Q3 2019: Revenue and number of passengers up, comparable operating - PowerPoint PPT Presentation

Q3 2019: Revenue and number of passengers up, comparable operating profit down on costs, primarily driven by currencies and fuel cost 22 October 2019 Topi Manner 1

Our growth continued and market shares increased • Revenue increased by 7.9% to EUR 870.3 million • Record summer: over 4 million passengers, at maximum 104 weekly flights to Asia • Market shares in Asia and Europe increased • Strong performance in European traffic • Demand from Japan to Europe at good level; demand from Europe to Asia, especially Hong Kong, declined • Global operating environment in cargo weak as expected • Travel services revenue and number of passengers developed well 2

Revenue was up by 7.9%, costs and capacity increased more Comparable operating result Capacity Revenue NPS 100.7 M€ +9.5% +7.9% 38* (118.2 M€) Operating cost PLF (Excl. fuel) Operating cost Passenger volume +1.7%- +9.1% +10.9% +11.9%** points (In fuel combined effect of price paid, currency and hedges totaled 12 million euros) NPS = Net Promoter Score *New Customer satisfaction survey was launched in beginning of January 2019. In the new survey NPS is calculated based on responses from all customers starting from beginning of 2019, including Finnair Plus and non-members. In 2018, NPS was calculated based on responses from Finnair Plus members only and therefore these results are not comparable. In Q3 2018, NPS was 49. **Finnair carried in total of 4.1 million passengers in Q3/2019 and 3.7 million passenger in Q3/2018. 3

Finnair market shares (rolling 12 months) have increased in both Asian and European traffic Finnair market share and ASK development in Finnair market share and ASK development from/to AY Europe – AY Asia traffic Helsinki and Europe (including domestic) ASK, millions market share % market share % ASK, millions 8,0% 25 000 65% 25 000 7,0% 20 000 60% 20 000 55% 15 000 6,0% 15 000 50% 10 000 5,0% 10 000 45% 5 000 4,0% 5 000 40% 0 3,0% 0 Departure Periods Departure Periods Finnair market share (rolling 12 months) Finnair market share (rolling 12 months) Finnair ASK (rolling 12 months) Finnair ASK (rolling 12 months) Note: 2019/Q3 market shares are only including 2019/Jul and 2019/Aug Note: 2019/Q3 market shares are only including 2019/Jul and 2019/Aug 4

On the whole, Q3 developed according to our expectations Revenue by product • Our European traffic performed strongly and new 7.9% North American routes have been well-received. In 870 selected Asian routes, most notably Hong Kong, 807 57 53 53 lower demand was experienced. 46 55 42 • Ancillary sales grew slightly faster than passenger revenues. 715 657 • Cargo revenue was impacted by weaker demand across the industry. Q3 2018 Q3 2019 • The demand for travel services picked up after a +8.7% Passenger revenue challenging first half of the year, signalling more +8.8% Ancillary positive development for the rest of the year. -3.9% Cargo +8.6% Travel services 5 5

Strong performance in Europe, North Atlantic +28% ASK growth and softness in selected Asian routes drove Group passenger RASK development Domestic North America Total %Change Total %Change ASK (million) 335.0 -0.9% ASK (million) 1,153.8 28.2% Revenue (Million) 32.8 0.2% Revenue (Million) 58.5 26.0% RASK (Cents/ASK) 9.78 1.1% RASK (Cents/ASK) 5.07 -1.7% PLF % 68.9% 4.7pp PLF % 90.8% 3.7pp Europe Total %Change 5,021.2 4.9% ASK (million) 284.6 10.1% Revenue (Million) Total traffic Asia 5.67 5.0% RASK (Cents/ASK) Total %Change Total %Change 85.0% 5.3pp PLF % 12,623.6 9.5% ASK (million) ASK (million) 6,113.6 11.1% 714.7 8.7% Revenue (Million) Revenue (Million) 324.8 4.5% 5.66 -0.7% RASK (Cents/ASK) RASK (Cents/ASK) 5.31 -6.0% 86.2% 1.7pp PLF % PLF % 87.2% -2.3pp 6 *PLF=Passenger load factor

Q3 revenue growth was driven by strong performance in Europe Passenger revenue Q3/18 vs Q3/19 Other revenue Q3/18 vs Q3/19 +8.7% +4.1% 5.1 714.7 4.5 155.5 26.1 0.1 3.7 -2.2 45.7 149.5 -2.2 12.1 14.0 42.0 Ancillary 52.8 657.4 Cargo Travel services 55.0 57.0 52.5 Q3 PY Ancillary Cargo Travel services Q3/2019 Q3 PY Asia Atlantic Europe Domestic Unallocated Q3/2019  Traffic from Asia to Europe remained at good level, whereas demand from Europe to Asia was softer. In selected Asian routes, most notably Hong Kong, lower demand was experienced.  North American capacity growth is also reflected in passenger revenue. 7

Increased OPEX calls for more attention on efficiency OPEX, €782.9 million in total +10.9% Comparable EBIT Q3/18 vs Q3/19 -17.5 63.4 Passengerrevenue57.3 Ancillarysales3.7 Fuel costs Travel services4.5 4% 4% Cargo -2.2 Combined effect of price paid, currency and Staff costs 6% 24% hedges totaled approx. 12 million euros 6% Passenger and handling services -7.4 Traffic charges 10% Depreciation and impairment 17% Aircraft materials and overhaul -27.4 -5.5 12% Sales, marketing and distribution costs -10.0 16% Capacity rents 118.2 -10.3 Property, IT and other expenses -6.4 -1.7 100.7 -8.1 • Capacity growth 9.5% -4.1 • Operating costs 10.9% Q3/2018 Revenue Staff Fuel Mainte- Traffic Passenger Sales& Property, Depreciation Other Q3/2019 Comp. nance charges services Marketing IT & co. (NET) Comp. • OPEX excluding fuel 9.1% EBIT EBIT • Unit cost at constant currency excluding fuel decreased by 0.8%. (Q3/2019 vs Q3/2018) 8 OPEX = operating expenses.

Fuel costs increased with volume growth and the USD effect Fuel costs Q3/19 vs. Q3/18 Fuel hedges 30 September 2019 +27 100% 27 190 hedge ratio upper lower 90% 15 80% 70% 163 8 60% 50% 40% -23 30% 20% 10% 0% Q3 FY18 Volume Price Currency Hedging Q3 FY19 deviation ~12 M€ Period Hedging ratio Average price of the hedged position • Q3/18 hedging gain 27.1 M€ Q4 2019 73% 681 USD/tons* • Q3/19 hedging gain 0.0 M€ Q1 2020 69% 686 USD/tons* Q2 2020 59% 682 USD/tons* CO2 emissions trading fees have increased with capacity increases and contribute to fuel cost growth Q3 2020 48% 670 USD/tons* • Q3/18: 4.2 M€ * Average of swaps and bought call options strikes. 9 • Q3/19: 6.4 M€

Healthy balance sheet supports future investments 4 014 4 037 4 037 4 014 • Equity ratio 22.8% (26.3%) 3 997 3 997 3 944 3 944 15 10 1 021 1 006 1 119 • Gearing 73.6% (57.3%) 1 073 1 707 1 715 1 774 1 678 383 440 378 427 311 314 337 341 503 466 615 445 639 742 673 661 2 297 2 262 127 2 155 2 112 165 133 146 1 056 921 918 897 30 Sep 31 Dec 30 Jun 30 Sep 30 Sep 30 Jun 31 Dec 30 Sep 2018 2018 2019 2019 2019 2019 2018 2018 Cash investments for the financial year Assets HFS I-B debt Cash Tickets 2019 relate mainly to fleet and are Other assets Other liabilities expected to total approximately 480 million Other fixed assets Provisions euros, including advance payments. Fleet Equity Liabilities HFS 10 1) HFS = Held-for-Sale. 2) I-B = Interest-bearing

Sustainable, profitable growth • Productivity increases by simplifying and automating processes • New distribution strategy – Finnair.com and NDC Partner program • Continued focus on improving customer experience • New destinations: Daxing (Beijing), Sapporo, Punta Cana, Busan and Haneda (Tokyo) • Fuel efficiency and other sustainability actions, e.g. Nordic Initiative for Electric Aviation 11

Outlook and guidance Global airline traffic is expected to continue growing in the latter half of 2019. However, the operating environment is expected to remain volatile also in the second half of the year. The slowdown in the economies of Finnair’s key markets and the continued uncertainties surrounding global trade, including the US-China trade talks and Brexit, could impact the demand for air travel and for cargo. Finnair raises its capacity forecast for 2019 owing mainly to its new service to Beijing Daxing International Airport. Finnair estimates that capacity growth in 2019 will be between 11-12 per cent. Revenue is expected to grow at a somewhat slower pace than capacity in 2019. While the current outlook for Finnair’s seasonally strongest third quarter remains robust, we have started to see increased uncertainty especially in cargo demand. Finnair estimates that its comparable operating result will be between 4.5-6.0% of revenue in 2019, assuming no material changes in fuel prices and exchange rates. 12

Appendix 13

Capacity growth driving revenue growth Passenger revenue Q3/2018 vs Q3/2019, Meur ASK, mill PLF, % +57.3 +9.5% +1.7pp 7.5 13.6 60.3 714.7 -24.1 12,624 86,2 84,5 11,528 657.4 Q3 PY Q3 Q3 PY Q3 Avg. fare 1 -2.9% Q3/2018 ASK PLF (load) FX Yield, Q3 mix, 180 175 other EUR/ EUR/ PAX • Strong capacity growth drove the increase in passenger PAX revenue • Introduction of new service to LAX and capacity increases to HKG put pressure on yields. Q3 PY Q3 15 1) Avg. fare = Passenger revenue per revenue passengers