Norwegian Air Shuttle Asa · OSL:NAS

Norwegian Air Shuttle Asa — Q2 2016 Earnings Presentation

27 slides from Norwegian Air Shuttle Asa's earnings presentation, Jul 14, 2016

  1. Slide 1: Norwegian Air Shuttle ASA Q2 2016 Presentation

    Norwegian Air Shuttle ASA Q2 2016 Presentation 14 July 2016

  2. Slide 2: Highlights Q2 2016

    Highlights Q2 2016 SkyTrax awards 2016 for: World’s Best Low-Cost Long Haul Airline (2nd time) and Europe’s Best Low-Cost Airline (4th in a row) New base at Palma de Mallorca, the 16th in Europe and 20th overall Added ten new 737-800 aircraft and two 787- 9 Dreamliners in first half 2016 (five 737 a

  3. Slide 3: 7.7 million passengers in Q2 2016 (+11 %)

    7.7 million passengers in Q2 2016 (+11 %) 9 + 11 % 8 7 6 5 4 3 Passengers (million) 2 1 0 Q2 07 Q2 08 Q2 09 Q2 10 Q2 11 Q2 12 Q2 13 Q2 14 Q2 15 Q2 16 Pax (mill) 1,6 2,3 2,8 3,2 4,0 4,5 5,5 6,4 7,0 7,7 3

  4. Slide 4: Available Seat KM (ASK) and load factor

    Q2 load factor up to 88 % (+3 pp.) 12 % growth in capacity (ASK) 16 % growth in traffic (RPK) Average flying distance increased by 3 % Load 18 000 ASK Load Factor 100% +2.6 p.p. 17 000 87,8 % 16 000 85,2 % 90% 15 000 79,4 % 78,4 % 78,3 % 78,3 % 79,6 % 76,5 % 76,9 % 80% 75,4 % 14 000 13 000 70% 12 00

  5. Slide 5: Stable market shares in all key airports (12m rolling)

    Stable market shares in all key airports (12m rolling) 12 000 000 + 943,000 pax 42 % mkt share 10 000 000 8 000 000 + 876,000 pax + 1,135,000 pax 4 % mkt share 6 000 000 22 % mkt share + 192,000 pax 17 % mkt share + 509,000 pax 10 % mkt share 4 000 000 + 173,000 pax 12 % mkt share 2 000 000 0 Oslo A

  6. Slide 6: 13 % revenue growth in Q2

    13 % revenue growth in Q2 14 % growth in international revenue, + 9 % for domestic Scandinavia Flat unit revenue (RASK). RASK in constant currency fell 4 % 3 p.p. higher load offset by 3 % lower yield and 3 % increased stage length 7 000 + 13 % 6 000 5 000 Domestic revenue 4 000 International revenu

  7. Slide 7: 18 % growth in total ancillary revenue in Q2

    18 % growth in total ancillary revenue in Q2 15 % share of Group revenue Per passenger sales increased by 6 % to NOK 131 NOK 131 NOK 123 Flexibility/ modifications Flexibility/ modifications Pre-sold Pre-sold packages packages (bundle) (bundle) Optional extras Seating Seating Baggage Baggage Other A

  8. Slide 8: Continued strong growth in the US and Spain

    Continued strong growth in the US and Spain 6 % growth in Scandinavia, stronger in Sweden and Denmark Norway: 33 % of passengers (down from 35 % in Q1 2016) Over 40 % of passengers booking from outside Scandinavia Growth in number of passengers: Passengers by origin: USA Hungary Other Italy Poland S

  9. Slide 9: New base in Palma: a total seven bases in Spain

    New base in Palma: a total seven bases in Spain 9

  10. Slide 10: New charter agreement for the US market

    New charter agreement for the US market Utilize capacity better in the European low season Three aircraft for winter 2016/17 Agreement with Apple Vacations and Funjet, two leading US tour operators Flights from Chicago/Rockford and Milwaukee More than 600 flights to multiple destinations in Mexico,

  11. Slide 11: Growing long-haul in Europe and to/from USA

    Growing long-haul in Europe and to/from USA 11

  12. Slide 12: Scaling up the widebody fleet to 32 by 2018

    Scaling up the widebody fleet to 32 by 2018 Widebody aircraft Deliveries 787-8 Deliveries 787-9 (delivered and firm orders) (291 seats) (344 seats) 2013 2014 2015 2016 2017 2018 Aircraft 3 7 8 12 21 32 Seats 873 2 037 2 328 3 704 6 800 10 584 12

  13. Slide 13: Convert part of Airbus order to A321neo LR

    Convert part of Airbus order to A321neo LR Original order of 100 Airbus 320neo’s for delivery in 2016-2021 30 of these orders will be converted to the bigger A321neo LR The A321neo LR will be operated by Norwegian Delivery schedule: 2019: 8 aircraft 2020: 11 aircraft 2021: 11 aircraft 13

  14. Slide 14: Advantage of the A321neo LR vs. A320neo

    Advantage of the A321neo LR vs. A320neo 3000 nm +40 180 A320neo +500 pax 220 A321LR nm 3500 nm 40 more seats compared A321LR extended to an A320neo range with ACTs +15% - 40% Vs Widebody Vs A320neo Vs Widebody Vs A320neo - 15 % A321LR - 5% Cost trip Cost per seat savings compared - 40% - 15% savings

  15. Slide 15: «Short long-haul» 500 nm wider range than A320neo

    «Short long-haul» 500 nm wider range than A320neo (+17 %) Source: Airbus 15

  16. Slide 16: Top modern fleet with an average age of 3.6 years

    Top modern fleet with an average age of 3.6 years Deliveries 787-9 Deliveries 737-800 Re-deliveries 737-800 2016: +1376 seats +3,162 seats -744 seats 159 160 B788/B789 Owned 12 144 B788/B789 Leased 140 7 B737 MAX 8 owned 20 14 B738 owned 120 116 6 12 B738 S&LB 3 9 B738 leased 99 100 95 3 B733 owned

  17. Slide 17: Operating cost EBITDA level per ASK (CASK) comparison

    Unit cost comparison based on the latest full-year results (in NOK) 0,90 0,80 0,82 0,77 0,70 0,67 0,60 0,60 0,50 0,54 Operating cost EBITDA level per ASK (CASK) 0,51 0,40 0,42 0,30 0,29 0,27 0,20 0,10 - Sources: Based on official full-year 2015 annual report for Norwegian Air Shuttle, Finnair, Vueli

  18. Slide 18: Financials

    Financials 18

  19. Slide 19: EBT improved to NOK 0.9 billion in Q2

    EBT improved to NOK 0.9 billion in Q2 (NOK million) Q2 15 Q2 16 Change Revenue 5 861 6 632 EBITDAR 1 285 1 965 681 EBITDA 765 1 324 559 Pre-tax profit (EBT) 456 930 474 Net profit 325 745 EBITDAR development Q2 EBT development Q2 2 500 1 000 930 2 000 750 1 965 1 500 500 NOK million 456 NOK million

  20. Slide 20: Underlying EBITDA increased to NOK 1 billion

    Underlying EBITDA* increased to NOK 1 billion NOK million Q2 2015 Q2 2016 chg Revenue 5 861 6 632 771 EBITDA as reported 765 1 324 559 Other losses/gains 100 460 360 EBITDA excl other losses/gains 665 864 199 Non-recurring items: - Additional mainenance exp. engine overhaul -84 - - passenger compens

  21. Slide 21: Operating cost EBITDA level per ASK (CASK)

    Unit cost cut by 1 % to NOK 0.40 CASK ex fuel +7 % to NOK 0.31 (fuel cost per ASK -23 %) 4 % negative impact of currency 0,55 CASK excl fuel 0,50 Fuel share of CASK 0,12 0,45 0,18 0.15 0,12 0,40 0,15 0,15 Operating cost EBITDA level per ASK (CASK) 0,35 0,14 0,09 0,14 0,11 0,30 0,25 0,20 0,38 0,35 0,

  22. Slide 22: Full impact of lower fuel cost, fuel unit cost -23%

    Full impact of lower fuel cost, fuel unit cost -23% 0,16 Sales/ distrib. 2% Depr. 0,14 4% Fuel 19 % Other Flight ops. exp. 4% 0,12 Gen. and Fuel adm. exp. 5% Personnel 0,10 Technical 14 % 6% 0,08 Leasing Personnel 10 % Airport & ATC Handling 13 % Airport/ATC 0,06 12 % Handling Leasing 0,04 Other Tec

  23. Slide 23: NOK 3.2bn cash-flow from operations in first half

    NOK 3.2bn cash-flow from operations in first half Invested a net NOK 2 bn in new aircraft of which NOK 1.2 financed by own cash A strong NOK 600m increase in pre-sold tickets in first half compared to 2015 NOK 3 billion in cash at the end of Q2 Q2 Q2 H1 H1 NOK million 2015 2016 Chg 2015 2016 Chg Pro

  24. Slide 24: Improving equity ratio in spite of adding on-balance aircraft

    Improving equity ratio in spite of adding 16 on-balance aircraft Added sixteen new 737-800 on balance the last 12 months + PDP’s NOK 17 bn net debt (NOK 16 bn in Q1) Equity increased by NOK 580m (8 % equity ratio, 13 % incl. mv of Bank Norwegian) 36 000 33 000 30 000 Aircraft 27 000 Financing Aircra

  25. Slide 25: Outlook for 2016

    Outlook for 2016 Markets and business Soft macro and passenger tax introduced in Norway Monitoring demand in the UK post Brexit, limited changes to bookings Bookings on par with last year, capacity adjusted An estimated production growth (ASK) of 18 % (unchanged) Short-haul + 12 %, Long-haul + 40 %

  26. Slide 26: Summary

    Summary Stable markets and good momentum on bookings US Charter contracts and launched winter routes to the French Caribbean, Mexico, Jamaica and Dominican Republic Converted 30 Airbus Neo orders to A321’s Passengers voted Norwegian best in SkyTrax awards for 2016 Financing on-track Limited immediat

  27. Slide 27: Norwegian operates 450 routes to 140 destinations

    Norwegian operates 450 routes to 140 destinations From bases in SWEDEN DENMARK From bases in the FINLAND USA & THAILAND From bases in From the From bases in SPAIN UK base NORWAY 27

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