SAS Q4 2015/2016. EBT in line with forecast. Q4 in summary. Change vs. LY

Transcription

1 SAS Q4 2015/ EBT in line with forecast Q4 in summary Progress in Q4 FX adjusted passenger revenue up by 1% Other traffic revenue up 25% Cost program delivered SEK 0.2bn Passengers up 300,000 and record load factor but market has become more challenging Yield declined 9% in Q4 vs. LY Norwegian aviation tax of SEK 0.2bn Negative currency effects of SEK 0.4bn Negative non-recurring items of SEK 0.4bn Further actions for long-term competitiveness Q4 MSEK 577 9,741 EBT Traffic, RPK in millions Unit cost, SEK PASK, SEK Change vs. LY MSEK % -6.5% -7.7% 2 1

2 Staying true to our vision of making life easier for Scandinavia s frequent travelers SAS strategy can be summarized as: Focus on Scandinavia s frequent travelers investments in customer offering and loyalty program Flexible production platform to fit the needs of our frequent travelers SAS Star Alliance 118 destinations 1,300 destinations 813 daily departures 18,450 daily departures 3 Improved customer offering Long haul operation expanded from 12 to 16 aircraft New cabin interior on all aircraft New destinations and more frequencies Short & medium haul enhancements >60 seasonal routes within Europe Upgrade of cabin interior initiated SAS Go Light and SAS Plus Saver Improvements on the ground Investments in SAS lounges New Service Point centers Investments in digital platform New mobile and web platform being rolled out High speed WiFi to be introduced in ,000 EuroBonus members in 3 rd most downloaded airline app in Europe +900,000 passengers in +9% increased traveling by EB Silver/Gold customers in +22% more passengers on SAS long haul flights in 4 2

3 Increased flexibility in the production model 50% more passengers on SAS s wet lease aircraft in 14 line stations outsourced in Norway in +6% increased aircraft utilization in Improvement of SAS (SK) operation 2 aircraft types improved aircraft utilization 1 st Airbus A320neo delivered 12 more aircraft to be delivered during FY17 Increased wet lease operation Focus on fewer strategic suppliers and closer partnerships 8 CRJ900 phased into traffic 4 additional CRJ900 to be delivered in FY17 80% of passengers with bags used selfservice options in Scandinavia in 37 more routes served with wet lease operation Streamlining of Ground handling and technical maintenance Outsourcing of line stations in Norway Digitalization of ground handling Introduction of lean processes at OSL/CPH Focus on reduced unscheduled down time (UDT) 5 in line with our guidance Guidance Capacity up 10% Outcome Capacity up 10% Expansion of long-haul operation and upgrade of product Launch of Boston, Los Angeles and Miami and more frequencies on existing routes Lower yield and intensified competition Yield down 7.7% Lower unit cost Investments in digitalization Unit cost (FX adjusted) ex. jet fuel down 4.1% New web site is currently being rolled out further improvements underway Positive EBT before nonrecurring items EBT before nonrecurring of MSEK

4 SAS has a unique position in an attractive market Strong customer offering Superior network most departures and direct flights from Scandinavia Competitive product features, e.g. lounge, fast track, self service, SAS app Leading loyalty program >4.7 million EuroBonus members (and growing) Flexible production platform 2-tier production platform allows for flexible and efficient operations Ongoing digitalization and automation throughout the travel chain Increased flexibility in cost structure through outsourcing Significant future potential Take part in growing leisure market in Europe Address unserved long-haul destinations with direct capacity Capitalize on SAS Brand and EuroBonus to realize further potential, e.g. SAS Dreams 7 but further actions needed for long-term competiveness Yield pressure Intensive competition and increasing market capacity particularly on European routes Taxes & charges New aviation tax introduced in Norway Sweden is also considering a new aviation tax 8 Remaining legacy Cost gap vs. newly established competitors not fully addressed need to address remaining legacy Currency & jet fuel Exposure towards unfavorable currency and jet fuel price development Capital need Maturing loans and financing needs for aircraft 4

5 Improved competitiveness - road map for FY17 and beyond SEK 1.3bn Completed Fleet streamlining and production improvements Simplified agreement for pilots Enhancements of admin & sales 300 FTE reduction Outsourcing and efficiency enhancements of ground Properties and rental costs SEK 1.5bn Initiated activities Increased ambition by SEK 0.7bn Targeted areas - Operations, charges & fuel - Ground Handling - Technical Maintenance - Administration & Commercial 1 2 Value TBD Under development a) Reduce admin b) Optimize customer cost c) Establish long-term competitive operating platform FY15 - FY17 FY19 FY Initiated activities of SEK 1.5bn in FY17- FY19 Earnings impact FY17 FY19 Operations, charges, fuel Ground Handling Improve planning and productivity Completion of two tier production model Improved inflight logistics Digitalization and automation Increased productivity from collective agreements Centralization of Passenger Control Centre MSEK 600 MSEK 100 Technical maintenance Lean process implementation at CPH/ARN Improved planning from new IT system MSEK 300 Admin & Commercial Close down and consolidation of legacy IT systems Transition to cloud solutions Distribution channels shift MSEK

6 KPIs KPIs 2a Improve transparency and reduce overhead costs Management & supporting functions Product, Customer, Brand, Digitalization and Governing functions Group EBIT; Admin cost/revenue; Brand & Customer KPIs Supporting functions: HR, IT, Financial Services Cost/Service SK Tech Ground Handling Cargo Wet lease Cost/ Block hour Cost/ Airborne hour Cost/ Landing Cost of Sales Cost/ Block hour Operational performance based on safety and quality Air transport services Airline supporting services (operational character) External companies 11 2b SAS has improved its commercial position, but there is a need to optimize commercial cost Trends affecting SAS customer proposition Growing number of leisure travelers Price sensitive and value services differently than business travelers Converging service offering LCCs introduce additional features Full service carriers unbundle their product offering Differentiation of SAS through further digitalization, IRR and improvements of EuroBonus Transformation of SAS commercial cost (illustrative) 1 2 Direct Indirect Today Future SAS will further optimize its customer offering 1 Reduce 2 indirect cost Re-allocate cost to prioritized areas 12 6

7 2c Need to further transform operational platform to secure competitiveness European traffic is subject to intense competition High LCC density Price sensitive leisure segment is growing rapidly SAS is the only airline operating with Scandinavian based crew within Europe significantly higher labor cost SAS needs to explore new alternatives for European traffic production unit outside Scandinavia to be evaluated LONDON 26 avg. labor cost/h UK 43 avg. labor cost/h 1) SCANDINAVIA 6.5 million pax/year ~90 daily departures 5 operating airlines 25 avg. labor cost/h EU Note: Source: 1) Simple average for Denmark, Sweden and Norway Labour costs in the EU, Eurostat, April 2016 (Labour costs per hour in, whole economy, including non-wage costs such as employers' social contributions) 13 SAS beyond 2020 Expanded Intercont with more aircraft Flexible and cost-efficient Operations through internal/external resources Sharp Commercial offering with focus on prioritized areas Strong Short-haul with new point-topoint destinations Transparent and efficient Governance structure Broader Business scope EuroBonus, Digital and Lifestyle Shareholder value creation 7

8 FINANCIALS 15 Breakdown of the income statement Income statement Aug-Oct 16 Aug-Oct 15 Change vs LY Currency Total operating revenue 11,135 10, Payroll expenditure -2,154-2, Jet fuel -1,959-1, Government charges -1,128-1, Other operating expenditure -3,859-3, Total operating expenses* -9,100-8, EBITDAR before non-recurring items 2,035 2, EBITDAR-margin* 18.3% 23.2% -4.9 p.u. Leasing costs, aircraft Depreciation Share of income in affiliated companies EBIT before non-recurring items 1,044 1, EBIT-margin* 9.4% 13.3% -3.9 p.u. Financial items EBT before non-recurring items 941 1, Non-recurring items EBT * = Before non-recurring items 16 8

9 Non-recurring items in Q4 Non-reuccring items MSEK Impairments -11 Restructure costs -31 Capital gain, aircraft 57 Facilities 31 Aircraft 26 Other non-recurring items -379 Provision indirect tax -219 Phase out and write down CRJ Other -49 Total non-recurring items Revenue analysis Total Revenue Q4 MSEK Estimated based on average yield in Q4 FY , , ,135 Total revenue Q4 FY15 Currency Total revenue Q4 FY15 Scheduled capacity change Total load factor Yield Other traffic revenue Other operating revenue Total revenue Q4 +9.4% +1.0 p.u. -9.0% 18 9

10 Operating expenses analysis Total Operating Expenses Q4 MSEK -8, , ,455 Total operating expenses, Q4 FY15 Currency Operating expenses Q4 FY14 Fuel ex currency, volume Volume Cost efficiency program Inflation Other Operating expenses Q4 19 Breakdown of payroll expenses Payroll expenses significantly reduced New pension and remuneration agreements in November 2012 Outsourcing significant parts of operation and administration Increased productivity in all areas Opportunities going forward Digitalization and automation of operation on the ground and administration and where possible also for flying personal Payroll expenses excl. restructuring costs (MSEK) -21% Pilots Crew Tech Ground Admin 11,502 2,979 (26%) 2,087 (18%) FY12 9,071 2,489 (27%) 1,199 (10%) 1,647 (18%) 943 (10%) 3,168 (28%) 2,700 (30%) 2,069 (18%) 1,292 (14%) Avg. number of FTEs 13,649 Pilots 1,340 (10%) Crew 2,599 (19%) Tech 1,500 (11%) Ground Admin 5,621 (41%) 2,589 (19%) FY12-22% 10,710 1,300 (12%) 2,574 (24%) 1,110 (10%) 4,210 (39%) 1,516 (14%) 20 10

11 Jet fuel costs up MSEK 195 in Q4 Fuel cost Q4 MSEK -1, , ,959 Q4 FY15 Currency Curr. adj. Q4 FY15 Volume Price Hedging & time value Other Q4 21 Jet fuel and currencies Jet fuel Hedge position as at 31 October % of expected jet fuel consumption hedged in FY17 Currency Policy to hedge 40-80% of expected currency deficit/surplus next 12 months Negative currency effect of SEK 1.7bn in Stronger USD Weak NOK Working capital revaluation Jet fuel cost sensitivity FY17, SEK bn* Average spot price 8.0 SEK/USD 9.0 SEK/USD 10.0 SEK/USD USD 400/MT USD 600/MT Currency hedges* 53% of USD hedged in FY17 66% of NOK hedged in FY17 * Based on hedge position as at 31 October 2016 Max jet fuel price Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 $ /MT 59% 48% 52% 21% 22 11

12 Stable liquidity but lower equity ratio Financial preparedness 40% 37% 40% 39% 41% Financial preparedness at 41% Cash position at SEK 8.4bn Unutilized credit facilities of SEK 3.5bn Q4 FY15 Q1 Equity ratio Q2 Q3 Q4 SEK 6.0bn in equity Revaluation of pensions due to lower discount rates affected equity negatively in by SEK 1.6bn 21% 16% 15% 17% 19% Q4 FY15 Q1 Q2 Q3 Q4 23 Financing costs and capex Focus on reducing high financing costs Review capital structure Alternative financing possibilities Optimize financing of aircraft 8 more aircraft on balance sheet vs. LY Interest expenses on financial liabilities, SEK bn Capex disciplin Non-aircraft investments at SEK ~ 0.5bn/yr Increased aircraft investments in FY15- Pre-delivery payments and buy-back of operating leased aircraft Net investments in FY17 at SEK ~1 bn Purchase of operating leased aircraft Pre-delivery payments of aircraft 4 CRJ900 deliveries in FY17 on wet lease basis Deferred delivery of Airbus A350 FY13 Net capital expenditure, SEK bn FY13 FY14 Aircraft, spare parts Non-aircraft FY14 FY FY

13 Outlook FY17 and upcoming highlights High market uncertainty Volatile currency and jet fuel prices Geo-political uncertainty Introduction of aviation taxes Assumptions for FY17 SAS to increase ASK by 6-8% Lower PASK and unit cost Efficiency program to deliver SEK 0.7bn Higher jet fuel costs Implement structural actions Digitalization: -New website - EB platform Outlook FY17 SAS expects to post a positive EBT before non recurring items Higher jet fuel costs and weaker earnings in Q1 12 Airbus A320neo to be delivered in FY

14 SAS strategy is to focus on Scandinavia s frequent travelers Typical low cost carrier strategy Strategy of SAS Market Operational platform Multimarket focus, general low yield, especially leisure One type fleet, operate traffic flows that fit fleet Focus on Scandinavia s frequent travelers Fleet designed to fit best network and schedule for customers Growth New destinations, anywhere Improve offer for primary customer base to increase loyalty 27 Appendices Fleet & productivity Unit revenue (yield & PASK) & Unit cost Traffic & capacity outlook Financial update Currency & Fuel 28 14

15 SAS fleet October 2016 Aircraft in traffic under SK traffic license Age Owned Leased Total Firm order Airbus A330/A340/A Airbus A321/A320/A Boeing 737 NG Total Lease order Aircraft in service under a license other than SAS s (SK) Age Owned Wet lease Total Wet lease order Boeing BBJ Bombardier CRJ ATR Total Leased/phased out aircraft Owned Leased Total In service Parked Bombardier Q Bombardier CRJ SAS investing in renewal and simplification of the aircraft fleet Current fleet in traffic with SK traffic license, 31 October 2016 New orders 16 Airbus A330/A340 8 Airbus A330E/350 Long-haul 29 Airbus A320neo Short/medium-haul 26 Airbus A320 family Firm order aircraft deliveries as at 31 Oct Boeing 737 NG Airbus A350 Airbus A320neo 5 FY17 FY18 FY19 FY20 FY

16 jan-08 jul-08 jan-09 jul-09 jan-10 jul-10 jan-11 jul-11 jan-12 jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 jan-08 jul-08 jan-09 jul-09 jan-10 jul-10 jan-11 jul-11 jan-12 jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Productivity development Aircraft utilization (12 months rolling) Hrs/day 10,0 9,5 9,0 8,5 8,0 7,5 7,0 6,5 6,0 5,5 5,0 Cabin, pilot utilization (12 months rolling) Hrs/yr Capacity reduction initiated Pilots Cabin crew Block hours, 12 months rolling, October 2016 Aircraft, hours/day Pilots, hours/year Cabin, hours/year SAS Appendices Fleet & productivity Unit revenue (yield & PASK) & unit cost Traffic & capacity outlook Financial update Currency & Fuel 32 16

17 Yield and PASK development Yield, SEK Currency adj Aug-Oct Nov-Oct PASK, SEK currency adj Aug-Oct Nov-Oct -9.0% -7.7% -7.7% -8.0% 33 Long term yield and passenger load development Load Factor Yield (SEK) 80% 70% 60% January 2005 January 2006 Yield (12 months rolling) January 2007 Load Factor (12 months rolling) January 2008 January 2009 January 2010 January 2011 January 2012 January 2013 January 2014 January 2015 January ,35 1,30 1,25 1,20 1,15 1,10 1,05 1,00 0,95 0,

18 Quarterly yield development Scandinavian Airlines, currency adjusted yield vs last year 20,0% 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% -15,0% -20,0% -6,3% -14,3% -15,6% 1,2% 7,8% -0,6% -0,6% 1,2% 1,9% -7,8% 16,0% 15,4% 9,2% 8,3% 5,6% 3,8% 2,7% 2,9% 1,0% 0,1% -6,0% 0,6% -1,3% -2,3% -2,3% -4,3% -4,0%-2,7% -6,6% -8,2%-7,6% -6,7% -9,4% -11,4% 3,1% 2,7% 1,8% 1,6% 2,7% -0,6% -3,1% -4,1% -5,6% -9,8% -10,6% 8,8% 6,1% -1,5% -5,1% -7,8% -9,0% -9,2% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Oct Q Q Q 2012 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Note: Including Blue1 from March Capacity and FTE Capacity ASK total, millions 9.4% SAS FTEs % Aug-Oct 2015 Aug-Oct 2016 Aug-Oct 2015 Aug-Oct

19 Quarterly unit cost development Scandinavian Airlines, currency adjusted unit cost excluding fuel vs last year 10% 5% 0% -5% -10% -15% -20% Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Note: Including Blue1 from March Breakdown of unit cost, Aug-Oct 2016 SAS, SEK, currency adjusted Unit cost breakdown Aug 2015 Oct 2016 Aug 2014 Oct 2015 Var, % Share of total var, % Payroll expenses Jet fuel Government user fees Selling and distribution costs Handling costs Technical aircraft maint. Net other operating expenses -2,143-1,959-1, ,425-1,948-1, % +0.6% -7.5% -19.2% +12.1% -8.8% +19.5% -2.9% +0.1% -1.0% -1.6% +0.8% -0.8% +1.0% Total operating expenses -7,928-8, % -4.4% Leasing costs for aircraft Depreciation % -32.4% -0.5% -1.6% Adjusted EBIT -8,946-9, % -6.5% 38 19

20 Breakdown of unit cost, Nov- Oct 2016 SAS, SEK, currency adjusted Unit cost breakdown Nov 2015 Oct 2016 Nov 2014 Oct 2015 Var, % Share of total var, % Payroll expenses Jet fuel Government user fees Selling and distribution costs Handling costs Technical aircraft maint. Net other operating expenses -9,042-6,449-4,106-2,369-2,477-3,326-2,349-10,204-9,534-4,423-2,756-2,182-2,961-1, % -32,4% -7.2% -14,0% +13,5% +9,3% +27,0% -3.0% -8,0% -0.8% -1,0% +0.8% +0,7% +1.3% Total operating expenses -30,029-33,910-11,4% -10,1% Leasing costs for aircraft Depreciation -2,840-1,312-2,932-1, % -18,5% -0.2% -0.8% Adjusted EBIT -34,181-38,452-11,1% -11,1% 39 Summary of key drivers SAS Q1 2014/15 Q2 2015/16 Q3 2015/16 Q4 2015/16 Scheduled traffic (RPK) +9.6% +7.9% +9.8% +10.8% Passenger load factor -1.7p.u. -1.8p.u. +1.3p.u p.u. Passenger yield -7.8% -9.2% -5.1% -9.0% Total unit revenue (PASK) -10.0% -11.5% -3.5% -7.7% Total unit cost (excluding fuel) -6.6% -1.3% -0.3% -8.3% 40 20

21 Appendices Fleet & productivity Unit revenue (yield & PASK) & Unit cost Traffic and capacity outlook Financial update Currency & Fuel 41 SAS geographical traffic development in Q4 Total scheduled traffic, Q4 RPK +10.9% ASK +9.4% Passengers +3.4% PASK -7.7% Domestic RPK +4.4% ASK -0.3% Passengers +3.3% Intercontinental routes RPK +27.8% ASK +26.0% Passengers +24.8% Europe/Intrascandinavia RPK +1.0% ASK +2.5% Passengers +1.3% 42 21

22 jan-12 mar-12 may-12 jul-12 sep-12 nov-12 jan-13 mar-13 may-13 jul-13 jul sep 13-nov jan-14 mar-14 may jul 14-sep Nov-14 Jan-15 Mar-15 May-15 July-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 SAS passenger development Scheduled passenger, 12 months rolling (Million) SAS grows its long-haul operation to Capital efficient expansion from 12 to 16 aircraft More frequencies on existing routes New routes to Hong Kong, Los Angeles, Miami and Boston BOS EWR IAD MIA ORD SFO LAX OSL CPH ARN NRT PEK PVG HKG Capacity increased in by 27.6% Destinations and an attractive product for the frequent traveler BOSTON HONG KONG Stockholm Hong Kong 5 days a week Book at flysas.com A

23 Market seat capacity Supply and demand in Scandinavia, vs LY FY15 FY17 Seats Passengers 2% 1% 1% 1% 2% 1% 4% 7% 7% 7% 6% 3% 5% 3% 4% 2% -1% -3% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 45 Source: Innovata Schedule data ASK outlook for financial year 2016/2017 ASK outlook for November 2016 October 2017 SAS scheduled +6% to +8% Number of flights Circa +2% 46 23

24 Appendices Fleet & productivity Unit revenue (yield & PASK) & Unit cost Traffic & capacity outlook Financial update Currency & Fuel 47 Financial targets The SAS Group s overriding goal is to create value for its shareholders* Financial preparedness Cash & unutilized credit facilities / Fixed cost >20% (70 days) To reach this, SAS pursues three strategic priorities to meet trends and industry developments, ensure competitiveness and create the prerequisites for longterm sustainable profitability, in line with previously announced financial targets

25 Income statement Nov 2015 Oct 2016 Income statement Nov15-Oct 16 Nov14-Oct15 Change vs LY Currency Total operating revenue 39,459 39, Payroll expenditure -9,071-9, Jet fuel -6,449-8,430 +1,981 Government charges -4,106-4, Other operating expenditure -14,320-11,939-2,381 Total operating expenses* -33,946-33, ,117 EBITDAR before non-recurring items 5,513 5, ,689 EBITDAR-margin* 14.0% 14.4% -0.4 p.u. Leasing costs, aircraft -2,840-2, Depreciation -1,312-1, Share of income in affiliated companies EBIT before non-recurring items 1,400 1, ,766 EBIT-margin* 3.5% 4.2% -0.7 p.u. Financial items EBT before non-recurring items 939 1, ,741 Non-recurring items EBT 1,431 1, ,741 * = Before non-recurring items 49 Overview of credit facilities October 2016 Available funds, SEK billion Oct 2016 Maturity Undrawn portion of credit facilities Revolving Credit Facility, MEUR 150 Credit Facility, MUSD 137 & 27 Credit Facility, MUSD 49 PDP Credit facility, MUSD 36 & 46 Credit facility, MUSD 75 Others, MUSD Jan 2019 Jun 2018, Oct 2017 Sep 2021 Feb 2017, Jun 2018 Jan 2023 Feb 2020 Total undrawn credit facilities Total credit facilities Drawn portion of credit facilities Undrawn portion of credit facilities

26 Cash seasonality Seasonality of SAS cash flow from operating activities, MSEK Cash flow from operating activities strongest in Q2 and Q4 Seasonality has increased Leisure travelling generates a higher degree of early bookings Business bookings closer to departure Q1 Q2 Q3 Q4 51 Amortization profile Scheduled amortization profile as of 31 October 2016, SEK billion >

27 Gearing ratios 450% 350% Fin Net Debt / Equity Equity / Total Assets Fin. Net Debt + 7*Op lease / Equity 250% 150% 50% -50% -150% dec-98 dec-02 dec-03 dec-04 dec 06-dec 07-dec 01-dec 09-dec 10-dec dec-11 Oct-12 Oct-13 Oct-14 Oct-15 Sep SAS Group Financial Net November- October MSEK Aug 16 Oct 16 Aug-Oct 15 Difference Interest net and others Exchange rate differences Financial net MSEK Nov 15 Oct 16 Nov 14 Oct 15 Difference Interest net and others Exchange rate differences Financial net

28 Development and Break Down Financial Net Debt MSEK 31 Oct Oct 2015 Difference Cash Other interest bearing assets Interest bearing liabilities 8,370 2,676-9,880 8,198 2,273-9, Financial net debt +1, Development of financial net debt as reported on a quarterly basis 56 28

29 Equity / Assets Ratio as report on a quarterly basis 57 Financial Net Debt / Equity as reported on a quarterly basis 58 29

30 Appendices Fleet & productivity Unit revenue (yield & PASK) & Unit cost Traffic & capacity outlook Financial update Currency & Fuel 59 Breakdown of currency effects SAS Group Total revenues & costs currency effects Aug-Oct 2016 vs LY Nov 2015-Oct 2016 vs LY Total revenues & costs USD DKK NOK EUR Asian currencies All others Total Forward cover costs Difference , Working capital Difference Financial items Difference Total currency effects 419 1,

31 Changes in currency exchange rates affected the result by MSEK 1,741 in Nov 2015-Oct 2016 vs Nov 2014-Oct 2015 Currency effects MSEK on SAS Group 2015/2016 vs 2014/2015 Aug-Oct 16 Nov 15-Oct 16 Negative impact on revenue due to the weaker NOK in the first three quarters. Total revenue Total costs Positive impact on other operating costs due to the weaker NOK in the first three quarters, offset by an even larger negative impact due to the stronger USD in Q1. Forward cover costs & working capital Income before depreciation ,114 1,766 Financial items Income before tax 419 1, SAS currency distribution - Nov 2015 Oct 2016 Revenue Other EUR 5% 11% SEK GBP 29% 3% USD 8% Expenses Other EUR 1% GBP 10% 2% 21% SEK NOK 30% 14% DKK 36% USD 15% NOK 15% DKK 62 31

32 SAS hedging position for FY17 Max jet fuel price Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 $ % 48% 52% 21% SAS jet fuel costs in 2016/17 (annual average values) 7.0 SEK/USD 8.0 SEK/USD 9.0 SEK/USD 10.0 SEK/USD Market price 300 USD/MT 400 USD/MT 500 USD/MT 600 USD/MT SEK 4.1 bn SEK 4.8 bn SEK 5.5 bn SEK 6.0 bn SEK 4.6 bn SEK 5.5 bn SEK 6.3 bn SEK 6.9 bn SEK 5.2 bn SEK 6.2 bn SEK 7.0 bn SEK 7.7 bn SEK 5.8 bn SEK 6.9 bn SEK 7.8 bn SEK 8.6 bn 63 32