4th 4th quarter quarterquarter presentation presentation · 4th 4th quarter quarterquarter...
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Norwegian Air Shuttle ASA Norwegian Air Shuttle ASA Norwegian Air Shuttle ASA Norwegian Air Shuttle ASA
4th 4th 4th 4th QuarterQuarterQuarterQuarter PresentationPresentationPresentationPresentation
FebruaryFebruaryFebruaryFebruary 14th 200814th 200814th 200814th 2008
CEO BjCEO BjCEO BjCEO Bjøøøørn Kjosrn Kjosrn Kjosrn Kjos
0
200
400
600
800
1 000
1 200
1 400
Q 4 0 4 Q 4 0 5 Q 4 0 6 Q 4 0 7
MN
OK R
evenue
51 %
Strong revenue growth in Q4
• MNOK 1,145 in revenue, 51% growth since last year– International: MNOK 659; 85% growth
– Domestic: MNOK 486; 20% growth
Q4 04 Q4 05 Q4 06 Q4 07
Revenue 331 531 760 1145
Domestic 223 299 404 486
International 108 232 356 659
Domestic Growth -10 % 34 % 35 % 20 %
International Growth 300 % 114 % 53 % 85 %
2
Steady EBITDA margin
on high growth
Q4 06 Q4 07EBITDA Group MNOK -19 -36
Earnings aft. tax Group -25 -21
EBITDA Group margin % -2 % -3 %
EBITDA Norwegian w/o Polska & FlyNordic 35 18
EBITDA Norwegian Polska -52 -25
EBITDA FlyNordic n/a -30
0
200
400
600
800
1 000
1 200
1 400
Q 4 0 4 Q 4 0 5
MN
OK
Revenue
51 %
Strong double digit growth
• Annual turnover of 4,226 MNOK, 44% increase since last year
• Strong revenue growth from international expansion
0
1 000
2 000
3 000
4 000
5 000
Revenue M
NO
K
Revenue
Domestic
International
44 %
2004 2005 2006 2007
Revenue 1 210 1 972 2 941 4 226
Domestic 830 1 048 1 472 1 785
International 380 924 1 470 2 441
Domestic Growth -7 % 26 % 40 % 21 %
International Growth 467 % 143 % 59 % 66 %
3
-200
-150
-100
-50
0
50
100
150
200
250
300
2004 2005 2006 2007
-12 %
-7 %
-2 %
3 %
8 %
13 %
18 %
EBITDA Group MNOK
EBITDA Margin Norway MNOK
EBITDA Margin MNOK
Best year ever!
• Total earnings (EBITDA) of 208 MNOK in 2007 (21)
• Earnings after tax of 85 MNOK (-22)
• Fuel price increase reduced earnings with MNOK 60 in 2007
Less Polish
operation
Less FlyNordic
2004 2005 2006 2007EBITDA MNOK -141 56 21 208
Earnings aft tax -110 28 -22 85
EBITDA margin % -12 % 3 % 1 % 5 %
Amplified seasonal variations
and rising fuel prices
• Average fuel price in Q4 2006 wasNOK 5,053 compared to NOK 6,402 this year – equivalent to MNOK 65 in extra fuel costs in Q4
Quarterly Revenues
2007
2006
2005
2004
0
200
400
600
800
1 000
1 200
1 400
Q1 Q2 Q3 Q4
Revenue M
NO
K
Quote Jet Fuel CIF NWE Cargoes
500
600
700
800
900
1 000
Q4 2006 Q4 2007
• Larger share of the route portfolio on
international routes increases
seasonal fluctuations
4
Positive cash flow from operations
• Positive cash flow from operations of 498 MNOK in 2007 (76)
• Negative cash flow of 9 MNOK from operations in Q4 (-122)
• Investments:
– Boeing pre-delivery payment MNOK 50
– Currency hedge deposit of MNOK 215
• Financial activities:
– Equity issue in August in relation to the purchase of FlyNordic
– Equity issue in October in relation to the share option program
CASH FLOW STATEMENT (KNOK)
2007 2006 2007 2006
Net cash flows from operation activities -8 855 -122 061 497 920 75 648
Net cash flows from investments -310 781 -33 601 -532 619 -245 257
Net cash flows from financial activities 9 425 306 425 139 864
Exchange rate effect on cash 1 539 -86 -2 025 -9
Net change in cash and cash equivalents -308 672 -155 747 269 700 -29 755
Cash and cash equivalents in beginning of period 810 082 387 456 231 710 261 464
Cash and cash equivalents in end of period 501 410 231 710 501 410 231 710
Full Year4. Quarter
Load factor target of 80% achieved
* Excl. FlyNordic
• 80 % Load factor in 2007 – absorbing production growth of 30%
• Started 26 new routes in 2007
80 %
79 %78 %
67 %
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
2004 2005 2006 2007
60 %
65 %
70 %
75 %
80 %
85 %
ASK Load Factor
5
Close to 7 million passengers in 2007
• The Group had more than 6.9 million passengers in 2007*
– 3.1 million domestically
– 3.8 million internationally
• Norwegian w/o subsidiaries transported 6.4 million passengers
* FlyNordic only Aug- Dec
0
1 000 000
2 000 000
3 000 000
4 000 000
5 000 000
6 000 000
7 000 000
8 000 000
2004 2005 2006 2007
Passengers LF
Passengers DY
36 %
27 %25 %
23 %
26 %
34 %
30 %28 %
33 %
42 %
35 %35 %
40 %
44 %
34 %
38 %
44 %
0 %
10 %
20 %
30 %
40 %
50 %
Bergen Stavanger Tromsø Trondheim
2004 2005 2006 2007
Steady increase in market
share in 2007
• Market share of 41 % on key domestic routes, 3 pp growth since
last year
• Timetable improvements pays off
6
Strong foothold on key
domestic routes in Q4 2007
• Market share in Q4
46 %45 %
42 %
37 %
0 %
5 %
10 %
15 %
20 %
25 %
30 %
35 %
40 %
45 %
50 %
Tromsø Stavanger Trondheim Bergen
0,53
0,54
0,55
0,59
0,50
0,55
0,60
2004 2005 2006 2007
0,51
Decrease in unit cost despite
significant increase in fuel prices
• Unit cost of 0.53 in 2007
• Cost level affected by higher fuel prices and one-offs
Fuel
One offs
Wet lease
Introduction B737-800
New Handling agent
7
Satisfactory utilization levels
• But still upside potential to achieve ”best in class”
performance
Aircraft avg. Utilization/ DaySource: Jacob s C o nsult ancy
0
2
4
6
8
10
12
14
Norw egian Most
Profitable
LCC
2nd Most
Profitable
LCC
3rd Most
Profitbale
LCC
Head-on
Competitor
2005
2006
2007
Passengers Per EmployeeSource: Jacobs C onsult ancy
0
2 000
4 000
6 000
8 000
10 000
12 000
Norw egian Most
Profitable
LCC
2nd Most
Prof itable
LCC
3rd Most
Profitbale
LCC
Head-on
Competitor
2005
2006
2007
Norwegian and the environment:
New aircraft
• The most environmentally friendly fleet available on order– 50 brand new B737-800 HGW on order (1 delivered)
– 3 used B737-800 on order (1 delivered)
– Option for further 42 B737-800 HGW
Relative Per Pax Emissions
Fuel/CO2 Fuel/CO2 Fuel/CO2 Fuel/CO2Nox Nox Nox Nox0 %
10 %
20 %
30 %
40 %
50 %
737-800HGW 737-800 737-300 MD-80
Base Base
4 % 5 %
23 %
17 %
33 %
43 %
BE
TT
ER
8
Emissions reduction and
significant bottom line savings
Consumption (t/yr/a/c) 8 867 Consumption (t/yr/a/c) 8 200 Consumption (t/yr/a/c) 8 467
40 40 31,5
5960 5960 5954
915 915 915
NOK/USD 5,54 NOK/USD 5,54 NOK/USD 5,54
Total Fuel Cost 1 797 824 361 Total Fuel Cost 1 662 649 597 Total Fuel Cost 1 351 916 608
Savings w/ 737-800 HGW445 907 753 Savings w/ 737-800 HGW310 732 989 Savings w/ 737-800 HGW 0
Jet-A1 price (USD/tonn)
Number of Seats Number of Seats Number of Seats
Jet-A1 price (USD/tonn) Jet-A1 price (USD/tonn)
McDonnell Douglas MD-80 Boeing 737-300 Boeing 737-800 HGW
Fleet size Fleet size Fleet size
0
5
10
15
20
25
30
35
40
Q4 04 Q4 05 Q4 06 Q4 07
MN
OK
Revenue
Freedom of choice pays off !
• Strong growth in 3rd party sales
• Continuing focus on existing ancillaries, introduction of new products
• In Q4 ancillaries accounted for more than NOK 35 per passenger
209 %
9
Norwegian Reward
• Norwegian Reward is a joint venture with BankNorwegian
• Implementation has been highly successful
• Call Norwegian is a fully owned subsidiary of the airline
Call Norwegian
Family & FriendsTelenor, NetCom
BusinessTelenor, NetCom, Ventelo
Low Cost - WebChess, Tele2, One Call
Youth & Control
Kontant / NC YoungTalk
ImmigrantsLebara
Attractive to travellers: In flight, at airports, abroad- Simple
- Competitive price
- Services adjusted to the segmentCall NorwegianMarket Position
10
Continued Expansion in 2008
• 7 Boeing 737-800 and 3 Boeing 737-300 adds capacity
– Norway: 4 B737-800 and 2 B737-300
– Sweden: 3 B737-800; 4 MD-80 phased out
– Poland: 1 B737-300
• Total fleet of 41 aircraft from June 2008
• Expected production increase of approximately 50 %
• New Rygge base starts on February 14th with two aircraft
0
500
1 000
1 500
2 000
2 500
3 000
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08
Mill
AS
K
Domestic
International
Excl. FlyNordic
Expectations for 2008
• Business Environment
– Continued pressure on yield
– Uncertain macro conditions
– Sustained demand
– Higher seasonal fluctuations
• Cost Development
– Unit cost in the area of NOK 0,50 for the Group*
– Down from 0.52 guided in Q3 due change in route portfolio mix. Same effect on yield.
• Subsidiaries/ Bases
– The Polish base is expected to continue its positive development, but will not be profitable due to continued expansion
– FlyNordic expected to be loss making during Q1, break even expected for the full year
– The Rygge start up with 16 new routes is expected to have losses in first half, but withpositive results in second half.
* Assuming fuel price of USD 850/ton
11
146 routes to 76 destinations
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