SAS Group Financial result Operational data Costs and productivity Actual issues Outlook. ANA/18FEB99 DU/GR/UP slide 1

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Transcription:

SAS Group 1998 Financial result Operational data Costs and productivity Actual issues Outlook DU/GR/UP slide 1

SAS Group 1998 Revenue 40 946 MSEK up 5% Op. inc. bef. depr. 4 115 MSEK 0% Operating income 2 957 MSEK up 24% Income before tax 2 829 MSEK up 27% DU/GR/UP slide 2

Highlights 4th Quarter 1998 Negative trend for premium traffic Continued strong traffic growth in Swedish domestic market Introduction of Boeing 737-600 Airspace98 (new flight paths) in Scandinavia New airport Gardermoen in Oslo opened New cargo terminals opened in Oslo and Copenhagen Both Airspace98 and Gardermoen caused significant disturbances in SAS operation DU/GR/UP slide 3

Considerable Distorting Items Impacting Operating Profit MSEK 1998 Currency - 320 One-off costs, labour & operational disturbances - 800 Total negative impact vs last year, approx. - 1 120 DU/GR/UP slide 4

SAS Group Statement of Income (MSEK) 4th quarter 1998 1997 Operating revenue 10 909 10 196 Op. income before depr. 811 996 Operating income 425 532 Financial items, net - 61-54 Income before taxes 364 478 DU/GR/UP slide 5

SAS Group Statement of Income (MSEK) 1998 1997 Operating revenue 40 946 38 928 Op. income before depr. 4 115 4 118 Operating income 2 957 2 383 Financial items, net - 128-152 Income before taxes 2 829 2 231 DU/GR/UP slide 6

SAS Group Result Before depreciation and Before taxes MSEK 6 000 5 000 4 000 3 000 2 000 1 000 0 1995 1996 1997 1998 Income bef depreciation DU/GR/UP slide 7 Income bef taxes

3 500 3 000 SAS Group Development of Income before Taxes +754 +242 +916 +73 2 829 MSEK 2 500 2 000 1 500 1 000 500 2 231-320 +179 Increase in revenues: 1 175 MSEK -1246 0 1997 Curr Yield Traffic Oth rev Costs etc Gain on sales SIH 1998 DU/GR/UP slide 8

SAS International Hotels Income before taxes (MSEK) 250 200 150 100 50 0-50 -100-150 1993 1994 1995 1996 1997 1998 DU/GR/UP slide 9

SAS Group Balance Sheet MSEK 31DEC98 31DEC97 Liquid funds 8 011 9 817 Other interest-bearing assets 1 769 946 Aircraft 11 339 12 248 Other assets 19 330 14 618 Total assets 40 449 37 629 Operating liabilities 12 461 11 261 Interest-bearing liabilities 11 005 11 324 Subordinated debenture loan 854 784 Minority interests 19 19 Equity 16 110 14 241 Total liabilities and equity 40 449 37 629 Net debt 2 079 1 345 Net debt / equity ratio 0,1 0,1 DU/GR/UP slide 10

SAS Group Changes in Financial Position MSEK 1998 1997 Cash flow from operations 3 807 3 954 Change in working capital + 330 + 302 Net financing from operations 4 137 4 256 Investments, advance payments - 6 112-3 256 Sales of fixed assets, etc. + 2 360 + 252 Dividends to mother companies - 1 141-844 Financing surplus - 756 + 408 Changes in external financing, net - 1 050-1 641 Change in liquid funds - 1 806-1 233 DU/GR/UP slide 11

SAS Group Key Ratios 1998 1997 Gross operating margin % 10 11 Return on capital employed % 13 12 Return on equity % *) 13 11 Equity / assets ratio % 40 38 Net debt / equity ratio 0,1 0,1 *) After standard tax DU/GR/UP slide 12

Goal for Shareholder Returns The SAS Group s goal is to provide its shareholders with a competitive return. This refers to yearly rise in the share price plus dividends. The aim is to give shareholders a return of 14% per year, calculated as an average over a business cycle. Annual Report 1997 DU/GR/UP slide 13

SAS Group s Financial Target The target for shareholder returns is translated into an internal financial target, return on capital employed (ROCE). The present ROCE target is 12% per year, calculated as an average over a business cycle. Annual Report 1997 DU/GR/UP slide 14

SAS Group - ROCE 20% 15% 10% 5% 0% 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 DU/GR/UP slide 15

Market Based Key Ratios Cash flow return on investments (CFROI) Cash flow from operations (EBITDAR) Adjusted capital: + total assets + overvalues aircraft + capitalized leases - interest-bearing assets - noninterest-bearing debt Market based ROCE Result: + EBIT + interest part of leases + change of overvalues (aircraft) Adjusted capital: + total assets + overvalues aircraft + capitalized leases - interest-bearing assets - noninterest-bearing debt DU/GR/UP slide 16

Cash Flow Return on Investments (CFROI) - SAS Group 40% 35% 30% 25% 20% 15% 10% 5% 0% 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 DU/GR/UP slide 17

25% Market Based ROCE vs ROCE SAS Group 20% 15% 10% 5% 0% -5% -10% 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Market based ROCE ROCE DU/GR/UP slide 18

SAS Total Market Capitalization SEK (bill.) 25 1991-1998 20 15 10 5 Average investor yield 16,1% 0 jan-91 jan-92 jan-93 jan-94 jan-95 jan-96 jan-97 jan-98 jan-99 DU/GR/UP slide 19

SAS Aircraft Fleet Aircraft in SAS Traffic 31DEC98 30SEP98 31DEC97 Boeing 747-243 1 1 1 Boeing 767-300 14 14 14 MD-81/82/83 49 49 45 MD-87 18 18 18 MD-90 8 8 8 Boeing 737-600 8 2 DC-9-81 9 9 9 DC-9-41 22 22 23 DC-9-21 4 4 4 Fokker F28 16 16 16 Fokker F50 22 22 22 SAAB 2000 6 6 4 TOTAL 177 171 164 DU/GR/UP slide 20

Passenger Traffic 1998 15% 10% 5% 0% -5% -10% Change vs vs last last year year Q1/98 Q2/98 Q3/98 Q4/98 1998 RPK-C RPK-M RPK General decrease in business travel in Q4 Full year premium traffic almost flat Still strong growth of discounted traffic - partly driven by campaigns Passenger load factor 65,7% (up 0,8 p.u.) Number of passengers up 4,3% DU/GR/UP slide 21

Passenger Load Factor Total System Moving 12 months values 67% 66% 65% 64% 63% 62% DEC94 MAR JUN SEP DEC95MAR JUN SEP DEC96MAR JUN SEP DEC97 MAR JUN SEP DEC98 DU/GR/UP slide 22

Share of Fullfare Traffic 34% Total System Moving 12 months values 33% 32% 31% 30% 29% DEC94 MAR JUN SEP DEC95 MAR JUN SEP DEC96 MAR JUN SEP DEC97 MAR JUN SEP DEC98 DU/GR/UP slide 23

Yield Total System 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% 1996 1997 1998 Yield as is Curr adj yield DU/GR/UP slide 24

Intercontinental Routes 1998 Change vs last year 20% 15% 10% 5% 0% -5% -10% -15% Q1/98 Q2/98 Q3/98 Q4/98 1998 Stockholm-Chicago opened 25OCT Passenger load factor 77,7% (down 1,6 p.u.) Balance in production & traffic on Asia, negative on USA RPK-C RPK-M DU/GR/UP slide 25

European Routes 1998 20% 15% 10% 5% 0% -5% Change vs last year Passenger load factor 59,2% (up 1,9 p.u.) High load factor and premium traffic growth on UK, France, Germany, Estonia -10% Q1/98 Q2/98 Q3/98 Q4/98 1998 RPK-C RPK-M DU/GR/UP slide 26

Intrascandinavian Routes 1998 Change vs last year 25% 20% 15% 10% 5% 0% -5% -10% Passenger load factor 59,2% (down 0,6 p.u.) General decrease in business travel means fewer transfer passengers -15% -20% Q1/98 Q2/98 Q3/98 Q4/98 1998 RPK-C RPK-M DU/GR/UP slide 27

Danish Domestic Routes 1998 5% 0% -5% -10% -15% -20% -25% -30% Change vs last year Q1/98 Q2/98 Q3/98 Q4/98 1998 Passenger load factor 62,5% (up 3,7 p.u.) Adjustments in traffic system due to infrastructural changes in Danish domestic market successful RPK-C RPK-M DU/GR/UP slide 28

Norwegian Domestic Routes 1998 25% 20% 15% 10% 5% 0% -5% -10% Change vs last year Q1/98 Q2/98 Q3/98 Q4/98 1998 Passenger load factor 62,7% (up 1,7 p.u.) Troublesome opening of Gardermoen when Norwegian domestic capacity was increased RPK-C RPK-M DU/GR/UP slide 29

Swedish Domestic Routes 1998 Change vs last year 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% Q1/98 Q2/98 Q3/98 Q4/98 1998 Passenger load factor 63,6% (up 3,4 p.u.) Only route area with increasing premium traffic in Q4 Continued strong growth in discounted segment RPK-C RPK-M DU/GR/UP slide 30

SAS Cargo 1998 Competition hardened, primarily due to the crisis in Asia Three cargo terminals opened: - JAN Newark - OCT Gardermoen - DEC Copenhagen Cargo tonnage increased 0,4 p.u., cargo tonne kilometers increased 3,3 p.u. DU/GR/UP slide 31

Star Alliance Synergies Code-Sharing with 19 Partners Number of destinations 20SEP98 31DEC98 SAS network 101 101 SAS code-shared with LH +42 +42 SAS code-shared with other +66 +88 TOTAL 209 231 Number of frequencies/day 12-18OCT98 11-17JAN99 SAS operated, no code-sharing 577 470 Partner flts on SAS 428 473 SAS comm. flts on partners 673 722 TOTAL 1 678 1 715 DU/GR/UP slide 32

Lufthansa Joint Venture Traffic 1998 vs 1997 Joint Venture routes Germany-Scandinavia Index Last Year Passengers 2 397 300 111 Traffic, RPK 116 Production, ASK 110 Cabin factor 1998 62,0% 1997 58,6% DU/GR/UP slide 33

SAS EuroBonus Development 4th quarter 1998 Number of members during 4th quarter increased by 4,5% to 1 537 200 Member distribution by country: Outside Scandinavia 31% Denmark 16% Norway 31% Sweden 22% 1 600 000 1 500 000 1 400 000 1 300 000 1 200 000 1 100 000 1 000 000 900 000 800 000 Number of members jan 96 apr 96 jul 96 okt 96 jan 97 apr 97 jul 97 oct 97 jan 98 apr 98 jul 98 oct 98 DU/GR/UP slide 34

Unit Cost Development Index Last Year 5% 4% 3% 2% Excl one-off, labour and operational disturbances: -2,6% 1% 0% 1996 1997 1998 DU/GR/UP slide 35

Slightly Increased Unit Costs 1998 vs 1997 MSEK Adjusted Share of JAN-DEC/97 JAN-DEC/98 Var. % total var % Commissions 2 255 2 072 8.1% 0.7% Fuel 2 603 2 322 10.8% 1.0% Government charges 4 101 3 558 13.2% 2.0% Personnel 10 972 11 805 (7.6%) (3.0%) Other oper. net costs 7 468 7 741 (3.7%) (1.0%) TOTAL 27 399 27 498 (0.4%) (0.4%) Volume = average growth in ASK and RPK = 2,1% DU/GR/UP slide 36

Productivity Negatively Effected by Labour Conflicts, Airspace98, Gardermoen and One-off Activities +5% +4% +3% +2% +1% +0% -1% -2% -3% 2% loss of volume 1% oneoff extra personnel -4% 1995 1996 1997 1998 Measure is average change of RPK /ASK over change in number of full time employees DU/GR/UP slide 37

In Pipeline 1999 Complete review of long haul operations Evaluate of larger aircraft medium haul Further develop partner cooperation Implement program SAS 2000+ Complete and implement result improvement program DU/GR/UP slide 38

SAS & Partners today Regionals: Cimber Air Wideröe Skyways Air Botnia Maersk Grønlandsfly (DK) (NO) (SE) (FI) (DK) (DK) Lufthansa United Air Canada Thai Varig Air New Zealand Ansett Australia All Nippon Airways European: British Midland Spanair Air Baltic DU/GR/UP slide 39 (UK) (SP) (Lat)

SAS 2000+ New products and services based on: individual, informal and personal New corporate identity Strengthening of the SAS brand Internal motivation program DU/GR/UP slide 40

Program to Improve Result Result improvement program to be implemented 1999-2000 with ambition to increase SAS Airline gross profit margin by 3 p.u. from 12% to 15%: Strengthening revenues - maintaining yields Cost reduction program to lower costs 3 000 MSEK - evaluation of core activities - evaluation of current structures - 3 000 MSEK from gap 1 200 MSEK plus reduction of two years natural cost increase DU/GR/UP slide 41

Example of Structural Actions Distribution - Multi Channel Strategy Background /4 of total cost DU/GR/UP slide 42

Outlook 1999 Weakening business traffic Higher risk of overcapacity Norwegian market slowing down since opening of Gardermoen (travel patterns) and from lower economic growth in Norway Increased risk exposure General global economic uncertainty Asia and South America Weaker stock exchanges DU/GR/UP slide 43

Monthly Change in Total C-class Traffic JAN98 - JAN99 30% 25% 20% 15% 10% 1% yearly C-class revenue means: 170 MSEK 5% 0% -5% -10%? -15% -20% JAN98 FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN99 DU/GR/UP slide 44

Monthly Change in Total M-class Traffic JAN98 - JAN99 10% 5%? 0% -5% -10% 1% yearly M-class revenue means: 110 MSEK -15% JAN98 FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN99 DU/GR/UP slide 45

1999 - A Tough Year Ahead 1999 will be a tough year facing increased uncertainties: global economic development capacity development revenues, especially from premium traffic development Firm actions to improve costs in the downturn DU/GR/UP slide 46

Aircraft fleet Present DC-9 & F-28 / Future 737-600/700/800 55 50 45 40 35 30 25 20 15 10 5 0 51 Total number of firm orders: 55 options: 40 30SEP98 1998 1999 2000 2001 2002 2003 Owned/Fin. lease Op. lease Firm orders Options DU/GR/UP slide 47

Aircraft fleet Present F-50 & Saab2000 / Future Dash 8-Q400 30 28 25 20 15 Total number of firm orders: 17 options: 18 10 5 0 30SEP98 1998 1999 2000 2001 Owned/Fin. lease Op. lease Firm orders Options DU/GR/UP slide 48

Investments Aircraft MUSD 1999 2000 2001 2002- Firm orders: 640 710 75 75 Other investments in SAS normally 800-900 MSEK annually DU/GR/UP slide 49

Capacity Increase Planned for 1999 Planned capacity (ASK) increase for 1999 vs 1998 is 6,5% Comparison to 1998: The labour conflicts and operational disturbances related to both opening of Gardermoen and Airspace98 meant approx. 2,5% loss of production in 1998 Flexibility: If traffic prognosis fail, aircraft planned for phase out can be phased out earlier DU/GR/UP slide 50

Appendix Share prices Currency effects SAS Group data SAS data DU/GR/UP slide 51

SAS Share Prices 1998 SEK 170 160 150 140 130 120 110 100 90 80 70 60 50 DEN NOR 01jan98 01apr98 01jul98 01okt98 01jan99 SAS Danmark SAS Norge SAS Sverige SWE DU/GR/UP slide 52

SAS Share Prices 1998 Deviation from Mathematical Parity 25% 20% DEN 15% 10% 5% 0% SWE -5% -10% -15% -20% NOR 01jan98 01apr98 01jul98 01okt98 01jan99 SAS Danmark SAS Norge SAS Sverige DU/GR/UP slide 53

SAS Parent Companies 1998 Key values SAS Danmark SAS Norge SAS Sverige Earnings per share - local curr. 11,60 11,51 12,77 - SEK 13,78 12,13 12,77 Equity per share - local curr. 70,62 81,96 89,77 - SEK 90,11 87,94 89,77 DU/GR/UP slide 54

SEK INDEX 136 134 132 130 128 126 124 122 120 118 116 114 112 110 Development of SEK vs ECU index 1991-05-17 = 100 jan-95 jan-96 jan-97 jan-98 jan-99 DU/GR/UP slide 55

SAS Airline Currency Distribution Revenues Costs Major deficiency currencies: USD,DKK 19% 14% 4% 9% 34% SEK NOK DKK USD GBP other 15% 28% SEK DKK USD NOK other 14% 20% 19% 24% DU/GR/UP slide 56

SAS Airline Currency Effects 1998 vs 1997 (MSEK) Q4 1998 Total revenues + 291 + 122 Total costs - 319-370 Forward cover costs & working cap. + 44-76 Income bef. depr. + 16-324 Financial items + 1 + 4 Income before tax + 17-320 DU/GR/UP slide 57

Currency Effects Total revenues & costs: (Total -248 MSEK) Major approx. effects: USD -130 Asian curr. -120 NOK -60 DKK -35 GBP +65 Forward cover costs: (Total -73 MSEK) 1997 +206 1998 +133 1998 vs 1997 SAS Airline Working capital: (Total -3 MSEK) 1997-71 1998-74 Financial items: (Total +4 MSEK) 1997 +2 1998 +6 Grand total: - 320 MSEK DU/GR/UP slide 58

SAS Group Net Financial Items (MSEK) 1998 1997 Interest net - 115-166 Currency loss - 14-1 Financial items, net - 129-167 DU/GR/UP slide 59

SAS Group Income by Business Unit (MSEK) 4th quarter 1998 1997 SAS 314 420 SAS International Hotels 48 55 Other operations/group elim. + 2 + 3 Income before taxes 364 478 DU/GR/UP slide 60

SAS Group Income by Business Unit (MSEK) 1998 1997 SAS 2 588 2 067 SAS International Hotels 233 160 Other operations/group elim. + 8 + 4 Income before taxes 2 829 2 231 DU/GR/UP slide 61

SAS Group Development of Equity/Assets Ratio 50% 45% 40% 35% 30% 25% 20% 15% 10% dec-92 jun-93 dec-93 jun-94 dec-94 jun-95 dec-95 jun-96 dec-96 jun-97 dec-97 jun-98 dec-98 DU/GR/UP slide 62

SAS Group Development of Net Debt 18 000 13 000 MSEK 15 900 MSEK 9 700 MSEK 4 750 MSEK 2 350 MSEK 1 870 MSEK 1 940 MSEK 16 000 14 000 12 000 MSEK 10 000 8 000 6 000 4 000 2 000 0 dec-91 jun-92 dec-92 jun-93 dec-93 jun-94 dec-94 jun-95 dec-95 jun-96 dec-96 jun-97 dec-97 jun-98 dec-98 DU/GR/UP slide 63

SAS Group Cash Flow Net Financing from ops + sales & Investments 7 000 MSEK 6 000 5 000 4 000 3 000 2 000 1 000 0 1995 1996 1997 1998 Generated cash flow DU/GR/UP slide 64 Investments

4 000 3 000 SAS Group Income before taxes Bars = Quarterly income Line = Moving 12 months result 2 000 MSEK 1 000 0-1 000-2 000-3 000 Q1-92 Q2-92 Q3-92 Q4-92 Q1-93 Q2-93 Q3-93 Q4-93 Q1-94 Q2-94 Q3-94 Q4-94 Q1-95 Q2-95 Q3-95 Q4-95 Q1-96 Q2-96 Q3-96 Q4-96 Q1-97 Q2-97 Q3-97 Q4-97 Q1-98 Q2-98 Q3-98 Q4-98 DU/GR/UP slide 65

SAS Revenues (as is) MSEK 1998 1997 curr adj 97 Passenger revenues 28 240 27 259 27 307 Cargo revenues 2 240 2 212 2 229 Other traffic revenues 1 407 1 269 1 282 Other revenues 6 324 6 066 6 110 TOTAL REVENUES 38 211 36 768 36 890 DU/GR/UP slide 66

SAS Operating Costs (as is) MSEK 1998 1997 curr adj 97 Personnel costs 12 051 10 937 10 959 Leasing costs (aircraft) 1 059 859 894 Sales costs 2 072 2 209 2 209 Fuel 2 322 2 440 2 550 Governmental charges 3 558 3 969 4 017 Meals costs 1 596 1 482 1 486 Handling costs 1 700 1 546 1 570 Maintenance costs 1 732 1 773 1 804 Other costs 8 477 7 781 7 953 TOTAL COSTS 34 567 32 996 33 442 DU/GR/UP slide 67

Slightly Increased Unit Costs 1998 vs 1997 (MSEK) 1998 1997 Operating net costs 27 498 26 466 excluding A/C lease and other revenue Adjustments: Currency effect + 372 Volume (RPK/ASK=2,1%) + 561 Comparable operating net costs 27 498 27 399 Change in operating net cost (99) In % of comparable net cost 1997 (0,4%) DU/GR/UP slide 68

Traffic and Yield 1998 vs 1997 Index, SAS Total Scheduled 1998 1997 variance Production (mill ASK) 31 705 31 259 101 Traffic (mill RPK) 20 821 20 266 103 Cabin factor (%) 65,7 64,8 + 0,8 C-class share (%) 31,0 31,7-0,7 Yield (öre/rpk) 135 134 101 Currency adj. yield 135 135 101 DU/GR/UP slide 69

Production and Traffic 1998 vs 1997 Route Sector Production Traffic Cabin Scheduled ASK RPK factor % SAS Total 101 103 + 0,8 Intercontinental 103 101-1,6 Europe 100 103 + 1,9 Intrascandinavian 103 102-0,6 Denmark/Greenland 85 91 + 3,7 Norway 102 105 + 1,7 Sweden 106 112 + 3,4 DU/GR/UP slide 70

Traffic Analysis 1998 vs 1997 Route Sector Fullfare Discounted Total traffic Scheduled RPK-C RPK-M RPK SAS Total 101 104 103 Intercontinental 98 101 101 Europe 101 104 103 Intrascandinavian 101 102 102 Denmark/Greenland 89 92 91 Norway 103 106 105 Sweden 104 120 112 DU/GR/UP slide 71

Passenger Yield 1998 vs 1997 Route Sector Nominal Currency Adjusted Scheduled yield effect yield SAS Total 101 100 101 Intercontinental 98 100 98 Europe 104 99 103 Intrascandinavian 99 100 99 Denmark/Greenland 93 99 91 Norway 100 103 102 Sweden 93 100 93 DU/GR/UP slide 72

Traffic and Yield 4th Quarter 1998 vs 1997 4th quarter Index, SAS Total Scheduled 1998 1997 variance Production (mill ASK) 8 116 7 771 104 Traffic (mill RPK) 5 089 4 940 103 Cabin factor (%) 62,7 63,6-0,9 C-class share (%) 33,1 35,4-2,3 Yield (öre/rpk) 144 140 103 Currency adj. yield 144 144 100 DU/GR/UP slide 73

Production and Traffic 4th quarter 1998 vs 1997 Route Sector Production Traffic Cabin Scheduled ASK RPK factor % SAS Total 104 103-0,9 Intercontinental 106 101-3,9 Europe 102 103 + 0,5 Intrascandinavian 106 102-2,2 Denmark/Greenland 91 95 + 2,5 Norway 107 103-2,4 Sweden 108 115 + 4,0 DU/GR/UP slide 74

Traffic Analysis 4th quarter 1998 vs 1997 Route Sector Fullfare Discounted Total traffic Scheduled RPK-C RPK-M RPK SAS Total 96 107 103 Intercontinental 94 103 101 Europe 96 107 103 Intrascandinavian 97 107 102 Denmark/Greenland 93 98 95 Norway 93 111 103 Sweden 103 129 115 DU/GR/UP slide 75

Passenger Yield 4th quarter 1998 vs 1997 Route Sector Nominal Currency Adjusted Scheduled yield effect yield SAS Total 103 97 100 Intercontinental 99 97 96 Europe 109 96 105 Intrascandinavian 102 98 100 Denmark/Greenland 99 92 91 Norway 93 100 93 Sweden 94 100 93 DU/GR/UP slide 76

SAS Statement of income (MSEK) 1998 1997 Operating revenue *) 35 505 34 190 Operating income bef. depr. *) 4 388 4 236 Operating income 2 620 2 149 Income before taxes 2 588 2 067 *) Excluding SAS Trading and aircraft lease net DU/GR/UP slide 77

SAS Statement of income (MSEK) 4th quarter 1998 1997 Operating revenue *) 9 362 8 829 Operating income bef. depr. *) 955 1 045 Operating income 342 456 Income before taxes 944 597 *) Excluding SAS Trading and aircraft lease net DU/GR/UP slide 78

Sales of Aircraft Sold: 1998-1 MD-83 (Q1) - 1 Saab 340 (Q1) - 1 Boeing 767-200 (Q4) - 1 Boeing 737-500 (Q4) Sale/leaseback: - 1 Boeing 767-300 (Q1) - 4 DC-9-21 (Q1) - 1 Boeing 767-300 (Q3) - 20 DC-9-41 (Q3) Gain on sales: 1 009 MSEK DU/GR/UP slide 79

Present Surplus Aircraft 1 a/c 737-500 4 a/c Saab340 To be sold when suitable DU/GR/UP slide 80

4 000 3 000 2 000 1 000 SAS Income before e.o. items Bars = Quarterly income Line = Moving 12 months result MSEK 0-1 000-2 000-3 000-4 000 Q1-92 Q2-92 Q3-92 Q4-92 Q1-93 Q2-93 Q3-93 Q4-93 Q1-94 Q2-94 Q3-94 Q4-94 Q1-95 Q2-95 Q3-95 Q4-95 Q1-96 Q2-96 Q3-96 Q4-96 Q1-97 Q2-97 Q3-97 Q4-97 Q1-98 Q2-98 Q3-98 Q4-98 DU/GR/UP slide 81

Unit Cost Definition The unit cost change is calculated as follows: Costs: Operating expenses excluding depreciation and lease costs for aircraft and reduced with other external revenue Last year figure is for comparison adjusted with currency effect Volume growth rate: Average growth rate of ASK and RPK Net unit cost change: Growth rate of comparable costs in relation to volume growth rate DU/GR/UP slide 82