4 th Quarter 2003 Yield pressure offset by large cost reductions

Transcription

1 Fiscal year 23 Analyst presentation Stockholm, February 11th Copenhagen and London February 12 4 th Quarter 23 Yield pressure offset by large cost reductions Continued strong pressure on yields Yields down (currency adjusted) 12% in Q4 Scandinavian Airlines Turnaround 25 well underway ahead of plan Unit cost (currency adjusted) down 19% Q4 (SK) Clear stabilisation of traffic volumes but no significant growth Group traffic +,5% Income statements for 23 Fiscal year MSEK Revenues ** -11% EBITDAR*) % Lease, depreciation & financial net % EBT bef. cap gains*) EBT incl. gains *) Excluding resctructuring and impairements **) including one off MSEK 57 from Swedish Aviation Authority Fiscal year 23 2 Fiscal year 23 3 SEK 7 billion decline in revenues largely compensated on cost side Total Revenues EBT bef gains in MSEK Overcapacity and yield pressure in the market place Market conditions Continued tough market conditions, but improving macro outlook New players have increased capacity by 5% on some routes in Scandinavia Aircraft easy and cheap to acquire/lease = > Severe overcapacity and price pressure SAS Group traffic on European routes increased more than AEA (6,4% vs. 1,4%) during 23 Long haul has improved significantly particularly on Asia A fundamental structural change is in process New Business models are replacing old ones Fundamentally changed customer preferences = > Turnaround 25 has highest priority Creation of three companies in each of Scandinavian countries Integration of Braathens and Scandinavian Airlines to one unit in Norway LCC+ base business model Target To reach sustainable profitability levels for any traffic flow of the SAS Group Airlines Fiscal year 23 4 Fiscal year 23 5 Fiscal year 23 6

2 Commercial Turnaround initiated Market place increasingly price sensitive, but premium market excist also in comoditized markets Focus in SAS Group Short/Medium haul Focus on efficient travel Customer productivity new innovative travel solutions Improved product on european longer routes Long haul inflight High service in Business Class Gunilla Berg CFO Fiscal year 23 7 Fiscal year 23 8 Fiscal year Turnaround 25 ahead of plan Total financial effect of implemented activities compared to plan Reduction of personnel MSEK Plan 5% 54% Status DEC 23 To be implemented Implemented Fiscal year 23 1 Plan 37% 41% Status DEC 23 Decided and under implementation 12,5 billion SEK in Turnaround ,1 2,8 Primary due to compensation level and choice of business model,7 1,5 1, Overhead Production Inflight - SK Distribution SGS STS Subsidiary Total Identified, functions concept - SK & Sales - SK Airlines & not decided SK/group Hotels wide Fiscal year ,6 2,8 12,5 2 billion 5% % -5% -1% -15% -2% 1st Q 21 Sharp reduction in unit cost from Q2 and Q3 in 4th Quarter Index last year, EBITDAR level (currency adjusted) Scandinavian Airlines 1% 3rd Q 21 1st Q 22 3rd Q 22 1st Q 23 3rd Q 23 Q1 unit cost down 2% Q2 unit cost down by 13% Q3 unit cost down by 14% Q4 unit cost down by 19% Fiscal year 23 12

3 Block hours for Group Airlines in 23 SAS Group one offs 22 and 23 Restructuring, impairments and capital gains Underlying yield development -6% to -7% Majority owned Airlines Air craft/day Pilots/year Cabin/year Scandinavian Airlines 7, Spanair 8, Braathens 7, Widerøe 6, Blue1 7, One offs Restructuring costs Dispute regarding Terminal 2 - Arlanda 57 Write down Expo Write down Travellink -52 Write down Cimber -91 Total Capital gains Sale of aircraft Sale of properties/other Sale of companies/shares Phasing in/out -574 Very limited Cash effect from restructuring Most of restructuring cost (MSEK 4) is related to future (24) salary cost of personnel that are laid off, but liberated from their postions. Total yield development, 23 vs 22 % Adjusted for one offs, the underlying yield development is negative by 6-7% Negative one off effects: Net pricing model Snowflake Intercontinental affect Total one offs 3-4 p.p. 2 p.p. 1 p.p. 6-7 p.p. Totalt Underlying yield development Net pricing effect Reported yield decline -12,5% Snowflake Intercontinental effect Fiscal year Fiscal year Fiscal year EBT before gains and exceptionals - Business area Business areas Business area 23 Change * Scandinavian Airlines Subsidiary & Aff. Airlines Airlines Support Businesses Airline Related Businesses Hotels Group eliminations -81 EBT, before gains & exceptionals Jørgen Lindegaard President & CEO * Proforma SAS World Sales Fiscal year Fiscal year Fiscal year 23 18

4 Unit cost Yield & traffic for Subsidiary Airlines in 23 Spanair s traffic up 5,9%, yield down by 4,6%, unit cost down 7,1% Yield decline to continue, but offset by in unit costs Braathens traffic up 15,8%, yield down by 18,9%, unit cost down 2,1% Yield decline to continue as prices are being reduced, but profitability has improved during the year as Turnaround 25 is being implemented Widerøe s traffic up 2,5%, yield down by 18,8%, unit cost down 9,9% Yield decline expected to continue, but profitability improved significantly as Turnaround 25 gives effect Blue1 s traffic up 23,8%, yield down by 25,%, unit cost down 19,7% Yield decline expected to continue as new longer routes are added to the network Subsidiary & Affiliated Airlines not immune to falling revenues Total Turnaround of MSEK 2 8 identified and initiated Jan-Dec in MSEK Revenues ,8% % ,8% 948-7,5% EBITDAR % % % 79-68% EBT -45 n.m 98-88% 77-6% -8 n.m Strategic considerations behind new shareholding in Estonian Air The Baltic states part of SAS home market Exploiting business opportunities to/from Estonia State of the art cost efficiency level approximately 5% lower than west European network airlines Synergy effects estimated at about MSEK 35 One-stop services via Copenhagen Stockholm hubs Fiscal year Fiscal year 23 2 Fiscal year Hotels continued weak hotel markets Weak trading conditions in Western Europe (specially in main capitals) Strong in the Baltic region and Eastern Europe Market share position unchanged New loyalty program introduced- Goldpoints Improvement program of MSEK 15 under implementation with full effect 24 Braathens has 17% lower unit cost than Scandinavian Airlines same distance flown Scandinavian Airlines Braathens Compensation on competitive level Will together with selected business models close gap of appr. MSEK 2 to reach the total target of MSEK 14 in Turnaround 25 January-December Total revenues EBITDA EBIT EBT Target unit cost Stage length Fiscal year Fiscal year Fiscal year 23 24

5 Sum up and agenda going forward Stabilization of market but no significant growth Turnaround 25 ahead of schedule Position as Europe s no 4 airline group maintained No proposed dividend for 23 Ambition for 24 positive result Normal seasonality expected Loss 1st Quarter Profit 2nd & 3rd Quarter Continued uncertainties about yields Thank you for your attention! This presentation can be downloaded at the SAS Group s homepage Additional slides for further information Fiscal year Fiscal year Fiscal year Positive currency offset by higher prices on fuel and increased security costs Currency Effect from USD + MSEK 1 6 Total currency effect + MSEK 1 1 USD deficit approximately MSEK 7 Hedged 6% for 24 Sensitivity decreased to MSEK 7 for 1% change Fuel & Security Negative price effect MSEK 7 Policy 4-6% 12 month rolling Exeptions for extreme pricing conditions Current hedge in place only for 1 st Quarter 24 Prices considered overvalued Increased security cost approximately MSEK 5 Product concept the base for future customer set up SK Premium SK Base SK Base + extra comfort Lounge access Improved inflight product Seating comfort (pitch) Low Cost Carrier + network carrier advantages our terms and your terms Timetable Transfers, partners & interline Peak availability All distribution channels Lojality program 3-classes LONG HAUL Base 2-classes - MEDIUM Base 1-class - SHORT Base Snowflake LCC Extra Premium Premium Low and high prices In all categories Fiscal year Fiscal year Fiscal year 23 3

6 Gap mainly found in compensation schemes Resulteffects from Turnaround 25 Three separate independent bases to reduce complexity within Scandinavian Airlines Crew Efficient production platform Technical maintenance Sales & Distribution Compensation on competitive level Overhead & Support ,5 3,1, Turnaround August Business structure setup Oct 3 Traffic Program and aircraft Feb 4 Administration completed Mar 4 Cabin Crew setup completed Oct 4 Pilots setup completed OSLO COPENHAGEN STOCKHOLM Fiscal year Fiscal year Fiscal year The Turnaround 25 business follow up a complement to existing follow up systems Distribution of cost reductions in Turnaround 25 by cost category Development of the number of employees in the SAS Group Steering of units on bottom line and include all effects of Turnaround 25 Follow up through normal reporting Aircraft lease Personell 36 Plan: Budget and Business Plans 11% 9% 6% Inflight 35 Follow up status negotiations Follow up FTE reductions FTE Follow up Steering of businesses and business units Follow up activity KPI Follow up of existing KPIs KPIs on unit level task force and activity level 11% 5% 9% 49% IT Sales Ground Handling & Technical Other JAN2 FEB MAR APR MAJ JUN JUL AUG SEP OKT NOV DEC JAN-3 FEB MAR APR MAJ Outcome: JUN JUL AUG SEP OKT NOV DEC Follow up of activities vs plan Target SEK 14 billion of which SEK 12,5 billion are decided Fiscal year Fiscal year Fiscal year 23 36

7 New agreements with possibility to increase crew and pilot block hours by over 4% Turnaround 25 amounting to MSEK 2 8 for Subsidiary Airlines and Hotels Automatic check in will increase SGS efficiency Block hours per year, cabin crew > 4% Block hours per year, pilots > 4% MSEK Initiated in April 23 Total measures of at least MSEK 2 8 Most of measures will give effect in 24 4% 35% 3% 25% Target to increase Self Service check in to 6% in 25 Internet check low, but increasing % 15% Cabin crew block hours from 53 to 75 Pay freeze 23/24 Flexible scheduling Work day from 1,5 to 12 hrs/day Hours/week up from 42 to 45 Pay freeze 23/24 Block hours from 49 to Spanair Braathens Widerøe Blue1 Hotels 1% 5% % Self Service Automat 237 Internet Fiscal year Fiscal year Fiscal year New organization three bases Separation of bases and new leaner organization New agreements with unions and separation of bases => Productivity improvements up to 75 blhr/year CPH Network Strategies, and network Revenue and Strategies revenue Marketing and Channel Product Management OSL CEO/GM COO STO Staber Staff unit (STODQ) Accountable Manager and Operations Management Intercont Board Commuter Summary structural changes in Turnaround 25 Increased productivity by more than 4% in Scandinavian Airlines New traffic system point to point Utilize aircraft 1 more hour per day at 3 bases Aircraft types allocated to bases Decrease overhead and administration Centralization of base maintenance to Stockholm- Arlanda PFI for pilots implemented as from August New aircraft configuration with approx. 7% more seats Increase internet sales share Improve check-in automation Cabin crew > 4% Pilots > 4% 2, 18, 16, 14, 12, 1, 8, 6, 4, 2,, Share of sales over Internet has increased steadily Jan Feb Mar Apr May Jun jul Aug Sep Oct Nov Dec % Sold via Internet Direct internet sales reached 16,3% of total number of bookings in December 23 Fiscal year 23 4 Fiscal year Fiscal year 23 42

8 New dynamic price models under implementation New Internet booking launched in October will make booking simplier and transparent New efficient booking platform Traditional models Main focus: optimize revenues / minimize deviation Dynamic models Main focus: maximize cabin factor / maximize buy-up Permanent fare structure (static rather than dynamic) Dynamic price setting, based on supply/demand SAS Price level Campaign fare Fill-up Price level Days prior to departure Days prior to departure Dynamic price model introduced by Spanair in March 23 Dynamic models under implementation within the other airlines in the Group Increased transparency! New booking platform introduced on October 2 nd Trip is booked one way. Fiscal year Fiscal year Fiscal year Business areas Operating expenses down by 12,8% in Scandinavian Airlines January December 23 pro forma 22 Operating revenue ,9% Personnel expeses ,3% Sales & distribution ,6% Fuel ,1% Government user fees ,8% Catering ,5% Handling costs ,6% Technical aircraft maintenance ,4% Data & telecommunication costs ,8% Other costs ,% Operating expenses ,8% EBITDAR EBIT EBT Fiscal year Fiscal year Fiscal year 23 48

9 Business Models Today Clear distinction between LCC c and Network Carrier Business Models Ultra simple travel Simple travel Advanced travel LCC s with zero frills Secondary A/P s ~1 km outside city centers LCC s with certain frills Secondary A/P s closer to city centers or primary A/P s Fiscal year Network carriers Hub/O&D driven Frills Alliances allow worldwide coverage Tomorrow How far left or right should an airline position itself? How much added value can be offered in each of the Business Models? We think they will interafct! Ultra simple travel Simple travel Advanced travel Strategic focus going forward Forceful implementation of Turnaround 25 Close gap to non frills Find the right Business model for each traffic flow Ultra simple travel Simple travel Advanced travel LCC s with zero frills Secondary A/P s ~1 km outside city centers LCC s with certain frills Secondary A/P s closer to city centers or primary A/P s Fiscal year 23 5 Network carriers Hub/O&D driven Frills Alliances allow worldwide coverage Business Models Current and Future Ultra simple travel Simple travel Advanced travel LCC s with zero frills Secondary A/P s ~1 km outside city centers Today Clear distinction between LCC c and Network Carrier Business Models Service level network carrier Service level no frills LCC s with certain frills Secondary A/P s closer to city centers or primary A/P s Adjustment measures to narrow gap Tomorrow LCC will partly adopt Business model by offering limited frills Network carriers will adjust to attract part of LCC s potential but still keep an advanced premium service and network. Fiscal year Network carriers Hub/O&D driven Frills Alliances allow worldwide coverage Scandinavian Airlines hit by weak economies and uncertain markets Scandinavian Airlines Development of the number of employees Scandinavian Airlines key airline profitability drivers Proforma January December Passenger revenue vs 22 January-December Other revenue Operating revenue EBITDAR EBIT EBT Forecast: 9 26 Outcome: Traffic (RPK) down 5,6% Cabin Factor down 2,2 p.u. Yields (currency adjusted) down 12,5% Operational unit costs down 11,8% JAN2 FEB MAR APR MAJ JUN JUL AUG SEP OKT NOV DEC JAN-3 FEB MAR APR MAJ JUN JUL AUG SEP OKT NOV DEC Fiscal year Fiscal year Fiscal year 23 54

10 Traffic on North Atlantic hit by war in Iraq but recovery noted from May RPK Cabin factor (%) North Atlantic January March May July September November January March May July September November Month SAS AEA 45 General improved load factors as capacity has been adjusted to seasonal patterns Oslo-New York will be ceased as from March 24 Traffic in Jan-Dec 23: European airlines (AEA) traffic up 3,9% SAS traffic up 9,8% Fiscal year Asian traffic severely affected by SARS recovery from June RPK Week SAS AEA Cabin factor (%) Asia Fiscal year January March May July September November January March May July September November Month SAS AEA 49 Hit hard by SARS Daily frequencies resumed to Bangkok/ Singapore and Beijing as from August 22 nd Shanghai as from March 28th Positive mix during the end of 23 Traffic in Jan-Dec 23: AEA traffic down 7,% SAS traffic down 14,6% European routes affected by uncertain market conditions RPK Week Cabin factor (%) Europe SAS AEA January March May July September November January March May July September November Month SAS AEA Fiscal year Weak market Cabin factor in line with AEA Traffic Jan-Dec 23: AEA traffic up 1,4% SAS traffic down 1,7% Yields under severe pressure 21-3rd Quarter 23 Total system - currency adjusted ECA European cooperation agreement still negative but improvements vs. 22 Brent Crude vs. Jet Fuel January 1998 to Date % % -2% -4% -6% -8% -1% -12% -14% -16% 3rd Quarter 21 1st Quarter 22 3rd Quarter 22 1st Quarter 23 3rd Quarter 23 Yields down 11,6% in 4th Quarter 23 Affected by: introduction of Snowflake by app 7-8 p.p Easter holidays Class mix negative Price campaigns More RPK s of intercontinental traffic with lower yield Reduced commissions by ~3% Tri-party Joint Venture agreement with BMI, Lufthansa and SAS signed November 9, 1999 In effect from January 1, 2 Main scope: To integrate the parties scheduled pass. transport to/ from London/ Manchester Negative result effect 22: MSEK 418 (335) Negative result effect 23: MSEK 244 US Dollar per Barrel Brent 1st Nearby Close Jet CIF Cargoes NWE US Dollar per Metric Ton Fiscal year Fiscal year Fiscal year 23 6

11 Fuel prices Average rates: USD/MT USD/MT USD/MT USD/MT Q USD/MT Q USD/MT Q USD/MT Q USD/MT Income Subsidiary & Affiliated Airlines (MSEK) January December 23 22* Operating revenues Operating expenses EBITDAR EBT bef gains * = Spanair was included as an affiliated company Jan/Feb 22 Fiscal year Fiscal year Fiscal year Subsidiary & Affiliated Airlines positive Quarter for most airlines Oct-Dec in MSEK Revenues ,8% ,1% ,4% 262 7,4% EBITDAR 19 45% % 87-3% 4-91% EBT n.m -3 n.m % -42 n.m Turnaround in Spanair on track Earnings before taxes 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Summary development since the SAS Group takeover Long haul closed down March 22 New availability based pricing model introduced in March 23 Star Alliance member as from April 23 After a tough first quarter 23 Spanair has improved earnings every quarter significantly Spanairs Turnaround measures of MSEK 1 1 well under implementation Group Increased holding in Spanair to 95% 23 financials Revenue increased by 3,8% Unit costs down by 7,1% Charter traffic successively better Spanair joined Star Alliance as from April 23 Result improved by MSEK 345 vs. 22 EBT in Q2 MSEK 86 EBT in Q3 MSEK 238 EBT in Q4 MSEK Number of passengers up 2,% versus 22 Most punctual airline in November January December Operating revenue EBT Fiscal year Fiscal year Fiscal year 23 66

12 Spanair value creation going forward Solid profitability and cash flow is viable as a concequence of excellent cost and efficincy and a business model providing sustainable growth Strong position in Madrid and Barcelona, two of Europé s strongest markets The underdog position provides a long lasting growth perspectiv without getting close to dominant position The twin track strategy with full service and low cost model is essential in order to capitalize on Spanair s position Combining excellent cost and quality/service performance with an innovative and agressiev commercial model, whould provide very good results and value for the SAS Group over the coming years Braathens further strengthened competitiveness Costs to be reduced by MSEK 1 with full effect in 26 To achieve a unit cost of,6 NOK (reduction by 2%) Strengthen competitiveness in relation to low-cost competitors Will enable Braathens to compete at same price levels but still offering network product advantages Future development affected by new unit in Norway Braathens affected by significantly lower yield Yield down 18,9% - partly explained by average longer routes Four new destinations introduced as from March 31st Cabin factor increased by,7 p.p. Substantial cost measures extended to app MSEK 1 with full effect 26 January December Operating revenue EBT Fiscal year Fiscal year Fiscal year Turnaround in Widerøe - weak yield development offset by good cost controll Yield down by over 2% managed by good cost control MSEK 3 in cost improvement measurements under implementation New non stop route to Manchester from Bergen as from December October December Operating revenue EBT Blue1 affected by close down of Tampere airport in July New routes to Helsinki/Berlin and Hamburg from March 24 Increased market shares in weak market Widerøe hit by weak yield development Yield down by 18,8% To implement MSEK 3 in cost improvement measurements January December Operating revenue EBT January December Operating revenue EBT Fiscal year 23 7 Fiscal year Fiscal year 23 72

13 Airline Support Businesses Airline Support Businesses January December (MSEK) 23 pro forma 22 Operating revenues Operating expenses Jan-Sep in MSEK EBITDA EBT Revenues ,3% ,1% ,8% EBITDA % -17 n.m % SAS World Sales moved to Scandinavian Airlines EBIT % -162 n.m 77 n.m Fiscal year Fiscal year Fiscal year Income Business Area Airline Related Business SAS Cargo moved to Business Area Airlines Support Businesses in 22 SMART sold in August 22 January - December MSEK Operating revenues Operating expenses Airline Related Businesses Jan-Sep in MSEK SAS Trading Revenues ,7% % % % EBITDA % -61 n.m % % EBITDA Income before taxes EBT % -87 n.m 16-58% 22 n.m Fiscal year Fiscal year Fiscal year 23 78

14 REZIDOR SAS Hospitality REVPAR under pressure but still better than industry High financial maneuverability 1% 5% % -5% -1% -15% -2% Financials Aircraft CAPEX Liquidity of MSEK 9 66 New Revolving facility MEUR 4 Committed credit facilities MSEK 6 5 Solidity 22% CAPEX holiday going forward Young fleet (average age 8,3 years) Real estates released in fourth quarter of MSEK % Jan Feb Mar Apr May Jun jul Aug Sep Oct Nov Dec REVPAR - Rezidor REVPAR - Market F 25F 26F 27F Additional sources of capital Non-core businesses Fiscal year Fiscal year 23 8 Fiscal year Commited Credit Facilities of MSEK 6 5 MSEK Liquid Funds December Available Credit Facilites: Revolving Credit Facility (MUSD 7) 2 9 Aircraft Finance Lease Facility 2 2 Bi-lateral Facilities 1 Others 4 Total Available Facilities 6 5 Total Available Funds New Revolving Credit Facility of MEUR 4 to refinance the existing evolving Credit facility as from May 24 Fiscal year Clear Targets to Reduce Indebtedness - Long-term Targets established Key figures Dec 3 Sep3 Target Equity/assets ratio (solidity) 22% 22% >3% Financial net debt/ equity 137% 139% <5% Fin. net debt+npv Oplease/ equity 213% 29% <1% Fin. net debt+7* Oplease/ equity 292% 298% <1% Targets will be reached by: Turnaround measures Relesase of main assets: Aircraft Properties Non-core subsidiaries Fiscal year Undervalue in fleet in September by MSEK 351 but neutralized as USD has appreciated to SEK MSEK Surplus value, aircraft Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Fiscal year 23 84

15 Gearing levels peaking Consolidation ahead Reduced CAPEX will improve free cash flow going forward Cash flow January-December 34% 29% 24% 19% % 14% 9% Leverage Ratios Leverage peaking during 23 Clear targets to reduce Leverage MSEK October December Cash flow from operations Change in working capital Net financing from operations Investments, advance payments Acquisition/sale of subsidiaries (net) Sales of fixed assets, etc MSEK January December Cash flow from operations Change in working capital Net financing from operations Investments, advance payments Acquisition/sale of subsidiaries (net) Sales of fixed assets, etc % -1% dec-98 dec-99 dec- dec-1 Dec-2 mar-3 jun-3 sep-3 3-dec Net Debt / Equity Fin Net Debt / Equity Fin. Net Debt + 7*Op lease / Equity Financing deficit/surplus Changes in external financing, net Financing deficit/surplus Changes in external financing, net Fiscal year Fiscal year Fiscal year Weak traffic figures in Scandinavia January update Capacity outlook Group passenger load factor down by 2, p.u. Scandinavian Airlines load factor down by 2,4 p.u Passenger- Seat capacity Cabin- January-December traffic (RPK) (ASK) factor SAS Group Total -1,6% 1,5% 63,5% Intercontinental -1,9% 6,% Europe 6,4% 7,6% Domestic and -13,4% -11,2% Intrascandinavian Group passenger load factor up by,7 p.u. Scandinavian Airlines load factor up by 1,3 p.u Group traffic in Europe up by 6,5% Passenger- Seat capacity Cabintraffic (RPK) (ASK) factor SAS Group Total 1,4%,1% 56,1% Intercontinental 2,% -7,% Europe 6,5% 8,4% Domestic and -7,% -5,5% Intrascandinavian Capacity forecast for 24 vs. 23 Scandinavian Airlines 5% Spanair 6% Braathens 5% Widerøe 18% Blue1 67% Total 7% Fiscal year Fiscal year Fiscal year 23 9

16 APPENDICES Strategic development Traffic Data Yield Unit cost Fleet Financial key figures Baltic strategy Finland and the Baltic region of great strategic importance to the SAS Group The SAS Group increases presence in the Baltic region Fiscal year Fiscal year Increased presence in Finland and in the Baltic region 49% 1% 47% Estonian Air a growing airline in a very interesting region Operating cost level app. 5% below European airlines AirBaltic growing network out of Latvia with similar cost level as Estonian Air Blue1 growing out from Finland with new non-stop routes from Helsinki to Brussels, Geneva and Düsseldorf Introduction of Blue1 expansion in the Finnish market AirBotnia to change identity to Blue1 New international nonstop destinations from Finland - Geneva, Düsseldorf and Brussels. Since 1998 SAS Group has tripled the number of daily flights to and from Finland from 4 to 12, of which Blue1 as from November will operate 12. Baltic countries interesting opportunities in a growing region Growing economies Expected GDP growth in 23/4 Estonia 5,4% / 5,9% Latvia 6,1% / 6,6% Improved domestic purchasing power Inflation under control Estonia 3,3% and Latvia 2,8% Estonia and Latvia to join EU Cost level significantly under Scandinavian countries Local airline cost structure necessary to be able to operate profitable to/from region Fiscal year Fiscal year Fiscal year 23 96

17 AirBaltic growing based on efficient production platform SAS Group ownership 47% Transported 262 passengers in 22 Efficient production platform Pilot block hours 8 in 22 Cabin block hours 74 in 22 Two class product to 14 destinations 3 destinations opened in 23 Participates in Euro Bonus program Fiscal year Yield development 23 vs 22 Scandinavian Airline Total Scheduled Jan-Dec Change Yield (öre/rpk) 119,5 142,2-16,% Currency adj. yield 119,5 136,6-12,5% Oct-Dec, Q Change Yield (öre/rpk) 116, 139,4-16,8% Currency adj. yield 116, 131,3-11,6% Fiscal year Yield development 23 vs 22 Yield, local currency October-December January-December -6,1% -4,6% -18,3% -18,9% -12,8% -18,8% -28,8% -25,% Fiscal year Unit Cost October-December 23 vs 22 Unit Cost (adjusted) January - December 23 vs 22 Yield Development January December 23 vs 22 Share of Cost analysis Q4 22 Q4 23 Var% total var % Personnel ,2% -3,% Fuel ,5% -,1% Gov. Charges ,6%,2% Selling cost ,4% -3,4% Ground Services ,3% -,6% Technical ,6% -6,6% Other operating costs ,5% -4,3% TOTAL OPERATING EXPENSES ,% -17,8% Aircraft costs ,% -,5% ADJUSTED EBIT ,4% -18,4% Volume = average decrease in ASK: -,5% Share of Cost analysis JAN-DEC 2 JAN-DEC 3 Var% total var % Personnel ,5% -,1% Fuel ,4%,5% Gov. Charges ,3% -,5% Selling cost ,% -3,1% Ground Services ,5% -1,6% Technical ,2% -1,6% Other operating costs ,6% -4,6% TOTAL OPERATING EXPENSES ,8% -11,1% Aircraft costs ,2%,% ADJUSTED EBIT ,1% -11,1% Volume = average decrease in ASK: -2,2% (currency adjusted) 1,% -1,% -3,% -5,% -7,% -9,% -11,% -13,% Fiscal year 23 1 Fiscal year Fiscal year 23 12

18 Yield Development Q2 22 Q4 23 (currency adjusted) 2% % -2% -4% -6% -8% -1% -12% -14% -16% 2nd Quarter 22 3rd Quarter 22 4thQuarter 22 1st Quarter 23 2nd Quarter 23 3rd Quarter 23 4th Quarter 23 Yields are under pressure from negative class mix /route mix Passenger Yield January-December 23 vs 22 Nominal Currency Adjusted Route Sector yield effect yield Scandinavian Airline Intercontinental Europe Intrascandinavian Denmark* Norway Sweden Passenger Yield 4 th Quarter 23 vs 22 Nominal Currency Adjusted Route Sector yield effect yield Scandinavian Airline Intercontinental Europe Intrascandinavian Denmark Norway Sweden *) Incl Greenland 22 Fiscal year Fiscal year Fiscal year Key airline profitability drivers January-December 23 vs 22 Key airline profitability drivers 4th Quarter 23 vs 22 Severe Revenue Pressure Passenger revenues down MSEK Traffic growth (RPK) down 5,6% Cabin Factor down 2,2 p.u. Yields down 12,5% Unit costs incl A/C cost down 11,1% Traffic growth (RPK) down 2,4 % Cabin Factor down 1,2 p.u. Yields down 11,6% Unit costs incl A/C cost down 19, % January-December 23 Revenues MSEK - 2,7 % Volume - 5,6% Yields - 12,5% Currency -4,% Fiscal year Fiscal year Fiscal year 23 18

19 Passenger load factor Moving 12 months values Weaker USD offset by increased yield pressure Currency Effects SAS Group January-December 23 vs 22 69% 68% 67% 66% 65% 64% 63% DEC94 DEC95 DEC96 DEC97 DEC98 DEC99 DEC DEC1 DEC2 DEC Dollar position gradually hedged Positive effect on operation costs Q4 by 152 MSEK Weak USD => increased yield pressure MSEK JAN-DEC Total revenues -2 7 Total costs Forward cover costs & working cap. +11 Income before depr Financial items +282 Income before tax Fiscal year Fiscal year Fiscal year Currency Effects SAS Group January-December 23 vs 22 Total revenues & costs: (Total +815 MSEK) Major approx. effects: USD DKK +1 NOK -393 EUR -6 Asian curr All others -28 Forward cover costs: (Total +123 MSEK) Working capital: (Total -112 MSEK) Financial items: (Total +282 MSEK) Grand total MSEK Currency Effects SAS Group October-December 23 vs 22 MSEK OCT-DEC Total revenues Total costs Forward cover costs & working cap Income before depr. +4 Financial items -81 Income before tax -41 Currency Effects SAS Group October-December 23 vs 22 Total revenues & costs: (Total +152 MSEK) Major approx. effects: USD +435 DKK +12 NOK -185 EUR -12 Asian curr. -48 All others -5 Forward cover costs: (Total -49 MSEK) Working capital: (Total -63 MSEK) Financial items: (Total -81 MSEK) Grand total +-41 MSEK Fiscal year Fiscal year Fiscal year

20 Currency distribution in the SAS Group 23 Balance Sheet NOK 33% Revenues SEK 19% GBP 4% USD 8% Others 5% DKK 9% EUR 22% SEK 17% NOK 25% Expenses GBP 2% USD 25% Others 1% EUR 15% DKK 15% Financial key figures and aircraft fleet data MSEK 31DEC3 31SEP3 31DEC2 Liquid funds Other interest-bearing assets Aircraft Other assets Total assets Operating liabilities Interest-bearing liabilities Subordinated debenture loan Deferred tax Minority interests Equity Total liabilities and equity Financial net debt Fiscal year Fiscal year Fiscal year SAS Group Equity / Assets Ratio SAS Group Financial Net Debt / Equity Ratio SAS Group Development of net debt % 45% 4% 35% 3% 25% 2% 15% 1% 5% % Including parent company from January, 2. Including Braathens from December, 21 and Spanair from March, 22. 2,5 2,3 2, 1,8 1,5 1,3 1,,8,5,3, Including parent company from January, 2. Including Braathens from December, 21 and Spanair from March, 22. MSEK Average 2 Average Average 3 Average 96 Average 98 Average 1 Average 97 Average 99 Average 94 Average 95 Average 93 MSEK 5.45 MSEK MSEK 2.35 MSEK 2.9 MSEK 9.15 MSEK 19.1 MSEK 2.15 MSEK 6.75 MSEK 9.7 MSEK 4.95 MSEK Including parents company from January,2 Including Braathens from December, 21 and Spanair from March, 22. Fiscal year Fiscal year Fiscal year 23 12

21 SAS Group fleet as of Dec 31, 23 Leased Out Owned Leased In Total On Order Airbus A33/A Airbus A321/A Boeing Boeing Boeing Douglas MD-81/82/83/ Douglas MD Avro RJ-85/1 9 9 Fokker F Fokker F dehavilland Q1-Q SAAB Total Company Owned Leased Total Leased On Order In Out Scandinavian Airlines Spanair Braathens Wideroe Blue Total Limited CAPEX SAS Group Firm Order CAPEX MUSD 348 Firm Aircraft Orders Total as per Dec 31, 23 Airbus A Airbus A32/ Boeing TOT No. of A/C CAPEX (MUSD) % 4% 3% 2% 1% SAS financial position adequate Strengthening ahead % Equity / Total Assets dec- 98 dec- 99 dec- dec- 1 Dec- 2 mar- 3 jun-3 3- sep 3- dec Equity MSEK Equity ratio 22% Financial net debt MSEK Fin net debt/ equity 138% Fiscal year Fiscal year Fiscal year SAS Group Financial Net January December 23 (MSEK) Difference Interest net and others Exchange rate differences Financial net (in % p.a. of average financial net debt) -3,1% -5,3% +2,2% SAS Group - Development and Break Down of Financial Net Debt (MSEK) Difference Cash Other interest bearing assets Interest bearing liabilities Financial Net debt SAS share Fiscal year Fiscal year Fiscal year

22 Development of Market capitalization SAS share price vs. Peers Increased trade in the share nov-3 aug-3 maj-3 feb-3 nov-2 aug-2 maj-2 feb-2 nov-1 aug-1 maj-1 feb-1 nov- aug- maj- feb- nov-99 aug-99 maj-99 feb SAS Market Capitalization vs. European Peers* measured in SEK (December31, 22 - December 31, 23) Index Peers Index SAS 5 1- jan-3 1- feb-3 1- mar-3 1- apr-3 1- maj-3 1- jun-3 1-jul aug-3 1- sep-3 1- okt-3 1- nov-3 1- dec-3 134,9 127,2 Number of shares traded in SAS per month January February March April May June July August September October November December * Peers: Alitalia, Air France, British Airways, Finnair, KLM, Lufthansa &Rynair Fiscal year Fiscal year Fiscal year and at Stockholm Stock Exchange Average daily number of shares traded in Stockholm per month January February March April May June July August September October November December Fiscal year 23 13