreased by 11 % in constant currency) Unit cost incl fuel decreased by 5 % (decreased by 10 % in constant currency) 0.60 CASK excl leasing, depreciation and fuel Leasing and depreciation 0.55 Fuel 0.50 0.11 0.45 0.12 0
Slide 14: Reduction in all cost elements except fuel
Reduction in all cost elements except fuel Higher fuel cost (+5 % per ASK) driven by stronger USD vs NOK (+9 %), partly offset by lower fuel spot price (-3 %) and efficiency gains Lower personnel cost (-9 % per ASK) due to increased utilization of crew following FOCUS2019 initiatives Lower lease and
Slide 15: FOCUS2019: Exceeded Q1 target by reaching NOK 467 million in cost reduction
FOCUS2019: Exceeded Q1 target by reaching NOK 467 million in cost reduction Actual Cost area Completed cost initiatives (MNOK) • Negotiations with airports have led to lower charges and additional bonuses Airport, handling • Negotiations with technical suppliers have led to lower prices and better v
Slide 16: FOCUS2019: Cost bridge
FOCUS2019: Cost bridge 9,477 288 -467 -302 8,708 1,356 7,833 Cost* Q1 2018 Production Currency & Fuel Base cost Focus 2019 Other & IFRS Cost* Q1 2019 increase Q1 2019 16 *Total operating expenses excl other losses/gains, lease and depreciation
Slide 17: Balance sheet
Balance sheet IFRS 16 increased assets and liabilities by NOK 32.8 billion as operating leases are added to the balance sheet Aircraft that are sold but not delivered are classified as non-current assets, while the associated debt is classified as current liability 17
Slide 18: Cash flow
Cash flow NOK million Q1 2019 Q1 2018 The IFRS 16 effect was +1,323 on Profit before tax -1,978 -515 operating activities and -1,323 on Paid taxes -8 -53 financing activities Depreciation, amortization and impairment 1,546 336 Changes in air traffic settlement liabilities 4,923 4,492 The two 787s de
Slide 19: IFRS 16 transition effects
IFRS 16 transition effects NOK billion 88.8 88.8 32.8 -32.8 56.0 56.0 31 Dec 2018 Transition effects 1 Jan 2019 1 Jan 2019 Transition effects 31 Dec 2018 ROU assets lease liabilities ASSETS EQUITY & LIABILITIES 19
Slide 20: IFRS 16 income statement effects in Q1 2019
IFRS 16 income statement effects in Q1 2019 NOK billion -1,086 1,264 59 -412 -1,802 -1,978 EBT ex IFRS 16 IFRS 16 OPEX IFRS 16 Aircraft lease IFRS 16 Depreciation IFRS 16 Interest costs EBT incl IFRS 16 20
Slide 21: Capital expenditure and financing
Capital expenditure and financing Capital expenditures Postponed aircraft deliveries in Q1 and Q2 to create financial headroom and move capex commitments of USD 2.1 billion from 2019 and 2020 Capital commitments (all aircraft incl PDP) 2019 2020 Total contractual commitments USD 1.7 billion USD 1.2
Slide 22: Outlook
Outlook 22
Slide 23: Estimated unit cost reduction of 2% compared to Q1 2018
Estimated unit cost reduction of 2 % compared to Q1 2018 Unit cost estimates 2019 Approximately NOK 0.30 incl depreciation costs excl fuel (previous estimate: 0.295-0.300) Approximately NOK 0.42 incl depreciation costs and fuel (previous estimate: 0.4075-0.4125) Including up to NOK 500 million effec
Slide 24: Expect positive RASK development in Q2
Expect positive RASK development in Q2 Fuel hedging (unchanged) 53 % of H1 2019 at USD 681 38 % of FY 2019 at USD 680 Markets and business Current bookings indicate a positive RASK development in Q2 Continued positive development in long haul Soars to #1 in New York as leading foreign airline, demon
Slide 25: Continued focus on the strategic change from growth to profitability in 2019
Continued focus on the strategic change from growth to profitability in 2019 Reducing CAPEX by USD 2.1 billion in total through restructuring of fleet order and Creating postponement of aircraft deliveries for 2019 and 2020 in total headroom and Contracted sales of 15 aircraft with delivery in 2019
Slide 26: Fly Norwegian - Book tickets at Norwegian.com
Book tickets at Fly Norwegian Norwegian.com 26
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