Norwegian Air Shuttle Asa · OSL:NAS
Norwegian Air Shuttle Asa — Q1 2006 Earnings Presentation
21 slides from Norwegian Air Shuttle Asa's earnings presentation, Apr 27, 2006
Slide 1: Norwegian (NAS) Q1 2006
Norwegian (NAS) Q1 2006 Bjørn Kjos (CEO) Oslo, 27. April 2006 Norwegian Air Shuttle ASA
Slide 2: Strong revenue growth in Q1
Strong revenue growth in Q1 ● 539 MNOK in revenue in Q1 2006 ● Revenue growth of 69 % since Q1 2005 Revenue MNOK 600 69 % 550 500 450 400 35 % 350 300 250 200 Q1 04 Q1 05 Q1 06 Revenue 236 320 539 Earnings after tax -40 -34 -43 EPS -2,72 -2,41 -2,90 2
Slide 3: Continued margin improvement
Continued margin improvement ● EBITDA of -52 MNOK in Q1 2006 ● Earnings after tax -43 MNOK (-34) ● Margin up 4 pp in since Q105 EBITDA MNOK EBITDA margin 40 0% 20 Q104 Q105 Q106 -5 % 0 -10 % -20 -40 -15 % -60 -20 % -80 -100 -25 % Revenue 236 320 539 EBITDA MNOK -50 -44 -52 EBITDA margin % -21 % -14
Slide 4: Margin development
Margin development ● Margin has improved with 4 pp vs Q105 ● Margin growth of 11 pp in 2 years Margin development - EBITDA 30 % 20 % 10 % 0% -10 % -20 % -30 % Q1 Q2 Q3 Q4 2004 -21,1 % -11,7 % -3,4 % -13,0 % 2005 -13,8 % 5,8 % 10,8 % 0,9 % 2006 -9,8 % 4
Slide 5: Strong cash flow from advanced bookings
Strong cash flow from advanced bookings ● Positive cash flow from operation of 192 MNOK ● Investments : Aircraft purchase ● Cash 522 MNOK included private placement 120 MNOK Operation activities 300 CASH FLOW (TNOK) First quarter 250 Form: 2006 2005 Operation activites 192 732 1 832 200 Investments
Slide 6: Continued load factor growth
Continued load factor growth ● 64 % production increase from Q105 to Q106 ● 85 % growth in passenger traffic (RPK) ● 77 % load factor in Q106, up 9 %-points Cabin Factor 78 % 933 76 % 74 % 569 72 % 70 % 33370370703704 68 % 3709370 66 % 64 % 62 % 65 % 68 % 77 % 60 % Q1 04 Q1 05 Q1 06 Cabin Factor ASK
Slide 7: Strong passenger growth
Strong passenger growth Thousand pax 84 % 1 100 900 38 % 700 500 300 100 Q1 04 Q1 05 Q1 06 -100 PAX (000)* 398 550 1 014 7 *Tickets sold for travel
Slide 8: Enhanced competitive position
Enhanced competitive position ● 40 % market share on key domestic routes ● Capacity increased by 30 % since Q1 05 % Market Share 45 % 40 % 35 % 42 % 43 % 30 % 38 % 33 % 33 % 34 % 25 % 30 % 27 % 20 % Bergen Trondheim Stavanger Tromsø Q1 05 Q1 06 8
Slide 9: Strong revenue growth, both domestic and international
Strong revenue growth, both domestic and international ● International turnover increased by 180 % since Q1 2005 ● Domestic turnover increased by 36 % since Q1 2005 Revenue 400 000 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 Q1 04 Q1 05 Q1 06 Turnover domestic Turnover abroad 9
Slide 10: Still a guarantor for low fares
Still a guarantor for low fares ● Domestic prices are down 4 % Q106 compared to Q105 ● Norwegian`s international fares vary due to introductory prices on new routes, and seasonal variation Norwegian's average ticket price - index (Q1 03 = 100) Minor price Major price Profitable 100 w ar (PW I) w ar
Slide 11: CASK at Q105 level due to fuel price increase
CASK AT Q105 LEVEL DUE TO FUEL PRICE INCREASE ● Unit costs of 0.63 NOK in Q106, ● Cost reduction of 7 % ● Given same fuel price level as Q105, EBITDA of - 22 MNOK in Q106 CASK 0,64 0,64 0,62 Fuel Q105/ Q106 0,03 0,60 0,60 0,58 0,56 0,54 0,52 0,50 Q1 05 Q1 06 11
Slide 12: Increased fleet and crew utilization
Increased fleet and crew utilization ● Crew utilization of 680 block ● Aircraft utilization of 9.6 block hours pr crew pr year, up 12 % hours pr plane pr day, up 41 % from Q1 2005 (609) from Q1 2005 (6,8) Block hours/crew/year Block hours/plane/day 10 700 9 600 8 500 7 400 6 300 5 Q1 04 Q1 05 Q1 06
Slide 13: Lean organization
Lean organization ● Carrying approx 7400* passengers per employee ● Approx 50 % growth since Q105 ● Non core activities outsourced Passenger pr employee 50 % 2000 1800 1600 1400 1200 1000 800 600 400 200 0 Q103 Q104 Q105 Q106 13 * Annualized
Slide 14: Lower distribution costs
Lower distribution costs ● Distribution costs pr sold ticket of NOK 23,5 down 10 % from Q1 2005 ● Joint partnership with Amadeus will bring costs even further down Distribution costs per passenger NOK pr pax 40,0 35,0 30,0 25,0 20,0 15,0 Q1 04 Q1 05 Q1 06 14
Slide 15: Cost development on track to be profitable in Q1
Cost development on track to be profitable in Q1 Ebitda Q106 = - 52 MNOK Cost reduction pr pax Passengers = 1,014 MILL 60 Needed cost reduction pr passenger to break even = 50 NOK 30 New handling contract The trainee program 0 Capacity increase 10 Distribution costs -30 30 Fuel costs from price incr
Slide 16: Leading Nordic LCC
Leading Nordic LCC a é: AS AWS ES a r antin x 2 ' a el Lg Hamburg b = © Paris ~ i gf Berlin @ © a 3 oe MAT | Es = “a Lf HPT TS : S LA y 5 Ke 2, Miinchene SEAS | E Uist \ Geneve __*. —~'@ Satzbur j -'@ Torino ~ ik [I Zia | e | s Montpellier, = ; Be calgarve) — ice a = @ Barcelo: | Malaga © Alicante =
Slide 17: Norwegian now fly from Poland to Europe
Norwegian now fly from Poland to Europe ● New base in Poland from summer 2006 ● 4 new routes from Warsaw to southern Europe 17
Slide 18: Attractive timetable for corporate travellers
Attractive timetable for corporate travellers ● Norwegian offers high frequencies on major domestic routes Legs from/to OSL 30 25 24 22 20 16 15 10 8 5 0 Bergen Trondheim Stavanger Tromsø 18 Legs : From OSL and Return OSL
Slide 19: Largest direct network to Europe
Largest direct network to Europe ● Norwegian has 64 direct routes to major European cities ● Daily departures to 13 European cities ● “First to London” – Norwegian`s morning flight lands at 08.30 International Daily Departures Paris Nice Berlin Alicante Budapest Praha Dusseldorf Riga Copenhagen Stoc
Slide 20: Expectations for 2006
Expectations for 2006 Expected business environment : ● Increased competition on international routes ● Strong price competition on northbound routes ● Seasonal fluctuation on yield ● New “website” and connecting traffic expected to stimulate sales Expected results: ● Q2/Q3 06 total unit cost in the
Slide 21: Thank you, - and fly Norwegian!
Thank you, - and fly Norwegian!
Norwegian Air Shuttle — Q1 2006 Earnings Presentation on 6ix