Norwegian Air Shuttle ASA Q3 2013 Presentation Europes best - - PowerPoint PPT Presentation

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Norwegian Air Shuttle ASA Q3 2013 Presentation Europes best - - PowerPoint PPT Presentation

Apr 02, 2023 137 likes •386 views

Norwegian Air Shuttle ASA Q3 2013 Presentation Europes best low-cost airline Europes best Double digit revenue growth in Q3 low-cost airline Group revenues of MNOK 4,878 in Q3 2013 + 15 % 5 000 4 500 4 000 3 500 3 000

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Europe’s best low-cost airline

Norwegian Air Shuttle ASA

Q3 2013 Presentation

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Europe’s best low-cost airline

  • Group revenues of MNOK 4,878 in Q3 2013

Double digit revenue growth in Q3

Revenues 2 828 3 376 4 224 4 878 Domestic revenue 992 958 1 071 1 072 % y.o.y. chg

27 %

  • 3 %

12 % 0 %

International revenue 1 836 2 419 3 153 3 806 % y.o.y. chg

23 % 32 % 30 % 21 %

500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 500 5 000

Q3 10 Q3 11 Q3 12 Q3 13

MNOK

Domestic Revenue (MNOK) International Revenue (MNOK) Total Revenues (MNOK)

+ 15 %

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SLIDE 3

Europe’s best low-cost airline

Q3 13 Q3 12 EBITDAR MNOK 1 169 1 098 EBITDA MNOK 778 822 EBIT MNOK 638 708 Pre-tax profit (EBT) MNOK 604 873 Net profit MNOK 436 628

Pre-tax profit of MNOK 604 in Q3

Q3 10 Q3 11 Q3 12 Q3 13 Q3 10 Q3 11 Q3 12 Q3 13 EBITDAR margin 30 % 36 % 26 % 24 % EBT margin 26 % 20 % 21 % 12 % 840 1 206 1 098 1 169

100 200 300 400 500 600 700 800 900 1 000 1 100 1 200 1 300 MNOK

733 686 873 604

100 200 300 400 500 600 700 800 900 MNOK

EBT development Q3 EBITDAR development Q3

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Europe’s best low-cost airline

  • Estimated long-haul wet-lease, fuel & irregularity effects MNOK 101

– Planned wet-lease MNOK 64 – Increased fuel consumption A340 vs B788 MNOK 19 – IRR cost MNOK 18

  • Start-up costs Long-Haul, LGW & ALC unadjusted for (business as usual)

Underlying EBT result MNOK 932

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Europe’s best low-cost airline

Extraordinary summer weather affected late bookings

Väderöarna, Bohuslän in Western Sweden, August 23rd 2013

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Share of available seats sold on typical leisure routes from the Nordics (avg. for departure during the month of July) Pre-sale period Departure

Fw d. Bookings (%) 2012 2013

15 17 19 21 23 25

  • Avg. daily max temperature

(°C) preceding week (Oslo) - average for departures in July

2013 2012

1 2 3 4 5 6 7

  • Avg. daily precipitation (mm)

preceding week (Oslo) - average for departures in July

2013 2012

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Europe’s best low-cost airline

Ancillary revenue remains a significant contributor

  • Ancillary revenue comprises 11 % of Q3 revenues (target 15%)
  • NOK 90 per scheduled passenger (an increase of 5 % from last year)

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Europe’s best low-cost airline

Cash position of NOK 2.3 billion (+568 million)

Cash flows from operations in Q3 13 Cash flows from investing activities in Q3 13 Cash flows from financing activities in Q3 13 Cash and cash equivalents at period-end MNOK 2 303 MNOK -68 MNOK -618 MNOK 67

(MNOK 460) (MNOK -565) (MNOK 267) (MNOK 1735)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

Unaudited Q3 Q3 YTD YTD Full Year (Amounts in NOK million ) 2013 2012 2013 2012 2012 Net cash flows from operating activities 67.4 459.7 2 113.4 1 575.1 2 021.6 Net cash flows from investing activities

  • 617.9
  • 564.9
  • 1 161.4
  • 1 220.1
  • 2 765.5

Net cash flows from financial activities

  • 67.9

267.4

  • 378.2

276.1 1 369.4 Foreign exchange effect on cash

  • 1.7
  • 1.8
  • 1.9
  • 1.3

0.3 Net change in cash and cash equivalents

  • 620.1

160.4 571.9 629.8 625.8 Cash and cash equivalents in beginning of period 2 922.9 1 574.4 1 730.9 1 104.9 1 104.9 Cash and cash equivalents in end of period 2 302.9 1 734.8 2 302.9 1 734.8 1 730.9

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Europe’s best low-cost airline

Equity improved by MNOK 561 compared to last year

  • Total balance of NOK 14.4 billion
  • Net interest bearing debt NOK 3.4 billion (2.7)
  • Equity of NOK 2.9 billion at the end of the third quarter
  • Group equity ratio of 20 % (22 %)

1 735 Cash 2 303 1 562 Receivables 2 047 7 611 Non-current assets 10 011

2 000 4 000 6 000 8 000 10 000 12 000 14 000 Q3 12 Q3 13

MNOK

Equity 2 940 2 379 Pre-sold tickets 2 530 1 763 Other current liabilities 3 505 2 312 Long term liabilities 5 386 4 454

Q3 13 Q3 12

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Europe’s best low-cost airline

High load factor maintained on 31 % capacity growth

  • Average flying distance up 11 %

ASK 683 1 033 1 694 2 333 3 590 3 979 5 331 6 480 7 780 10 223 Load Factor 68.5 % 86.4 % 84.7 % 86.1 % 81.8 % 82.2 % 80.5 % 84.4 % 82.6 % 81.4 % 68.5 % 86.4 % 84.7 % 86.1 % 81.8 % 82.2 % 80.5 % 84.4 % 82.6 % 81.4 %

0.2 0.4 0.6 0.8 1 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000 11 000

Q3 04 Q3 05 Q3 06 Q3 07 Q3 08 Q3 09 Q3 10 Q3 11 Q3 12 Q3 13

Load Factor Available Seat KM (ASK)

ASK Load Factor

+ 31 %

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Europe’s best low-cost airline

Passenger record in Q3

  • 6.0 million passengers
  • An increase of 800,000 passengers

Pax (mill) 0.5 0.9 1.5 2.0 2.6 3.1 3.8 4.6 5.2 6.0

0.00 1.00 2.00 3.00 4.00 5.00 6.00

Q3 04 Q3 05 Q3 06 Q3 07 Q3 08 Q3 09 Q3 10 Q3 11 Q3 12 Q3 13

Passengers (million)

+16 %

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Europe’s best low-cost airline

Highest growth at London Gatwick

Marketshare Oslo Airport (OSL) Marketshare Stockholm Airport (ARN) Marketshare Copenhagen Airport (CPH) Marketshare Helsinki Airport (HEL) Marketshare Int'l Gatwick Airport (LGW) Marketshare Int'l Spanish bases (AGP, LPA, ALC) Q3 08 29 % 10 % 2 % 0 % 0 % 2 % Q3 09 35 % 12 % 8 % 0 % 2 % 3 % Q3 10 39 % 14 % 10 % 2 % 3 % 3 % Q3 11 38 % 19 % 11 % 8 % 4 % 4 % Q3 12 37 % 21 % 15 % 10 % 4 % 5 % Q3 13 39 % 23 % 17 % 12 % 6 % 6 % 0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 %

+ 231,000 pax + 212,000 pax + 131,000 pax + 119,000 pax + 243,000 pax + 149,000 pax

  • Increasing market share in all Nordic markets
  • Norwegian accounted for 90 % of growth at London Gatwick

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Gatwick total market: +271,000 Norwegian at Gatwick: +243,000

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Europe’s best low-cost airline

Unit cost excluding fuel down 3 %

  • Underlying unit cost down 7 %

–

  • Excl. fuel hedge, EUR & USD effect MNOK 65

–

  • Excl. Long-Haul wet lease, fuel & IRR costs MNOK 101

Cost per ASK (CASK) (NOK) CASK ex. fuel 0.29 0.41 0.40 0.27 0.41 0.27 0.41 0.28

0.29 0.27 0.28 0.27

0.11 0.14 0.15 0.13 0.25 0.30 0.35 0.40 Q3 10 Q3 11 Q3 12 Q3 13

Operating cost EBITDA level per ASK (CASK)

Fuel share of CASK CASK excl fuel

  • 3%
  • 3%

Other losses / (gains) is not included in the CASK concept as it primarily contains hedge gains/losses offset under financial items* as well as other non-operational income and/or cost items such as gains on the sale of spare part inventory amd unrealized foreign currency effects on receivables/payables and (hedges of operational expenses). *Norwegian hedges USD/NOK to counter foreign currency risk exposure on USD denominated borrowings translated to the prevailing currency rate at each balance sheet date. Hedge gains and losses are according to IFRS recognized under operating expenses (other losses/ (gains) while foreign currency gains and losses from translation of USD denominated borrowings are recognized under financial items.

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Europe’s best low-cost airline

  • Uniform fleet of Boeing 737-800s
  • Overheads
  • 3 new 737-800 delivered in Q3 (13 y.o.y.)

Aiming for FY CASK NOK 0.25 excluding fuel

  • Flying cost of 737-800 lower than 737-300
  • 737-800 has 38 “free” seats
  • Unchanged unit fuel consumption in Q3 due

to A340-300 wet lease

Scale economies New more efficient aircraft Growth adapted to int’l markets Crew and aircraft utilization Optimized average stage length Automation

  • Fixed costs divided by more ASKs
  • Frequency based costs divided by more ASKs
  • Q3 sector length up by 11 %
  • Cost level adapted to local markets
  • Outsourcing/ Off-shoring
  • Rostering and aircraft slings optimized
  • Q3 utilization of 12.2 BLH pr a/c (+0.3 BLH)
  • Self check-in/ bag drop
  • Automated charter & group bookings
  • Streamlined operative systems & processes

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Europe’s best low-cost airline d BGO OSL HEL TRF LONDON (Gatwick) AES TOS GOT AAL SVG ARN CPH TRD DBV SPU NCE IBZ BCN PMI ALC AGP FAO FUE TFS FCO ACE LPA BUD CFU JTR CTA LCA LAX FLL JFK In operation Capacity increase New S14

London:

Growth on short-haul & adding long-haul

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Europe’s best low-cost airline

  • JFK with most departures in Norwegian’s long-haul network
  • 15 weekly roundtrips from NYC to Europe from summer 14

New crew bases in New York and Florida

15 OAK

San Francisco

LAX

Los Angeles

FLL

  • Ft. Lauderdale

MCO

Orlando

BKK

Bangkok

ARN

Stockholm

OSL

Oslo

CPH

Copenhagen

JFK

New York

LGW

London

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Europe’s best low-cost airline

Competitors are national airlines flying internationally

“Other European Companies” have a very different business model

«Other European companies are capable of coping without creating this kind of creative corporate structures»

Petter Førde, Chairman, Norwegian Pilots Association

Majority of members fly for SAS and other competitors (Mr. Førde flies for Widerøe)

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Europe’s best low-cost airline 1

3W

3 BGO TRD 13 +2 5 +1 15 +2 SVG HAU KRS AES MOL 4 +1 ANX EVE TOS BDU +1 5 6 +1 ALF KKN LYR +1 2 BOO OSL TRF +2 15 1 S 5 2 3 2 S LKL 4

Improved product in all Scandinavian domestic markets

6 +1 4 S 6 5 ARN GOT MMX UME LLA KRN VBY 1 +1 Route with more departures S14 vs S13 Route with no change S14 vs S13 New daily number of departures Change from S13 to S14 Weekly number of departures Seasonal

15 +2 3W S

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Europe’s best low-cost airline

Current committed fleet plan

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Deliveries 787-8 +1,164 seats 2014: Deliveries 737-800 +2,046 seats Re-deliveries 737-300

  • 592 seats
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Europe’s best low-cost airline

  • Wet leased aircraft with 50 % higher fuel consumption per seat
  • MNOK 80 in savings - per airplane - per year

Dreamliner saves 40 tons of fuel roundtrip Bangkok

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Europe’s best low-cost airline

  • Business environment

– Economic uncertainty in parts of Europe – Seasonal fluctuations – Yield pressure from capacity investment

  • Production

– The company expects a production growth (ASK) of 32% (Previously “in excess of 30%”)

  • Increasing the fleet by adding 737-800’s
  • Utilization and distance increase short-haul driven by UK and Spanish bases
  • Launch of long-haul operations

– Capacity deployment depending on development in the overall economy and marketplace

  • Cost development

– Unit cost expected in the area of 0.42

  • Excluding hedged volumes
  • Fuel price dependent – USD 950 pr. ton
  • Currency dependent – USD/NOK 5.75
  • Production dependent
  • Based on the currently planned route portfolio

Expectations for 2013 (Group)

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Europe’s best low-cost airline

  • The company expects a production growth (ASK) of 40 %

– Utilization and distance increase driven by UK and Spanish bases and long-haul – Continuous optimization of the route portfolio

  • Unit cost target in the area 0.40

– Fuel price dependent – USD 950 per ton – Currency dependent ● USD/NOK 6.00 ● EUR/NOK 7.75 ● – CASK 2014 target approximately 0.385 on 2013 fuel & ccy assumptions – Production dependent – Based on the current route portfolio

Expectations for 2014 (Group)

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From bases in NORWAY From bases in SWEDEN

DENMARK FINLAND

From the UK base From bases in SPAIN From bases in the USA & THAILAND

Norwegian offers 401 scheduled routes to 124 destinations in 38 countries

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Europe’s best low-cost airline

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