Double digit revenue growth in Q1
• Group revenues of MNOK 2,360 in Q1 2012
Slide: 2
Seasonally slow Q1 affected by soaring oil price
– EBITDAR MNOK - 252 (-230)
– EBITDA MNOK - 497 (-430)
– EBIT MNOK - 575 (-495) .
– Pre-tax profit (EBT) MNOK - 398 (-406)
– Net profit MNOK - 286 (-293)
Slide: 3
EBT development Q1EBITDAR development Q1
-398 -406
115
3316
100
-259 -306
25
Re
sult
im
pro
ve
me
nt
MN
OK
47
-500
-400
-300
-200
-100
0
100
Q1 2012
Acutal
Fuel Price
increase
More efficient
aircraft reduce
consumption
Provisions
re-delivery
737-300
Wet Lease Underlying
Q1 2012
Underlying
Q1 2011
Expansion
(SE, DK, FI)
Q1 2011
Actual
EB
T (
MN
OK
)
Underlying EBT improvement of MNOK 47
4
• Fuel price up 15 % since last year – equivalent to MNOK 115
• More efficient aircraft saves MNOK 25 in fuel cost
• MNOK 33 accumulated provisions for re-delivery 737-300 ‘s
• MNOK 16 Wet Lease cost
Cash & cash equivalents of NOK 1.5 billion
5
• Cash flows from operations in Q1 2012 MNOK +544 (+229)
• Cash flows from investing activities in Q1 2012 MNOK -178 (-150)
• Cash flows from financing activities in Q1 2012 MNOK +15 (-28)
• Cash and cash equivalents at period-end MNOK +1,487 (+1,229)
1 229Cash
1,487
1 260
Receivables
1,552
4 630
Non-current
assets
6,646
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
10 000
Q1 11 Q1 12
MN
OK Equity
1,661 1 506
Pre-sold
tickets
2,291 1 822
Other
current
liabilities
3,527
1 359
Long term
liabilities
3,207
2 433
Q1 12 Q1 11
• Total balance of NOK 9.7 billion
• Net interest bearing debt NOK 2.5 billion
• Equity of NOK 1.7 billion at the end of the first quarter
• Group equity ratio of 17 % (21 %)
Equity improved by more than MNOK 150 compared to last year
Slide: 6Slide: 6
Traffic growth of 22 % in Q1 2012
• Load up 3 p.p. despite capacity growth of 17 %
• Unit revenue (RASK) up 6 %
Slide: 7Slide: 7
ASK 208 370 569 933 1 342 2 183 2 674 3 507 4 498 5 266
Load Factor 44 % 65 % 68 % 77 % 75 % 77 % 75 % 75 % 74 % 77 %
44 %
65 %68 %
77 %75 %
77 %75 % 75 % 74 %
77 %
0 %
20 %
40 %
60 %
80 %
100 %
0
1 000
2 000
3 000
4 000
5 000
Q1 03 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
Loa
d F
act
or
Av
aila
ble
Se
at
KM
(A
SK
)
ASK Load Factor
+ 17 %
• An increase of 592,000 passengers
More than 3.6 million passengers in Q1 2012
Slide: 8Slide: 8
Pax (mill) 0.2 0.4 0.6 1.0 1.3 2.0 2.1 2.7 3.1 3.6
0.0
1.0
2.0
3.0
4.0
Q1 03 Q1 04 Q1 05 Q1 06 Q1 07 Q1 08 Q1 09 Q1 10 Q1 11 Q1 12
Pa
sse
ng
ers
(mill
ion
)
+ 19 %
27 %
39 %
8 %
16 %
4 %n/a
29 %
45 %
9 %
15 %
8 %
20 %
30 %
44 %
13 %
17 %
10 %
19 %
29 %
43 %
16 %
22 %
11 %
20 %
0 %
10 %
20 %
30 %
40 %
50 %
International
From Oslo Airport (OSL)
Domestic
From Oslo Airport (OSL)
International
From Stockholm Airport
(ARN)
Domestic
From Stockholm Airport
(ARN)
International
From Copenhagen Airport
(CPH)
Domestic
From Copenhagen Airport
(CPH)
Ma
rke
t S
ha
re N
orw
eg
ian
(Q
1)
+ 31,000 pax
+ 52,000 pax
+ 116,000 pax
+ 116,000 pax
+ 97,000 pax
- 8,000 pax
• New dom. routes to Malmö & Gothenburg
• Substantial international production growth
Largest share of growth outside Norway
Newly started base in Helsinki with 300,000 passengers in Q1
Norwegian in Oslo
+ 83,000 pax
• Marginal increase in domestic frequencies
• Growth due to larger aircraft and charter
Norwegian in Stockholm
+ 232,000 pax
Norwegian in Copenhagen
+ 89,000 pax
• International production growth
• Flying cost of 737-800 lower than 737-300
• 737-800 has 38 “free” seats
• 3 % lower unit fuel consumption in Q1
Norwegian aiming for CASK NOK 0.30 excluding fuel
10
Scale economiesScale economies New more efficient aircraftNew more efficient aircraft Growth adapted to int’l marketsGrowth adapted to int’l markets
Crew and aircraft utilizationCrew and aircraft utilization Optimized average stage lengthOptimized average stage length AutomationAutomation
• 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 3 %
• Cost level adapted to local markets
• Outsourcing/ Off-shoring
• Rostering and aircraft slings optimized
• Q1 utilization of 10.2 BLH pr a/c
• Self check-in/ bag drop
• Automated charter & group bookings
• Streamlined operative systems & processes
Underlying unit cost down 3 %
Slide: 11Slide: 11
• Unit cost up 2 %– 15 % higher spot fuel price (25 % increase including fuel hedges)
• More efficient aircraft saved MNOK 25 in fuel cost in Q1
Cost per ASK (CASK) (NOK) 0.56 0.51 0.50 0.51
CASK ex. fuel 0.45 0.40 0.37 0.36
0.45
0.40
0.37 0.36
0.11
0.11
0.13 0.15
0.30
0.35
0.40
0.45
0.50
0.55
0.60
Q1 09 Q1 10 Q1 11 Q1 12
Op
era
tin
g c
ost
EB
ITD
A le
ve
l p
er
AS
K (
CA
SK
)
Fuel share of CASK
CASK excl fuel
- 3 %
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 while foreign currency gains and losses from translation of USD denominated borrowings are recognized under financial items and is thus not included in the CASK concept. Hedge effects offset under financial items have not been included in this graph.
Norwegian positioned in the cost “Survival Belt” – a prerequisite for self sustainability
Aiming for the “Comfort Zone”
12
Sources: SAS Group Annual Report 2011, Finnair Plc. year-end report 2011 and Annual Report 2010, Ryanair Annual Report 2011, easyJet Annual Report 2011, Air Berlin Annual Report 2011 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). Here represented including depreciation and financial items.
•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” and “one-offs” as both items have 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
Ancillary revenue/ scheduled pax 70 80 86 84
Ancillary revenue/ all pax (inc. charter) 70 80 84 82
0
10
20
30
40
50
60
70
80
90
Q1 09 Q1 10 Q1 11 Q1 12
An
cill
ary
re
ve
nu
e p
er
pa
sse
ng
er
(NO
K)
Ancillary revenues remains a significant contributor
Slide: 13Slide: 13
• Ancillary revenue comprises 13 % of Q1 revenues
Current committed fleet plan
14
• 13 new 800 deliveries in 2012
• Short term shortage of 800’s
– Temporarily covered by existing 300’s (2012 CASK guidance unaffected)
• First 787-8 Dreamliner deliveries expected in Q1 2013
Offering a better product at lower cost
• Business environment
– Uncertain business climate
– Seasonal fluctuations
– Continued but stabilized yield pressure
• Production
– The company expects a production growth (ASK) of approximately 15 %
– Primarily from increasing the fleet by adding 737-800’s
– Capacity deployment depending on development in the overall economy and
marketplace
• Cost development
– Unit cost expected in the area of 0.43 – 0.44 (excluding hedged volumes)
• Fuel price dependent – USD 850 pr. ton (excluding hedged volumes)
• Currency dependent – USD/NOK 6.00 (excluding hedged volumes)
• Based on the current route portfolio
• Production dependent
• Larger share of aircraft with more capacity and lower unit cost
Expectations for 2012
Slide: 16Slide: 16
Norwegian offers 294 scheduled
routes to 112 destinations
Slide: 18