Norwegian (NAS) Q3 2007...Group margin (EBITDA) of 14 % (6 % in Q3 06) Q3 04 Q3 05 Q3 06 Q3 07...

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Norwegian (NAS) Q3 2007 Norwegian (NAS) Q3 2007 Norwegian (NAS) Q3 2007 Norwegian (NAS) Q3 2007 Norwegian (NAS) Q3 2007 Norwegian (NAS) Q3 2007 Norwegian (NAS) Q3 2007 Norwegian (NAS) Q3 2007 Bj Bj ø ø rn Kjos (CEO) rn Kjos (CEO) Oslo, 24. October 2007 Oslo, 24. October 2007

Transcript of Norwegian (NAS) Q3 2007...Group margin (EBITDA) of 14 % (6 % in Q3 06) Q3 04 Q3 05 Q3 06 Q3 07...

Page 1: Norwegian (NAS) Q3 2007...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

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

Page 2: Norwegian (NAS) Q3 2007...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

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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

Page 3: Norwegian (NAS) Q3 2007...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

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168

54

-11

64

-40

0

40

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120

160

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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

Page 4: Norwegian (NAS) Q3 2007...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

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10

-3

-36

-52

-70

-50

-30

-10

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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

Page 5: Norwegian (NAS) Q3 2007...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

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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

Page 6: Norwegian (NAS) Q3 2007...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

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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

Page 7: Norwegian (NAS) Q3 2007...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

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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 %

Page 8: Norwegian (NAS) Q3 2007...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

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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

Page 9: Norwegian (NAS) Q3 2007...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

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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

Page 10: Norwegian (NAS) Q3 2007...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

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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

Page 11: Norwegian (NAS) Q3 2007...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

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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

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Q3 04 Q3 05 Q3 06 Q3 07

Page 12: Norwegian (NAS) Q3 2007...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

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● 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

Page 13: Norwegian (NAS) Q3 2007...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

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New, environmentally friendly fleet of Boeing 737-800s

Page 14: Norwegian (NAS) Q3 2007...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

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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

Page 15: Norwegian (NAS) Q3 2007...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

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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.

Page 16: Norwegian (NAS) Q3 2007...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

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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

Page 17: Norwegian (NAS) Q3 2007...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

Plenty of opportunities -

127 routes to 75 destinations129 routes to 76

destinations

Page 18: Norwegian (NAS) Q3 2007...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

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Thank you!