Finnair I nvestor Presentation November 2012 1 Finnair Investor - - PowerPoint PPT Presentation

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Finnair I nvestor Presentation November 2012 1 Finnair Investor - - PowerPoint PPT Presentation

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Finnair I nvestor Presentation November 2012 1 Finnair Investor Presentation - Nov 2012 Content Company highlights Strategy implementation yielding results Positive trend in business performance strengthens market position

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Finnair Investor Presentation - Nov 2012 1

Finnair I nvestor Presentation

November 2012

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Content

2

  • Company highlights
  • Strategy implementation yielding

results

  • Positive trend in business performance

strengthens market position

  • Outlook
  • Fleet and investments
  • Dedicated and experienced

management team

  • Appendices
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SLIDE 3

Company highlights

  • European network airline connecting Asia and Europe, listed in the Nasdaq OMX Nordic
  • Finnair has an attractive, geographic niche betw een Northern Asia and

Northern Europe w ith sustainable competitive advantage: – Finnair is the 3rd largest carrier in its Asian destinations, estimated market share of 5.9% .* – Market size of 20 million transfer passengers annually, globally one of the fastest growing traffic areas. – Traffic between Europe and China forecasted to triple during the next 30 years.

  • Cost advantage in long haul traffic due to short distance to Asia:

Higher aircraft and crew utilisation compared to peers – Helsinki airport selected one of the best transfer airports in the w orld, minimum connection time of 35 min – The small size of domestic market limits the competition, Finnair benefits from it’s well established position and network coverage with over 60% market share

  • Stable financial position: 402.9 M€ in cash reserves (approximately 18% of annual

turnover), net cash flow positive at 136,8 M€ ytd.

Finnair Investor Presentation - Nov 2012 3

* Based on weekly frequencies.

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Finnair Investor Presentation - Nov 2012 4

Strategy im plem entation yielding results

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Our vision Double our revenue between Europe and Asia by 2020 Become the most desired option in travel between Europe and Asia Become number one airline and grow in the Nordic countries

Finnair Investor Presentation - Nov 2012 5

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SLIDE 6

Finnair offers the fastest connections betw een

  • ver 5 0

European destinations

1 1 Asian m ega-cities

  • Tokyo
  • Nagoya
  • Osaka
  • Beijing
  • Chonqing
  • Shanghai
  • Hongkong
  • Soul
  • Bangkok
  • Singapore
  • Delhi

Finnair Investor Presentation - Nov 2012 6

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SLIDE 7

Sustainable competitive advantage through geographical location

Finnair Investor Presentation - Nov 2012 7

  • Faster connections with more comfort in travelling

– Helsinki-Vantaa hub with minimum connection time of 35 minutes – One long and one short leg instead of two 6-7 hour legs

  • 24h rotation to Asian destinations and back
  • Operating cost advantages in many areas

I t's faster via Helsinki - tim e saved vs. other European hubs

Via Vienna Via Munich Via London Via I stanbul Average tim e saved via Helsinki Beijing – Europe* 22.1% 33.1% 19.1% 16.2% 2 2 .6 % Shanghai – Europe* 26.6% 13.3% 14.5% 11.6% 1 6 .5 % Tokyo – Europe* 34.4% 24.3% 32.3% 31.7% 3 0 .7 % Osaka – Europe* 29.4% 25.4% 27.1% 20.3% 2 5 .6 %

* Finnair operated European non-hub cities.

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Steady grow th in Asian traffic

Finnair Investor Presentation - Nov 2012 8

0% 20% 40% 60% 80% 100% 120% 140% 160%

2005 Q1 2005 Q3 2006 Q1 2006 Q3 2007 Q1 2007 Q3 2008 Q1 2008 Q3 2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3

Finnair is grow ing faster than the m arket in term s of seat capacity

AY seat growth Market seat growth

0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6

2005 2006 2007 2008 2009 2010 2011 1-9 2012

Num ber of passengers grow ing steadily

Million passengers

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SLIDE 9

Asian traffic revenues 51% of total passenger revenue – target to double Asian revenue by 2020*

Finnair Investor Presentation - Nov 2012 9

2005 2006 2007 2008 2009 2010 2011 1-9 2012

Asian traffic revenue annual grow th 2 0 % on average

32% 33% 40% 44% 45%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 2009 2010 2011 1-9 2012

Finnair passenger revenues by traffic area, % , 2 0 0 8 – Jan-Sep 2 0 1 2

Leisure Atlantic Domestic Europe Asia

* From 2010 level.

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Finnair has strong presence in Asian key economies, weekly frequencies*

Finnair Investor Presentation - Nov 2012 10

27 50 34 24 29 Finnair Lufthansa Air France KLM IAG

China Japan Republic of Korea

6 13 7 7 Finnair Lufthansa Air France KLM 24 28 21 16 Finnair Lufthansa Air France KLM 7 12 7 7 Finnair Lufthansa Air France KLM

Singapore

  • * Finnair is the 3 rd largest carrier in its destinations, estimated market share of 5.9% .
  • Market size of 20 million transfer passengers annually, globally one of the fastest growing traffic areas.
  • Traffic between Europe and China forecasted to triple during the next 30 years.
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Structural change advancing

Strategy & Business developm ent

  • Business strategy definition
  • Allocation of resources
  • Network design and markets
  • Fleet structure and size
  • Product & customer experience
  • Brand

Group support functions

  • Realization of synergies
  • Shared Service
  • Financial & business services
  • Procurement
  • IT

Airline feeder traffic and support services

Outsourced to service partners for:

  • Cost efficiency
  • Flexibility
  • Core business grow th support
  • Regional & feeder traffic
  • Catering
  • Engine & component

maintenance

  • Ground handling

1 2 3

Finnair Investor Presentation - Nov 2012 11

– from business segm ents to core business focus and supporting the efficient execution of business strategy and operations

Action taken and/ or on-going:

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SLIDE 12

€140 million savings program w ell on track

new target for 2012 cumulative savings €90 million ( up €10 million from original target) , leaving €50 million for 2013

25% 24% 14% 10% 9% 8% 8% 3%

Target € 1 4 0 m illion

maintenance staff

  • ther

lease sales catering ground handling fuel

1 5 5 % 3 8 % 1 4 8 % 1 0 9 % 1 0 5 % 1 0 2 % 4 3 % 2 6 % 62% 57% 74% 0% 100% fuel ground handling catering sales lease

  • ther

staff maintenance

Savings progress to target

Finnair Investor Presentation - Nov 2012 12

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Achievem ents so far

  • Fleet optimisation in European traffic: €11.5 million

savings

– Discontinuation of four A320 series aircraft lease agreements and subleasing five E170 aircraft – Fleet leasing contracts renegotiated and renewed

  • I mproved route planning and aircraft utilisation

– Low performing routes discontinued, average aircraft utilisation up by over an hour a day to 9 hours

  • Partnerships for improved cost efficiency and flexibility
  • Support functions streamlined
  • Savings through centralized procurement

– Cost savings so far €16 million

Finnair Investor Presentation - Nov 2012 13

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New €60 million savings programme launched

  • New cost savings programme published with the aim of achieving

a permanent reduction in costs of a further €60 million by the end of 2014

– Despite the good advancement of the structural change and cost reduction programme launched in 2011, Finnair has not progressed as planned in all its savings categories – New savings are aim at reaching Finnair’s long-term target of 6% EBIT profit margin – In the face of high fuel prices, intensifying competition and significant fleet investments in the coming years, the company must achieve a marked improvement in profitability.

  • The new programme complements the existing €140 million

structural change and cost reduction programme launched in 2011

Finnair Investor Presentation - Nov 2012 14

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Finnair Investor Presentation - Nov 2012 15

Positive trend in business perform ance strengthens m arket position

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Strong Q3 performance

  • All time high Q3 Turnover and Operational EBI T

– Turnover €650.3 million (+ 7.1% ), EBIT €48.9 million (+ 77.2% )

  • Stable financial position

– Net cash flow from operations €44,5 million in July-September – €402.9 million short-term cash and cash equivalents (approx. 18%

  • f annual turnover)
  • Notable improvements in traffic performance:

– Load factor + 3.9% -p – RASK + 7.8% – Top performance in punctuality, over 90% of flights arrived on time

Finnair Investor Presentation - Nov 2012 16

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Turnover grow th continued w hile

  • perational EBI T improved by 77.2%

Quarterly turnover, € m illion

17 Finnair Investor Presentation - Nov 2012

Quarterly Operational EBI T, € m illion

  • 60
  • 40
  • 20

20 40 60 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 Q1 Q2 Q3 Q4 100 200 300 400 500 600 700 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 Q1 Q2 Q3 Q4

Operational result (EBIT) = EBIT excluding non-recurring items, capital gains and changes in the fair value of derivatives and in the value of foreign currency denominated fleet maintenance reserves

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18

Unit revenue improvement ahead of peers*

Q3 RASK + 7 .8 %

PLF + 3.9% -p RPK yield + 2.3%

Finnair Investor Presentation - Nov 2012

  • Unit revenue per available seat kilom etre ( RASK) up by 7 .8 % in Q3 as both

passenger load factor ( PLF, + 3 .9 % -p) and yield per revenue passenger kilom etre ( RPK yield, + 2 .3 % ) im proved y-o-y

* Other European legacy carriers.

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SLIDE 19

Strong traffic performance in Q3 2012

North Am erica ASK 1 ,3 % RPK 1 ,9 % PLF 0 ,5 % -p Traffic revenue* 8 ,1 % Leisure traffic ASK 2 3 ,6 % RPK 2 9 ,9 % PLF 4 ,5 % -p Traffic revenue* 2 4 ,2 % Europe ASK

  • 0 ,5 %

RPK 9 ,2 % PLF 6 ,9 % -p Traffic revenue* 1 2 ,2 % Total traffic ASK 3 ,4 % RPK 8 ,6 % PLF 3 ,9 % -p Traffic revenue* 1 1 ,0 % Asia ASK 4 ,3 % RPK 6 ,4 % PLF 1 ,6 % -p Traffic revenue* 1 1 ,4 % Dom estic ASK

  • 9 ,5 %

RPK 2 ,6 % PLF 7 ,4 % -p Traffic revenue*

  • 9 ,4 %

Cargo ATK

  • 4 1 ,7 %

RTK

  • 2 6 ,3 %

OLF 1 7 ,0 % -p Traffic revenue

  • 3 0 ,3 %

Asian share 5 2 .3 % of the total capacity

* passenger revenue

19 Finnair Investor Presentation - Nov 2012

5 1 % 3 2 % 5 % 5 % 7 %

Asia Europe Dom estic North Atlatic Charter

Passenger revenue split

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Airline business: RASK & CASK development Q3 2012

7 ,8 % 6 ,1 %

  • 1 ,1 %

2 4 ,6 %

  • 1 ,4 %
  • 9 ,6 %

9 ,5 % 3 ,4 %

  • 6 ,4 %
  • 1 0 ,6 %

1 ,5 %

  • 1 5 %
  • 1 1 %
  • 7 %
  • 3 %

1 % 5 % 9 % 1 3 % 1 7 % 2 1 % 2 5 % RASK, unit revenue CASK, unit cost CASK, excl. Fuel Fuel cost Personnel Depreciation & leasing Traffic charges Maintenance Ground handling Catering Other costs

Change, y-o-y, %

20 Finnair Investor Presentation - Nov 2012

  • Unit revenue per available seat kilom etre ( RASK) up by 7 .8 %
  • Unit cost per available seat kilom etre excluding fuel ( CASK, excl. fuel) dow n

by 1 .1 %

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Operational EBI T build-up in Q3 2012

21 Finnair Investor Presentation - Nov 2012

2 7 ,6 4 8 ,9 1 1 ,0 5 ,8

  • 2 ,4
  • 4 ,6
  • 6 ,1
  • 6 ,2
  • 3 5 ,3

4 9 ,2 1 2 ,7 8 ,6

  • 1 1 ,4

0,0 20,0 40,0 60,0 80,0 100,0 120,0 140,0

M€

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Operational EBI T build-up Jan – Sep 2012

Finnair Investor Presentation - Nov 2012 22

  • 2 9 ,3

3 8 ,6 2 2 ,7 2 0 ,6 1 1 ,0

  • 2 1 ,1
  • 1 8 ,1
  • 1 ,7
  • 9 6 ,3

1 4 7 ,7 1 1 ,1 1 1 ,5

  • 1 9 ,3
  • 50,0

0,0 50,0 100,0 150,0 200,0 250,0

M€

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SLIDE 23

Fuel costs continued to climb in Q3 2012

Operational costs

580,8 621,7 557,2 586,1 584,2 603,5 613,4 500 1000 1500 2000 2500 2 0 1 1 2 0 1 2 Q1 Q2 Q3 Q4

M€

132,8 167,6 131,7 157,9 144,3 179,6 146,4 500 1000 2 0 1 1 2 0 1 2 Q1 Q2 Q3 Q4

M€

2 .3 3 5 .6 5 5 5 .2

+ 3 .3 % + 2 4 .5 %

* Hedging taken into account.

Fuel cost + 2 4 .5 % y-o-y*

  • The share of fuel costs 30%

23 Finnair Investor Presentation - Nov 2012

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Fuel and personnel biggest cost items in

  • perational costs in Q3 2012, total of €603.5 million

Finnair Investor Presentation - Nov 2012 24

Change, y-o-y, %

2 9 ,8 % 1 6 ,2 % 1 0 ,3 % 1 0 ,2 % 8 ,9 % 6 ,1 % 5 ,4 % 4 ,6 % 3 ,1 % 2 ,8 % 2 ,7 %

Fuel Personnel Ground handling and catering Traffic charges Other costs Maintenance Depreciation Other rental payments Sales and marketing Tour operations Aircraft leasing

  • 7,4 %
  • 39,6 %
  • 13,4 %
  • 23,8 %

6,5 % 14,2 %

  • 6,3 %

11,0 % 22,6 %

  • 11,5 %

24,5 % 3,3 %

  • 40%
  • 20%

0% 20% 40% Aircraft leasing Tour operations Sales and marketing Other rental payments Depreciation Maintenance Other costs Traffic charges Ground handling and catering Personnel Fuel Total

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SLIDE 25

Key figures

Key Figures Jul-Sep 2 0 1 2 Jul-Sep 2 0 1 1 Change % Jan-Sep 2 0 1 2 Jan-Sep 2 0 1 1 Change % Jan-Dec 2 0 1 1 Turnover and result Turnover EUR million 650,3 607,2 7,1 1836,5 1680,3 9,3 2 257,7 Operational result, EBIT EUR million 48,9 27,6 77,2 38,6

  • 29,3 > 200 %
  • 60,9

Operational result, % turnover % 7,5 4,5 3,0 % -p 2,1

  • 1,8

3,9 % -p

  • 2,7

Operating result, EBIT EUR million 71,1 10,6 > 200 % 32,8

  • 57,7

156,8

  • 87,8

EBITDAR EUR million 97,8 75,8 29,0 186,9 113,2 65,1 139,6 Result before taxes EUR million 67,3 3,1 > 200 % 15,6

  • 73,3

121,3

  • 111,5

Net result EUR million 50,8 1,9 > 200 % 10,6

  • 54,9

119,3

  • 87,5

Balance sheet and cash flow Equity ratio % 33,3 33,1 0,2 % -p 32,6 Gearing % 25,9 41,9 -16,0 % - p 43,3 Adjusted gearing % 90,1 101,4 -11,3 % - p 108,4 Capital expenditure, CAPEX EUR million 7,4 121

  • 93,9

17,7 182,8

  • 90,3

203,9 Return on capital employed, ROCE 12 months rolling % 1,0

  • 3,4

4,4 % -p

  • 5,2

Return on equity, ROE , 12 months rolling %

  • 1,1
  • 7,5

6,4 % -p

  • 10,9

Net cash flow from operating activities EUR million 44,5

  • 1,2

> 200 % 136,8 59,2 131,1 50,8 Share Share price at end of quarter EUR 2,07 2,94

  • 29,6

2,07 2,94

  • 29,6

2,30 Earnings per share EUR 0,43 0,00

  • 0,08
  • 0,48

116,7

  • 0,75

Finnair Investor Presentation - Nov 2012 25

Operational result (EBIT) = EBIT excluding non-recurring items, capital gains and changes in the fair value of derivatives and in the value of foreign currency denominated fleet maintenance reserves

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Outlook for 2012

Guidance on 26 October 2012:

  • Finnair estimates that the operational result for the second half of the year, which is stronger

than the first half of the year due to seasonal variations, will reflect improved profitability compared to the first half of the year, leading to a profitable operational result for the full year 2012.

  • The outlook for the world economy is still uncertain, and Finnair will adjust its passenger traffic

capacity with its current structure according to demand. Finnair estimates that this capacity will increase on last year but less than 5 per cent. The growth will mainly come from Asian traffic, where Finnair increased capacity in May by opening a new flight route to Chongqing, China.

  • Finnair’s fuel costs are still estimated to be significantly higher in 2012 compared to the

previous year due to increased capacity and high fuel prices.

  • Cost reductions of approximately 90 million euros out of the structural change and cost

reduction program’s total target of 140 million euros are expected to be achieved by the end of

  • 2012. Finnair estimates that unit cost (CASK) excluding fuel will decrease year-on-year in the

second half of the year.

26 Finnair Investor Presentation - Nov 2012

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SLIDE 27

Finnair Investor Presentation - Nov 2012 27

Fleet and investm ents

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SLIDE 28

Distinct production platforms

Finnair Investor Presentation - Nov 2012 28

LONG HAUL Asia & North Am erica SHORT HAUL Feeder traffic, European m ajor routes JV and/ or tactical partnerships possible Feeder traffic, European niche routes Embraer contract flying / * REGI ONAL TRAFFI C Dom estic and som e Nordic routes ATR contract flying / *

* Finnair owns 40% of Flybe Nordic.

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SLIDE 29

Current fleet: Finnair operates 57 aircraft and, in addition, ow ns 15 aircraft operated by other parties

Fleet operated by Seats # Ow n Leased Average Change Ordered Add. Finnair on Sep 3 0 , 2 0 1 2 ( operational ( financial age from Dec

  • ptions

leasing) leasing) 3 1 , 2 0 1 1 European traffic Airbus A319 123–138 9 7 2 11.2

  • 4

Airbus A320 159–165 10 6 4 10.1 Airbus A321 196 6 4 2 11.7 5 Embraer 170* 76 1 1 6.2

  • 4

Embraer 190 100 12 8 4 4.2 Long-haul traffic Airbus A330 297/ 271/ 263 8 4 1 3 2.9 Airbus A340 270/ 269 7 5 2 9.7 Airbus A350 na. 11 8 Leisure traffic Boeing B757 227 4 4 14.7 Total 5 7 3 5 1 9 3 8 .4

  • 8

1 6 8 Fleet ow ned by Finnair Seats # Ow n Leased Average Change Ordered Add. but operated by other ( operational ( financial age from Dec

  • ptions

airlines on Sep 3 0 , 2 0 1 2 * * leasing) leasing) 3 1 , 2 0 1 1 ATR 72 68–72 11 11 3.4 1 Embraer 170 76 4 4 6.3 + 5 Total 1 5 1 5 4 .2

  • 5

1

Finnair Investor Presentation - Nov 2012 29

* E170 aircraft operated by Finnair but leased to Honeywell. ** All ATR aircraft and two E170 aircraft are leased to Flybe Nordic and two E170 aircraft are leased to companies outside the group.

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SLIDE 30

1) First phase in 2008-2010

  • In Long haul, MD11 fleet replaced with Airbus

330/340 1) Second phase in 2012

  • Reducing 9 aircraft from European fleet
  • Embraer traffic transferred to Flybe

1) Third phase in 2013-2014

  • Boeing 757 fleet to be replaced with Airbus

A321 ER’s 1) Fourth phase: Airbus 350 XW B from H2 2015, More capacity and low er seat cost w ith next generation aircraft:

  • Up to 18% more capacity: from 270 seats to

310-320 seats

  • Estimated seat cost -30% compared to Airbus

340

  • Improved revenue position with superior product
  • 11 orders and 8 options

Harmonized Airbus fleet brings asset and crew utilization benefits

Finnair Investor Presentation - Nov 2012 30

Fleet renew al is key for successful strategy implementation – reduced unit costs and improved fuel efficiency

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SLIDE 31

Strong financing position

  • 20

20 40 60 80 100 120 2008 2009 2010 2011 Q3/ 2012 Equity ratio Gearing Adjusted gearing

%

Finnair Investor Presentation - Nov 2012 31

  • 200
  • 100

100 200 300 400 500 600 700 2008 2009 2010 2011 YTD 2012 Net cash flow from operations Investment, gross Short term cash and cash equivalents in balance sheet

M€

Good cash position Strong balance sheet

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SLIDE 32

Finnair Investor Presentation - Nov 2012 32

Dedicated and experienced m anagem ent team

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SLIDE 33

Executive Board – On average, over 13 years of experience from aviation industry

Finnair Investor Presentation - Nov 2012 33

Mika Vehviläinen, b. 1961, M.Sc. (Econ.), Finnair Plc's President and CEO, in Finnair's service since 2010. Vehviläinen previously worked for Nokia, ultimately as Chief Operating Officer of Nokia Siemens Networks. Erno Hildén, b. 1971, M.Sc. (Econ.), CFO, Member of the Executive Board, in Finnair's service since 1997. Hilden's previous posts include VP for Finnair Leisure Flights business unit and various business development posts in Finnair corporate management. Prior to his present position he was Finnair Plc's COO. Ville I ho, b. 1969, M.Sc. (Technology), COO, Member of the Executive Board, in Finnair's service since 1998. Iho previously held various posts in Finnair Plc's Scheduled Traffic. Prior to his present position he was Finnair Plc's SVP Resources Management. Gregory Kaldahl, b. 1957, B.Ss. (Education), SVP Resources Management, Member of the Executive Board, in Finnair's service since 2011. Kaldahl previously worked for several

  • airlines. His latest position was VP, Resource Planning for United Airlines.

Anssi Kom ulainen, b. 1964, BA, SVP Customer Service, Member of the Executive Board, in Finnair's service 1989-1999 and since 2001. Komulainen has worked in various management posts in the restaurant sector as well as in Finnair Catering's service, ultimately as its Managing Director and SVP Catering. His latest position was SVP, Human Resources.

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SLIDE 34

Executive Board – On average, over 13 years of experience from aviation industry

Finnair Investor Presentation - Nov 2012 34

Mika Perho, b. 1959, BA, SVP Commercial Division, Member of the Executive Board, in Finnair's service since 1985. Perho has held management posts in Finnair sales and marketing. Sam i Sarelius, b. 1971, LLM, SVP and General Counsel, Member of the Executive Board, in Finnair's service since 1998. Arja Suom inen, b. 1958, MA, e-MBA, SVP Corporate Communications and Corporate Responsibility, Member of the Executive Board, in Finnair's service since 14 March 2011. Suominen previously worked for Nokia, mainly in mainly in communications positions, ultimately as Nokia's Senior Vice President, Communications. Manne Tiensuu, b. 1970, M Psych, SVP Human Resources, Member of the Executive Board, in Finnair's service since 2010. Tiensuu previously worked for Glaston Oyj and Nokia Oyj. Kaisa Vikkula, b. 1960, D. Sc. (Econ), SVP Travel Services, Member of the Executive Board, in Finnair's service since 2006. Vikkula previously worked in the finance and capital markets, as an investor relations and communications director for Partek Plc and

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SLIDE 35

Finnair Investor Presentation - Nov 2012 35

Appendices

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SLIDE 36

Traffic structure in Q3 2012

51% 32% 5% 5% 7%

Passenger revenue

Asia Europe Domestic North Atlantic Leisure

Finnair Investor Presentation - Nov 2012 36

52% 30% 3% 7% 8%

Traffic capacity in Available Seat Kilom eters ( ASK)

Asia Europe Domestic North Atlantic Leisure

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SLIDE 37

Finnair’s ow nership

Governm ent ow nership 5 5 .8 % , other m ajor shareholders

  • incl. financial and insurance corporations

69.9% 9.8% 12.2% 4.7% 2.9% 0.7% 0.0%

Ow nership by type

Public bodies Households Financial institutions Foreign ownership Private companies Non-profit institutions Not converted to book-entry system

Finnair Investor Presentation - Nov 2012 37

LARGEST SHAREHOLDERS 2 5 OCT 2 0 1 2 # Shares

  • f shares

and votes 1 Finnish State 71,515,426 55.8% 2 KEVA (Local Government Pensions Institution ) 5,881,815 4.6% 3 Skagen funds 5,720,889 4.5% 4 Ilmarinen Mutual Pension Insurance Company 3,025,564 2.4% 5 Tapiola General Mutual Insurance Company 2,276,444 1.8% 6 The State Pension Fund 2,100,000 1.6% 7 Veritas Pension Insurance 1,530,000 1.2% 8 OP-Suomi Arvo (equity fund) 1,400,000 1.1% 9 Mutual Insurance Company Pension Fennia 1,300,000 1.0% 10 Alfred Berg Finland (equity fund) 1,287,434 1.0% 11 Suomi Mutual Life Assurance Company 1,250,000 1.0% 12 Varma Mutual Pension Insurance Company 600,000 0.5% 13 Finnair Personnel Fund 562,711 0.4% 14 Evli Suomi Select (equity fund) 532,169 0.4% 15 Mandatum Life Insurance Company Limited 505,683 0.4% Total 1 5 largest 9 9 ,4 8 8 ,1 3 5 7 7 .6 % Other shareholders 28,647,980 22.4% Total num ber of shares and votes 1 2 8 ,1 3 6 ,1 1 5 1 0 0 .0 %

  • Nominee registered shareholders hold 6.7% of company shares.
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SLIDE 38

Rolling hedging policy

Finnair Investor Presentation - Nov 2012 38

Hedging positions, 3 0 Septem ber 2 0 1 2 Hedge ratio H1 2 0 1 3 : 6 9 %

  • Finnair hedges jet fuel

positions 24 months ahead within the limits defined in the hedging policy

  • Finnair is 74% hedged for

the next six months

  • The company protects itself

against the risks of currency, interest rate and jet fuel positions by using different derivative instruments, such as forward contracts, swaps and options