Norwegian (NAS) Q Bjørn Kjos (CEO) Oslo, 26 October 2006

Transcription

1 Norwegian (NAS) Q Bjørn Kjos (CEO) Oslo, 26 October 2006

2 Strong revenue growth in Q3 878 MNOK revenue in Q Revenue growth of 49 % since Q MNOK revenue Q3 03 Q3 04 Q3 05 Q3 06 Revenue Earnings after tax EPS 1,91-0,61 3,54 2,74 2

3 Profitable quarter EBITDA of 54 MNOK in Q ( 64 MNOK ) Earnings after tax 28 MNOK ( 44 MNOK ) EBITDA development ex Poland start up 77 Poland operation weakens margin by MNOK Q3 03 Q3 04 Q3 05 Q Revenue EBITDA MNOK EBITDA margin % -12 % -3 % 11 % 6 % 3

4 Cash flow fluctuation due to seasonality Negative cash flow from operation of MNOK Cash and equivalents 387 MNOK ( +200 MNOK credit line) Investments related to IT-systems and upgrades on aircraft Operating activities MNOK Q1 Q2 Q3 Q4 CASH FLOW (TNOK) Third quarter From: Operating activites Investments Financial activities Net change Opening balance Closing balance

5 Capacity growth on track 64 % increase in production from Q305 to Q306 Load factor leveling out at 85 % M ASK Load factor 100 % 95 % 90 % 85 % 80 % 75 % 70 % 65 % 60 % % 0 Q3 03 Q3 04 Q3 05 Q % Q3 03 Q3 04 Q3 05 Q3 06 5

6 Strong passenger growth 70 % passenger growth on international routes 1.5 million passengers last three months Thousand pax % % % Q2 03 Q3 04 Q3 05 Q *Tickets sold for travel

7 Enhanced competitive position 38 % market share on key domestic routes, 7 pp growth Capacity increased by 64 % since Q305 % Market Share 45 % 40 % 35 % 30 % 25 % 31 % 39 % 34 % 42 % 28 % 35 % 29 % 34 % 20 % Bergen Trondheim Stavanger Tromsø Q3 05 Q3 06 7

8 Continued growth in business segment 83 % growth in business passengers since Q305 Adequate timetable and flexible tickets is attracting the business segment Business travellers Q3 04 Q3 05 Q3 06 8

9 Strong revenue growth, domestic and international Domestic turnover increased by 30 % since Q International turnover increased by 85 % since Q Poland UK Scandinavia Other Europe Sothern Europe Domestic Q305 Q306 9

10 Poland expansion on track Production adjustments made quickly after launch Load factor ranging from 63 to 73 % first 3 months, showing demand for low fare travel Stronger presumption than start up in Norway 80 % 75 % Load factor development 1,30 1,20 1,10 CASK development 70 % 1,00 65 % 0,90 0,80 60 % 0,70 55 % 0,60 50 % 0,50 0,40 45 % 0,30 40 % 0,20 Norwegian first 9 months Polen first 3 months Norwegian first 9 months Polen first 3 months 10

11 Still a guarantor for low fares Domestic prices are down 5 % Q306 compared to Q305 Implementation of a new revenue systems hampered yield during Q3 International prices are down from heavy expansion and introductionary pricing Norwegian's average ticket price - index (Q1 03 = 100) Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q306 Domestic International 11

12 Cost development Unit cost of 0.49 NOK in Q3 06 Cost level affected by higher fuel prices and one offs CASK 0,52 0, One offs Wet lease Passenger service costs Termination cost on handling Extra crew costs 0.02 Fuel 0, ,4 Q305 Q306 12

13 Cost initiatives are materialising Getting closer to NOK 0,45 target set in 2004 CASK 0,52 0,48 Cost reducing initiatives : New handling contract Capacity increase Distribution costs Costs are down Average unit costs of 0.50 NOK in Q3 2004, down more than 30 % from Q (0.75 NOK) Scale benefits from increased production and longer sector lengths, have been main drivers Cost effective distribution solutions, renegotiated supplier agreements and higher fleet and crew utilization, will bring costs even further down 0,44 NOK/ASK -33% 0,90 0,80 0,70 0,60 < 0,50 0,50 0,40 0,30 0,20 Q3 03 Q4 03 Q1 04 Q2 04 Q3 04 Q Target < 0, Target 0,4 Q305 Q

14 Lower distribution costs Distribution costs per sold ticket of NOK 14.8, down from 21.4 NOK Joint partnership with Amadeus is proven efficient Distribution costs per sold ticket NOK pr pax 40,0 35,0 30,0 25,0 20,0 15,0 10,0 5,0-31 % Q3 04 Q3 05 Q

15 Increased fleet and crew utilization Crew utilization of 794 block hours per crew per year, up 11 % from Q (714) Aircraft utilization of 11,5 block hours per plane per day, up 16 % from Q (9,9) Block hours/crew/year Block hours/plane/day Q3 04 Q3 05 Q3 06* 6 Q304 Q305 Q * Annualized

16 Lean organization Carrying approx 10,000* passengers per employee Approx 40 % growth since Q Passenger per employee Q304 Q305 Q306 0 Ryan Air Easy Jet Norwegian Air Berlin Fly Me Sky Europe Pax pr employee* Nas Q * Annualized

17 Norwegian Student Academy Two years apprentice program in the tourist industry, supported by the Norwegian authorities Certificate of apprenticeship that leads to job opportunities ie in sales, marketing, station or cabin attendence 17 Foto Olav Stendal

18 Expectations for remaining 2006 Expected business environment: Increased competition on international routes Continued price competition on domestic northbound routes Expected results: Unit cost for 2006 in the area of NOK 0,54 At current fuel and currency levels, and flight program in Poland Guidance for improved margin vs 2005 removed due to slower yield development on new routes Increased effect from cost reducing initiatives Expected results Poland start up: Flight program will continuously be monitored in order to obtain profitable operation as soon as possible Warsaw base is not expected to be profitable in 2006 and H1 2007, due to start up costs and introductory pricing 18

19 Leading Scandinavian low fare airline 84 routes