Group Year 20 Press conference Stockholm, February 13, 20 1 www.scandinavian.net Group Year 20 A promising year Volume growth Rising yields Passenger load factors sharply up Healthy cost development International Hotels improved EBITDA One share in progress expansion has started 2
Group January December 20 MSEK 20 1999 Revenue 47 540 43 746 +9% Op. inc. bef. depr. 3 723 2 747 +36% Operating income 3 053 1 746 +75% Income before tax 2 773 1 846 +50% 3 Group Proposed dividend 20 Local currency Dividend Yield Danmark A/S 3,80 Norge ASA 4,20 Sverige AB 4,50 Average level (SEK) 4,50 4,7% 4
has outperformed peers 20 -still lower multiples than peers Market Capitalization vs. European Peers* (Rebase 31 DEC 1999) Group 110 112,6 108,3 1 90 80 jan- feb- mar- apr- maj- jun- jul- aug- sep- okt- nov- dec- Index Peers Index 5 Three Windows in the Capital Market Founded in 1946 as a Consortium The one flag carrier of 3 countries Denmark and Norway (2/7 each) Sweden (3/7) Listed on the 3 Scandinavian exchanges. Owned 50% private/ 50% governments 6
Key Airline Profitability Drivers / Group Traffic growth (RPK) up 7% Business Class (RPK-C) up 9% Cabin factor up 3,3 p.u. Yields up 1,9% EBITDAR up 37% 7 Cargo business - Increased yields Cargo contribution 20 (1999) +16,5% MSEK 861 (MSEK 739) January-December 20 Revenue ton-km up 0,7% Revenues up 5,5% 8
Favorable unit cost development except jet fuel Index Last Year 3% 2% 1% 0% (1 % ) (2 % ) Increase of 1,1% January-December 20 Down 3,0% adjusted for fuel costs (3 % ) JAN-DEC99 JAN-DEC 9 Result Improvement Program 1999/ MSEK 2450 achieved as of 4th quarter 20 Completed as planned mid 21 Area Achived effect vs. 1998 Cargo 90 MSEK Catering & In-flight service 3 MSEK IT & communications 2 MSEK Distribution & Electronic channels 635 MSEK Air crew 445 MSEK Ground handling 270 MSEK Technical maintenance 235 MSEK Overhead & other 275 MSEK Total 2450 MSEK 10
Sharp Increase in Passenger Load Factors - Growth Trend in Business Class RPK Business Class 1998-20 Passenger load factor total system 1995-20 Year on Year values Moving 12 months values 25% 20% 15% 10% 5% 0% -5% -10% -15% JAN98 JUL JAN99 JUL JAN JUL 68% 67% 66% 65% 64% 63% 62% DEC94 JUN DEC95 JUN DEC96 JUN DEC97 JUN DEC98 JUN DEC99 JUN DEC 11 First step on the expansion on Intercontinental routes as from May 21 First A 340-3 3 in service as from August 21 Washington D.C added as from May 21 20 figures : Traffic up 6,9% Business Class up 10% Pass. load factor 81% Yields up 3,1% 12
Growth vs LY Index 130 120 110 1 90 80 European routes - strong 1999- January 21 JAN MAR MAY JUL SEP Business Class/ Economy Class NOV JAN MAR MAY JUL Month Economy Class SEP NOV JAN Business Class 20 figures RPK up 7,5% Business Class up 8,0% Expansion on Copenhagen- Birmingham Oslo-Dublin 13 Yields up on full year 20 Total system - currency adjusted 3% 2% 1% 0% -1% -2% -3% JAN-DEC99 JAN-DEC Yields up 1,9% overall Up 3,1% on Intercontinental routes Reduced capacity on Norwegian domestic increased yields by 9,9% European rotes up 1,1% 14
partnerships MSEK 10 in synergies 20 15 & Partners - Global & Regional Coverage 9 destinations in 130 countries N. & C. America 373 destinations 21 countries + Regionals Europe 251 destinations 40 countries. Asia 98 destinations M. East 25 countries 32 destinations 23 countries S. America 49 destinations 9 countries Africa 11 destinations 8 countries Australasia 83 destinations 2 countries 16
Electronic Channels - current volumes of total sales 20 Products: Travel Pass, TPC, E-TIX Other Internet Total volume E-channels MSEK 3 5 10% of total passenger sales 17 Radisson Hotels reached target of 20% EBITDA growth p.a. SIH 450 4 350 3 250 MSEK 2 150 1 50 0 1994 1995 1996 1997 1998 1999 20 EBITDA - adjusted 6 4 MSEK 2 0 Jan-Dec 1999 Pre tax profit Jan-Dec 20 Gains 18
No. of hotels Radisson Hotels 2 remaining properties to be sold 21 140 120 1 80 60 40 20 0 1992 1993 1994 1995 1996 1997 1998 1999 20 Owned Leased Managed Franchised Two brands Radisson Hotels Malmaison 21 hotels added 7 Malmaisons In total 146 hotels in 37 countries SIH 19 Promising January traffic figuresaffected by Millenium effect Continued positive passenger mix Business Class +18,2% - Economy Class +5,4% Passenger- Seat capacity Cabin- traffic (RPK) (ASK) factor Total +9,3% +5,3% +2,1 p.u. Intercontinental +8,6% +2,3% Europe +9,8% +6,7% Domestic and +9,8% +6,7% Intrascandinavian 20
Management outlook operating key figures - year 21 Expansion strategies Rising yields Underlying unit costs down Key figure ASK Frequencies 21 Up approx 8% Up 3% RPK Up approx. 9% Passenger yield (currency adjusted) Up 1-2% Unit costs Down 2-3% 21 The Board of Directors Assessment for full year 21: Supply an demand balance improved U.S economy uncertain Lower unit costs Passenger traffic up 9% Capital gains at least MSEK 5 Significant improvement in operating income before taxes (ex gains) 22
Group Income by Business Area Group (MSEK) January - December 20 1999 2 168 1 307 International Hotels 583 544 Other operations/group elim. + 22-5 Income before taxes 2 773 1 846 23 Unpunctuality Flights delayed more than 15 min 25 20 % delayed 15 10 13,3 11,8 13,7 11,8 10,1 13,1 13,1 8,5 11,2 13,3 13,7 15,1 5 0 20,6 24,4 22,4 15,2 13,5 17,6 13 9,3 12,1 12,6 12,3 24,6 JAN FEB MAR APR MAJ JUN JUL AUG SEP OCT NOV DEC Udfald 99 Udfald Target 24
Group Investor Relations on the Internet http://www.scandinavian.net 25 Traffic and Yield JAN-DEC 20 vs 1999 JAN-DEC Index, Total Scheduled 20 1999 variance Production (mill ASK) 33 782 33 205 102 Traffic (mill RPK) 22 647 21 160 107 Cabin factor (%) 67,0 63,7 + 3,3 C-class share (%) 29,1 29,1 0,0 Yield (öre/rpk) 138,4 135,7 102 Currency adj. yield 138,4 135,8 102 26