Norwegian Air Shuttle ASA Q4 2013 Presentation Europes best - - PowerPoint PPT Presentation

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Norwegian Air Shuttle ASA Q4 2013 Presentation Europes best - - PowerPoint PPT Presentation

Nov 15, 2022 43 likes •285 views

Norwegian Air Shuttle ASA Q4 2013 Presentation Europes best low-cost airline Europes best low-cost airline Double digit revenue growth in Q4 Group revenues of MNOK 3,786 in Q4 2013 + 22 % 3 500 3 000 2 500 Domestic Revenue

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Europe’s best low-cost airline

Norwegian Air Shuttle ASA

Q4 2013 Presentation

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Europe’s best low-cost airline

  • Group revenues of MNOK 3,786 in Q4 2013

Double digit revenue growth in Q4

Revenues 2 146 2 536 3 106 3 786 Domestic revenue 848 947 1 097 1 116 % y.o.y. chg

5 % 12 % 16 % 2 %

International revenue 1 297 1 589 2 008 2 670 % y.o.y. chg

37 % 22 % 26 % 33 %

500 1 000 1 500 2 000 2 500 3 000 3 500

Q4 10 Q4 11 Q4 12 Q4 13

MNOK

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

+ 22 %

2

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Europe’s best low-cost airline

Q4 13 Q4 12 EBITDAR MNOK 299 296 EBITDA MNOK

  • 41

53 EBIT MNOK

  • 183
  • 52

Pre-tax profit (EBT) MNOK

  • 283

23 Net profit MNOK

  • 197

24

Q4 influenced by price stimulation & currency

Q4 10 Q4 11 Q4 12 Q4 13 Q4 10 Q4 11 Q4 12 Q4 13 EBITDAR margin 10 % 9 % 10 % 8 % EBT margin

  • 1 %
  • 7 %

1 %

  • 7 %

214 216 296 299

100 200 300 MNOK

  • 27
  • 188

23

  • 283
  • 450
  • 350
  • 250
  • 150
  • 50

50 MNOK

EBT development Q4 EBITDAR development Q4

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Europe’s best low-cost airline

Revenue growth of 2.7 billion in 2013

  • Annual turnover MNOK 15,580

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Revenues 8 598 10 532 12 859 15 580 Domestic revenue 3 316 3 667 4 057 4 423 % y.o.y. chg

14 % 11 % 11 % 9 %

International revenue 5 282 6 865 8 802 11 157 % y.o.y. chg

20 % 30 % 28 % 27 %

2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000

2010 2011 2012 2013

MNOK

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

+ 21 %

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Europe’s best low-cost airline

2013 2012

EBITDAR MNOK 2 784

1 822

EBITDA MNOK 1 500

789

EBIT MNOK 970

403

Pre-tax profit (EBT) MNOK 437

623

Net profit MNOK 319

457 2010 2011 2012 2013 2010 2011 2012 2013 EBITDAR margin 14 % 15 % 14 % 18 % EBT margin 3 % 2 % 5 % 3 % 243 166 623 437

100 200 300 400 500 600 MNOK

1 175 1 540 1 822 2 784

400 800 1 200 1 600 2 000 2 400 2 800 MNOK

Pre-tax profit of MNOK 437 in 2013

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EBT development (full year) EBITDAR development (full year)

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Europe’s best low-cost airline

  • Reversal of pension provisions (Group defined benefit pension plan ended)
  • Estimated long-haul earnings effect MNOK 216

– Q2 low utilization & staff training – Extra costs due to wet-lease Q2, Q3 & Q4 – Irregularity costs Q3 & Q4

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

2013 underlying EBT result MNOK 731

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Europe’s best low-cost airline

Ancillary revenue remains a significant contributor

  • Ancillary revenue comprises 11 % of 2013 revenues (target 15%)
  • NOK 87 per scheduled passenger (an increase of 6 % from last year)

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Europe’s best low-cost airline

2013 Positive Free Cash Flow despite 2.1 billion investments

Cash flows from operations in Q4 13 Cash flows from investing activities in Q4 13 Cash flows from financing activities in Q4 13 Cash and cash equivalents at period-end

(MNOK 1731)

MNOK 2 166 MNOK 563 MNOK -965 MNOK 264

(MNOK 447) (MNOK -1545) (MNOK 1093)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

Unaudited Q4 Q4 YTD YTD Full Year (Amounts in NOK million ) 2013 2012 2013 2012 2012 Net cash flows from operating activities 263.5 446.5 2 376.7 2 021.5 2 021.5 Net cash flows from investing activities

  • 964.5
  • 1 545.4
  • 2 125.9
  • 2 765.5
  • 2 765.5

Net cash flows from financial activities 562.3 1 093.3 184.1 1 369.4 1 369.4 Foreign exchange effect on cash 1.9 1.6 0.0 0.3 0.3 Net change in cash and cash equivalents

  • 136.8
  • 4.0

434.9 625.7 625.7 Cash and cash equivalents in beginning of period 2 302.9 1 734.8 1 730.9 1 104.9 1 104.9 Cash and cash equivalents in end of period 2 166.1 1 730.9 2 166.1 1 730.9 1 730.9

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Full year

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Europe’s best low-cost airline

Equity improved by MNOK 326 compared to last year

  • Total balance of NOK 14.8 billion
  • Net interest bearing debt NOK 4.3 billion (3.0)
  • Equity of NOK 2.7 billion at the end of the fourth quarter
  • Group equity ratio of 19 % (20 %)

1 731 Cash 2 166 1 176 Receivables 1 746 9 013 Non-current assets 10 848

2 000 4 000 6 000 8 000 10 000 12 000 14 000 Q4 12 Q4 13

MNOK

Equity 2 747 2 421 Pre-sold tickets 2 567 1 740 Other current liabilities 2 663 3 106 Long term liabilities 6 783 4 654

Q4 13 Q4 12

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Europe’s best low-cost airline

Long-term financing 2014 on track

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  • Planned external financing 2014:

MNOK +/- 3,000

– Committed / arranged financing: MNOK 1,700 – EETC, JOLCO & guaranteed export financing

  • Year-end 2013 PDP balance:

MNOK 2,550

– 94 % paid with own funds

  • Year-end 2014 debt increase:

MNOK +/- 2,200

(long-term debt, net of amortization)

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Europe’s best low-cost airline ASK 1 149 2 302 3 464 5 370 7 560 11 530 13 555 17 804 21 957 25 920 34 318 Load Factor 62.5 % 66.8 % 78.0 % 78.6 % 80.1 % 78.7 % 78.2 % 77.4 % 79.3 % 78.5 % 78.3 % 62.5 % 66.8 % 78.0 % 78.6 % 80.1 % 78.7 % 78.2 % 77.4 % 79.3 % 78.5 % 78.3 %

0.2 0.4 0.6 0.8 1 5 000 10 000 15 000 20 000 25 000 30 000 35 000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Load Factor Available Seat KM (ASK)

ASK Load Factor

+ 32 %

Traffic growth of 32% in 2013

  • Stable load despite high growth
  • Average flying distance up 11 %

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Europe’s best low-cost airline Pax (mill) 1.2 2.1 3.3 5.1 6.9 9.1 10.8 13.0 15.7 17.7 20.7

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Passengers (million)

+17 %

20.7 million passengers in 2013

  • An increase of 3,000,000 passengers

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Europe’s best low-cost airline

  • Business model works – lower costs and prices attract volume

Strong demand:

Growing market share in all markets

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, TFS) Q4 08 33 % 9 % 3 % 0 % 1 % 2 % Q4 09 37 % 10 % 10 % 0 % 3 % 3 % Q4 10 38 % 14 % 11 % 2 % 5 % 4 % Q4 11 37 % 19 % 12 % 8 % 6 % 5 % Q4 12 38 % 19 % 15 % 10 % 6 % 7 % Q4 13 41 % 23 % 16 % 12 % 10 % 8 % 0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 %

+ 243,000 pax + 247,000 pax + 101,000 pax + 113,000 pax + 221,000 pax + 202,000 pax

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Europe’s best low-cost airline

Lowest cost always wins

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  • Cost per available seat kilometer is an industry-wide cost level indicator often referred to as “CASK”. Usually represented as operating expenses before depreciation and amortization (EBITDA level) over produced seat kilometers (ASK).
  • Foreign exchange rates used are equivalent to the daily average rates corresponding to the reporting periods and as stated by the Central Bank of Norway
  • Note: For some carriers the available financial data represents Group level data which may include cost items from activities that are unrelated to airline operations.
  • 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 and unrealized foreign currency effects on receivables/payables and (hedges of
  • perational 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. Sources: Norwegian Q4 2013 report (period displayed January 2013 – December 2014), SAS Group Year-end report November 2012 - October 2013 (period displayed November 2012 – October 2013, Scandinavian Airlines (SK) only), Finnair Plc. Annual Report 2012 and Finnair Group Financial Statements Bulletin 2013, Ryanair Annual Report 2013, easyJet 2013 full year results statement and Annual Report 2013 (period displayed October 2012 – September 2013), Air Berlin Annual Report 2012, Vueling Results Presentation FY’12 and Q4’12 and Norwegian’s estimations. 12 mths: Quarterly reports 2012 & 2013 and Annual Report 2013. Unit cost presented on a 12 month rolling basis for Scandinavian Airlines only (excl. Widerøe and Parent Company costs, non-recurring items as reported by company excluded. Charter ASK based on estimations as it is not reported publicly)

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Europe’s best low-cost airline

Cost per ASK (CASK) (NOK) CASK ex. fuel 0.36 0.47 0.42 0.28 0.45 0.33 0.48 0.30

0.36 0.33 0.30 0.28

0.11 0.15 0.15 0.14 0.25 0.30 0.35 0.40 0.45 0.50 Q4 10 Q4 11 Q4 12 Q4 13

Operating cost EBITDA level per ASK (CASK)

Fuel share of CASK CASK excl fuel

  • 8%
  • 6%

Unit cost ex fuel down 8% in Q4

  • Unit cost including fuel down 6 %

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

Unit cost ex fuel down 7% in 2013

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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Cost per ASK (CASK) (NOK) 0.59 0.55 0.55 0.53 0.56 0.49 0.46 0.46 0.45 0.42 CASK ex. fuel 0.49 0.44 0.41 0.40 0.37 0.38 0.34 0.32 0.31 0.29 0.49 0.44 0.41 0.40 0.37 0.38 0.34 0.32 0.31 0.29 0.09 0.11 0.15 0.13 0.19 0.10 0.12 0.14 0.14 0.13

0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Operating cost EBITDA level per ASK (CASK)

CASK excl fuel Fuel share of CASK

  • Unit cost including fuel down 6 %
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Europe’s best low-cost airline

  • Uniform fleet of Boeing 737-800s
  • Overheads
  • 4 new 737-800 delivered in Q4 (14 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
  • 1 % lower unit fuel consumption in Q4

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
  • Q4 sector length up by 15 %
  • Cost level adapted to local markets
  • Outsourcing/ Off-shoring
  • Rostering and aircraft slings optimized
  • Q4 utilization of 11.4 BLH pr a/c (+0.6 BLH)
  • Self check-in/ bag drop
  • Automated charter & group bookings
  • Streamlined operative systems & processes

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Europe’s best low-cost airline

BGO OSL HEL TRF LAS PALMAS (Gran Canaria) MMX AES OUL UME TOS EVE BOO GOT AAL BLL HAU SVG KSD ARN CPH TRD SXF HAM LGW CGN MUC

Traffic patterns determine the location of bases

OSL (3W) HEL (3W) ARN (4W) WAW (2W) LGW (1D) MADRID CPH (1D) HAM (4W) BGO MALAGA (Costa del Sol) TRD OSL HEL ARN GOT CPH SVG RYG TRF AAL LGW HAM CGN MUC WAW 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 BGO OSL HEL TRF TENERIFE OUL GOT SVG RYG ARN CPH TRD SXF HAM LGW CGN MUC ALICANTE (Costa Blanca) BGO OSL HEL RYG TRF MOL OUL UME TOS EVE GOT LGW BLL KSD ARN CPH TRD AES AAL SVG MUC HAM CGN TKU COPENHAGEN OSLO STOCKHOLM TRONDHEIM BERGEN STAVANGER HELSINKI BGO (2W) TRD BARCELONA OSL (2D) CPH (2D) ARN (2D) GOT (4W) ARN (1D) HAM (4W) SXF (3W) WAW (3W) LGW (1D)

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Europe’s best low-cost airline

Growing share of non-Nordic routes

HAM DBV NCE IBZ BCN PMI ALC AGP FUE TFS FCO ACE LPA BUD CFU JTR CTA LCA SPU LGW WAW SXF FAO MUC MAD CGN LAX JFK FLL

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Europe’s best low-cost airline

Increasing the Dreamliner order by another four 787-9

787-8 on firm order 787-8 in operation 787-9 on firm order

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Europe’s best low-cost airline

2014: Re-deliveries 737-300

  • 740 seats

Re-deliveries 737-800

  • 558 seats

Deliveries 737-800 +2,604 seats Deliveries 787-8 +1,164 seats

Current committed fleet plan

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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 – Increased competitive pressure in the Nordic region

  • Production

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

  • Increasing the fleet by adding 737-800’s and 787-8’s
  • Utilization and distance increase short-haul driven by UK and Spanish bases
  • Expanding long-haul operations

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

  • Cost development

– Unit cost expected in the area of 0.40 (unchanged)

  • Excluding hedged volumes
  • Fuel price dependent – USD 950 pr. ton
  • Currency dependent ● USD/NOK 6.00 ● EUR/NOK 7.75 ●
  • Production dependent
  • Based on the currently planned 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 413 scheduled routes to 128 destinations in 38 countries

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Europe’s best low-cost airline

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Norwegian Air Shuttle ASA

Organization number NO 965 920 358 MVA

Telephone +47 67 59 30 00 Telefax +47 67 59 30 01 Internet www.norwegian.com Mailing address P.O. Box 113 No – 1330 Fornebu Visiting address Oksenøyveien 3