Norwegian Air Shuttle ASA Q1 2013 Presentation April 18 th 2013 CEO - - PowerPoint PPT Presentation

▶
norwegian air shuttle asa
SMART_READER_LITE
LIVE PREVIEW

Norwegian Air Shuttle ASA Q1 2013 Presentation April 18 th 2013 CEO - - PowerPoint PPT Presentation

Jun 24, 2023 334 likes •559 views

Norwegian Air Shuttle ASA Q1 2013 Presentation April 18 th 2013 CEO Bjrn Kjos 1 Double digit revenue growth in Q1 Group revenues of MNOK 2,904 in Q1 2013 + 23 % 3 000 2 500 2 000 Domestic Revenue (MNOK) International Revenue (MNOK)

slide-1
SLIDE 1

1

Norwegian Air Shuttle ASA

Q1 2013 Presentation April 18th 2013 CEO Bjørn Kjos

slide-2
SLIDE 2

Revenues 1 592 1 895 2 360 2 904 Domestic revenue 709 780 872 1 043 % y.o.y. chg

17 % 10 % 12 % 20 %

International revenue 883 1 115 1 488 1 861 % y.o.y. chg

13 % 26 % 33 % 25 %

500 1 000 1 500 2 000 2 500 3 000

Q1 10 Q1 11 Q1 12 Q1 13

MNOK

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

+ 23 %

Double digit revenue growth in Q1

  • Group revenues of MNOK 2,904 in Q1 2013

Slide: 2

slide-3
SLIDE 3

Q1 10 Q1 11 Q1 12 Q1 13 Q1 10 Q1 11 Q1 12 Q1 13 EBITDAR margin

  • 1 %
  • 12 %
  • 11 %

15 % EBT margin

  • 17 %
  • 21 %
  • 17 %
  • 6 %
  • 23
  • 230
  • 252

438

  • 300
  • 200
  • 100

100 200 300 400 500 MNOK

  • 275
  • 406
  • 398
  • 160
  • 500
  • 300
  • 100

100 MNOK

Pre-tax profit improved by 238 million in Q1

Slide: 3

EBT development Q1 EBITDAR development Q1

EBITDAR MNOK 438

  • 252

EBITDA MNOK 189

  • 497

EBIT MNOK 69

  • 574

Pre-tax profit (EBT) MNOK

  • 160
  • 398

Net profit MNOK

  • 117
  • 285
slide-4
SLIDE 4

Underlying EBT improvement of MNOK 165 in Q1

4

slide-5
SLIDE 5

Ancillary revenue remains a significant contributor

5

  • Ancillary revenue comprises 12 % of Q1 revenues
  • NOK 88 per scheduled passenger (an increase of 5 % from last year)
slide-6
SLIDE 6

Cash flows from operations in Q1 13 Cash flows from investing activities in Q1 13 Cash flows from financing activities in Q1 13 Cash and cash equivalents at period-end MNOK 2 445 MNOK -407 MNOK 158 MNOK 962

(MNOK 544) (MNOK -178) (MNOK 15) (MNOK 1487)

Cash & cash equivalents of NOK 2.4 billion

6 Condensed Consolidated Statement of Cash Flow

Unaudited Year End

(Mill. NOK) Q1 13 Q1 12 Q1 13 Q1 12 2012 Net cash flows from operating activities 961.6 544.0 961.6 544.0 2 021.6 Net cash flows from investing activities 158.2

  • 177.6

158.2

  • 177.6
  • 2 765.5

Net cash flows from financial activities

  • 406.6

14.9

  • 406.6

14.9 1 369.4 Foreign exchange effect on cash 0.8 0.3 1.1 0.3 0.3

Net change in cash and cash equivalents

714.0 381.6 1 339.8 381.6 625.8

Cash and cash equivalents in beginning of period

1 730.9 1 104.9 1 730.9 1 104.9 1 104.9

Cash and cash equivalents in end of period

2 444.9 1 486.6 2 444.9 1 486.6 1 730.9

Quarterly (end of Q1 13) YTD (end of Q1 13)

slide-7
SLIDE 7
  • Total balance of NOK 13.2 billion
  • Net interest bearing debt NOK 3.0 billion
  • Equity of NOK 2.3 billion at the end of the first quarter
  • Group equity ratio of 17 % (17 %)

Equity improved by MNOK 643 compared to last year

Slide: 7 Slide: 7

1 487 Cash 2,445 1 552 Receivables 1,952 2 227 Aircraft prepayments 2,684 4 419 Non-current assets 6,131

2 000 4 000 6 000 8 000 10 000 12 000 Q1 12 Q1 13

MNOK

Equity 2,304 1 661 Pre-sold tickets 3,269 2 291 Other current liabilities 2,904 2 527 Long term liabilities 4,736 3 207

Q1 13 Q1 12

slide-8
SLIDE 8

Traffic growth of 19 % in Q1

  • Unit revenue (RASK) up 2 %
  • Average flying distance up 11 %

Slide: 8 Slide: 8

ASK 370 569 933 1 342 2 183 2 674 3 507 4 498 5 266 6 378 Load Factor 65 % 68 % 77 % 75 % 77 % 75 % 75 % 74 % 77 % 76 % 65 % 68 % 77 % 75 % 77 % 75 % 75 % 74 % 77 % 76 %

0 % 20 % 40 % 60 % 80 % 100 % 1 000 2 000 3 000 4 000 5 000 6 000

Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13

Load Factor Available Seat KM (ASK)

ASK Load Factor

+ 21 %

slide-9
SLIDE 9
  • An increase of 280,000 passengers

3.9 million passengers in Q1

Slide: 9 Slide: 9

Pax (mill) 0.4 0.6 1.0 1.3 2.0 2.1 2.7 3.1 3.6 3.9

0.00 1.00 2.00 3.00 4.00

Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13

Passengers (million)

+ 8 %

slide-10
SLIDE 10

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) Q1 08 26 % 9 % 2 % 0 % 1 % 1 % Q1 09 33 % 10 % 5 % 0 % 1 % 3 % Q1 10 37 % 11 % 10 % 0 % 4 % 4 % Q1 11 37 % 14 % 11 % 2 % 5 % 5 % Q1 12 36 % 18 % 12 % 8 % 6 % 7 % Q1 13 36 % 18 % 14 % 9 % 6 % 11 % 0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 %

+ 4,000 pax + 10,000 pax + 104,000 pax + 39,000 pax + 21,000 pax + 170,000 pax

Continued strong international growth in Q1

Sources: Avinor, Swedavia, Copenhagen Airports, Finavia, Gatwick Airport, Aena

slide-11
SLIDE 11

Cost per ASK (CASK) (NOK) CASK ex. fuel 0.40 0.51 0.47 0.33 0.50 0.37 0.50 0.36

0.40 0.37 0.36 0.33

0.11 0.12 0.15 0.13 0.30 0.35 0.40 0.45 0.50 0.55 Q1 10 Q1 11 Q1 12 Q1 13

Operating cost EBITDA level per ASK (CASK)

Fuel share of CASK CASK excl fuel

  • 8%
  • 8%

Unit cost down 8 % in Q1

Slide: 11 Slide: 11

  • Unit cost including & excluding fuel down 8 %

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 (Net foreign exchange (loss) or gain). For the above reason CASK excludes losses and gains from “other losses/ (gains)” to better reflect the actual cost development.

slide-12
SLIDE 12

Aiming for the cost “Comfort Zone”

Sources: SAS Group Q3-2012 report & Annual Report 2011 (cost displayed October 2011 – September 2012), Finnair Plc. Annual Report 2012, Ryanair Annual Report 2012, easyJet Annual Report 2012, Air Berlin Annual Report 2012, Vueling Results Presentation FY’12 and Q4’12 and Norwegian’s estimations

  • 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).
  • Finnair: Non-airline operating expenses calculated by deducting “Airline Business” expenses as presented in the “Business segment data” from total operating expenses.
  • SAS Group: Revenues from mail & freight, ground handling services, technical maintenance and terminal & forwarding services as presented in the 2011 annual report are classified as “non-airline” and are deducted from airline operating expenses.
  • SAS Group’s figures are unadjusted for “restructuring costs” as it has been a constant fixture in most financial statements the last decade.
  • 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
  • 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 (Net foreign exchange (loss) or gain). For the above reason CASK excludes losses and gains from “other losses/ (gains)” to better reflect the actual cost development.

slide-13
SLIDE 13

Longer distance reduces unit cost

Sources: SAS Group Q3-2012 report & Annual Report 2011 (cost displayed October 2011 – September 2012), Finnair Plc. Annual Report 2012, Ryanair Annual Report 2012, easyJet Annual Report 2012, Air Berlin Annual Report 2012, Vueling Results Presentation FY’12 and Q4’12 and Norwegian’s estimations

  • 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).
  • Finnair: Non-airline operating expenses calculated by deducting “Airline Business” expenses as presented in the “Business segment data” from total operating expenses.
  • SAS Group: Revenues from mail & freight, ground handling services, technical maintenance and terminal & forwarding services as presented in the 2011 annual report are classified as “non-airline” and are deducted from airline operating expenses.
  • SAS Group’s figures are unadjusted for “restructuring costs” as it has been a constant fixture in most financial statements the last decade.
  • 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
  • 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 (Net foreign exchange (loss) or gain). For the above reason CASK excludes losses and gains from “other losses/ (gains)” to better reflect the actual cost development.

Operating cost EBITDA level per ASK (CASK) (NOK) Average stage length (KM)

slide-14
SLIDE 14
  • Flying cost of 737-800 lower than 737-300
  • 737-800 has 38 “free” seats
  • 5 % lower unit fuel consumption in Q1

Reaching the aim of FY CASK NOK 0.30 excluding fuel

14

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

  • Uniform fleet of Boeing 737-800s
  • Overheads
  • Fixed costs divided by more ASKs
  • Frequency based costs divided by more ASKs
  • Q1 stage length up by 11 %
  • Cost level adapted to local markets
  • Outsourcing/ Off-shoring
  • Rostering and aircraft slings optimized
  • Q1 utilization of 10.6 BLH pr a/c (+0.4 BLH)
  • Self check-in/ bag drop
  • Automated charter & group bookings
  • Streamlined operative systems & processes
slide-15
SLIDE 15

Offering a better product at lower cost

slide-16
SLIDE 16

Trial increases customer perception

16

Comment from CNN and «Quest means business» during low cost airline testing (Apr.2013)

  • London - Mediterranean routes with 83% load

– April to date (two first weeks) – Entirely new production

The data is based on the response from 21,491 respondents over the past 44 weeks and as is a Nordic average which includes Norway, Sweden, Denmark and Finland.

slide-17
SLIDE 17

Current committed fleet plan

17

  • 14 new 737-800 deliveries in 2013
  • 3 new 787-8 Dreamliner expected in 2013
slide-18
SLIDE 18
  • Business environment

– Increased economic uncertainty in parts of Europe – Seasonal fluctuations – Continued but eased yield pressure

  • Production

– The company expects a production growth (ASK) in excess of 25%

  • 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 – 0.43 (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)

Slide: 18 Slide: 18

slide-19
SLIDE 19

Norwegian offers 367 scheduled routes to 121 destinations in 37 countries.

slide-20
SLIDE 20

20