Norwegian (NAS) Q3 2007Norwegian (NAS) Q3 2007Norwegian (NAS) Q3 2007Norwegian (NAS) Q3 2007Norwegian (NAS) Q3 2007Norwegian (NAS) Q3 2007Norwegian (NAS) Q3 2007Norwegian (NAS) Q3 2007
BjBjøørn Kjos (CEO)rn Kjos (CEO)
Oslo, 24. October 2007Oslo, 24. October 2007
2
Strong revenue growth continues in Q3 07
● The Group had total revenues of MNOK 1,324 which is a 51% increase
since last year
● Acquisition of FlyNordic contributes MNOK 153 to top line growth in Q307
Q3 04 Q3 05 Q3 06 Q3 07
Revenue 332 590 878 1323
Domestic Revenue 191 223 353 505
International Revenue 141 367 525 819
Domestic Revenue Growth -6 % 17 % 58 % 43 %
International Revenue Growth 442 % 160 % 43 % 56 %
0
400
800
1200
1600
Q3 04 Q3 05 Q3 06 Q3 07
MNOK
3
168
54
-11
64
-40
0
40
80
120
160
200
Q3 04 Q3 05 Q3 06 Q3 07
EBITDA MNOK
Q3 07 margin improves on growing
international traffic and ancillary revenue
● Group earnings (EBITDA) of 168 MNOK in Q3 07 (54 MNOK)
● Group earnings 76 MNOK after tax (28 MNOK)
● Group margin (EBITDA) of 14 % (6 % in Q3 06)
Q3 04 Q3 05 Q3 06 Q3 07
EBITDA MNOK -11 64 54 168
EBTIDA margin % -3 % 11 % 6 % 14 %
Earnings after tax MNOK -11 44 28 76
Eearnings Per Share 0.6 2.4 1.4 3.7
Negative
earnings
impact from
launching
Poland base
4
10
-3
-36
-52
-70
-50
-30
-10
10
30
50
Q4 06 Q1 07 Q2 07 Q3 07
EBITDA MNOK
The Polish operation shows positive
results (EBITDA) in Q3 07
● Polish operations EBITDA 10 MNOK
● 13 MNOK earnings improvement since Q2 2007
● The Warsaw base continues to improve, but is influenced by
seasonality
5
Cash Flow fluctuation due to seasonality
● Cash flow from operations of MNOK -68 (-137)
– Decrease in air traffic settlement liabilities
● Cash Flow from investments affected by:
– Deposit for 42 new aircraft: MNOK -266
– Acquisition of FlyNordic: MNOK +126
● Cash and equivalents MNOK 810 (387)
-400
-200
200
400
600
Q1 Q2 Q3
Net Change CF
MNOK
2005 2006 2007
6
39 % of Boeing 737-800 purchase has been hedged
● Instruments used are knock-in forwards
● Accounting standard IAS 39 – hedge accounting
● Inefficiency in hedge compared to cash flow on hedge object
results in loss in Q3 of MNOK 31 charged to financial items
7
Production growth of 21 % absorbed by 23 % traffic growth
● 21 % production growth since last year, international growth of 24 %
● Load factor at 86 %, international load factor is leveling out at 87 %
August &
September
Norwegian (million) Q3 03 Q3 04 Q3 05 Q3 06 Q3 07
ASK 331 683 1033 1693 2042
RPK 221 468 892 1434 1767
Load Factor 67 % 69 % 86 % 85 % 87 %
FlyNordic (million) Q3 03 Q3 04 Q3 05 Q3 06 Q3 07
ASK 291
RPK 242
Load Factor 83 %
8
2 million passengers were carried through
Norwegian’s network last three months
● Number of domestic passengers is growing at approx 13 %
● Number of international passengers is growing at approx 56 %
-200
300
800
1300
1800
2300
Q3 03 Q3 04 Q3 05 Q3 06 Q3 07
Passengers
(Thousands)
International Passengers
Domsestic Passengers
9
Domestic market share approaching 45 % on key routes
as low fares stimulates and increase the total market
● Price and product enhancements stimulates business and leisure
travel and increase the total market
● Increased production on Bergen and Trondheim attracts
business travelers
26 %26 %24 %23 %
34 %
35 %33 %
30 %
40 %42 %39 %
35 %
43 %45 %44 %
38 %
0 %
10 %
20 %
30 %
40 %
50 %
Stavanger Bergen Trondheim Tromsø
% Market Share
Q3 04 Q3 05 Q3 06 Q3 07
10
Cost development
● Unit cost of 0.50 in Q3 2007
– Added cost of 0.01 from wet lease
of two aircraft
0,500,51
0,470,46
0,020,03
0,4
0,45
0,5
0,55
Q3 04 Q3 05 Q3 06 Q3 07
CASK NOK
Fuel
05-06
Fuel 05-07 and
Wet Lease costs
11
Ancillary revenue grows as new products are
introduced to the market – still upside potential
Ancillary revenue per passenger
● Q3 07 ancillary revenue 30 NOK per passenger (114 % growth)
● Driven by new and improved products maturing;
– seating, baggage/carry on, commission from hotel and rental car bookings
● Major LCC’s ancillary revenue ranging from 50-70 NOK per passenger
30
141415
0
10
20
30
40
50
Q3 04 Q3 05 Q3 06 Q3 07
12
● The credit card ”Norwegian Reward” was made
publicly available on 17 October
● The card is not only a credit card issued by Bank
Norwegian, but also an integrated part of Norwegian
Air Shuttle’s frequent flyer benefit program
● More than 15,000 cards were ordered within the
first week.
● Conditional upon
– Norwegian Air Shuttle ASA to hold max 20 %
– Minimum share capital of 270 MNOK
● Project on track – Equity issue will be carried out in November and the bank will be fully operational in the middle of November
● The roadshow for the coming equity issue will start this week
13
New, environmentally friendly fleet of Boeing 737-800s
14
The most environment-friendly airplane in production
Source: Boeing
Up to 43% reductions on a flight from Oslo to Alicante
New technology engines
Blended winglets+
4-5% extra CO2/NoX reductions
15
Expectations for remaining 2007
Expected business environment:
● Increased competition on international routes
● Stable competition in Sweden and Poland
Expected results (ex FlyNordic):
● Unit cost for 2007 in the area of NOK 0.53
– May be negatively influenced if the fuel price remains at the current high levels or
the US dollar strengthens
– USD hedged 65 % H2 07 and 20-25 % H1 08
● Increased revenue from third party sales
Expected results Poland start up:
● The Warsaw base continues to improve. We expect negative results for the
Warsaw base in Q4 2007 and Q1 2008 due to seasonality.
16
Expectations for 2008
● The growth in ASK for 2008 is expected to be in the area of 50 %.
● Growth target depends on the final delivery schedule of new
737-800 and finalization of route program
● Unit cost to come down to NOK 0,51- 0,52 due to changes to route
portfolio mix
Growth target ASK for 2008
Q1 Q2 Q3 Q4
2007
2008
Plenty of opportunities -
127 routes to 75 destinations129 routes to 76
destinations
18
Thank you!