Norwegian (NAS)Q1 2006
Bjørn Kjos (CEO)
Oslo, 27. April 2006
Norwegian Air Shuttle ASA
2
Strong revenue growth in Q1● 539 MNOK in revenue in Q1 2006● Revenue growth of 69 % since Q1 2005
200
250
300
350
400
450
500
550
600
Q1 04 Q1 05 Q1 06
Revenue 236 320 539Earnings after tax -40 -34 -43EPS -2,72 -2,41 -2,90
35 %
69 %
Revenue MNOK
3
Continued margin improvement● EBITDA of -52 MNOK in Q1 2006● Earnings after tax -43 MNOK (-34)
● Margin up 4 pp in since Q105
-100
-80
-60
-40
-20
0
20
40
-25 %
-20 %
-15 %
-10 %
-5 %
0 %
Q104 Q105 Q106
EBITDA MNOK EBITDA margin
Revenue 236 320 539EBITDA MNOK -50 -44 -52EBITDA margin % -21 % -14 % -10 %
4
Margin development
● Margin has improved with 4 pp vs Q105● Margin growth of 11 pp in 2 years
Margin development - EBITDA
-30 %
-20 %
-10 %
0 %
10 %
20 %
30 %
2004 -21,1 % -11,7 % -3,4 % -13,0 %
2005 -13,8 % 5,8 % 10,8 % 0,9 %
2006 -9,8 %
Q1 Q2 Q3 Q4
5
Strong cash flow from advanced bookings
● Positive cash flow from operation of 192 MNOK● Investments : Aircraft purchase● Cash 522 MNOK included private placement 120 MNOK
CASH FLOW (TNOK)Form: 2006 2005Operation activites 192 732 1 832Investments -71 523 -11 421Financial activities 139 864 4
Net change 261 073 -9 585Opening balance 261 464 195 157Closing balance 522 538 185 572
First quarter
-50
0
50
100
150
200
250
300
Q1 Q2 Q3 Q4
2005 2006
Operation activities
6
Continued load factor growth● 64 % production increase from Q105 to Q106● 85 % growth in passenger traffic (RPK)● 77 % load factor in Q106, up 9 %-points
65 % 68 % 77 %
933
569
333703707037043709370
60 %62 %64 %66 %68 %70 %72 %74 %76 %78 %
Q1 04 Q1 05 Q1 06
Cabin Factor ASK
Cabin Factor
7
Strong passenger growth
PAX (000)* 398 550 1 014
-100
100
300
500
700
900
1 100
Q1 04 Q1 05 Q1 06
84 %
38 %
Thousand pax
*Tickets sold for travel
8
Enhanced competitive position● 40 % market share on key domestic routes● Capacity increased by 30 % since Q1 05
% Market Share
33 % 33 %
27 %30 %
42 % 43 %
34 %38 %
20 %
25 %
30 %
35 %
40 %
45 %
Bergen Trondheim Stavanger Tromsø
Q1 05 Q1 06
9
Strong revenue growth, both domestic and international
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
Q1 04 Q1 05 Q1 06
Turnover domestic Turnover abroad
● International turnover increased by 180 % since Q1 2005● Domestic turnover increased by 36 % since Q1 2005
Revenue
10
Still a guarantor for low fares● Domestic prices are down 4 % Q106 compared to Q105● Norwegian`s international fares vary due to introductory prices
on new routes, and seasonal variation
Minor price w ar (PW I)
Major price w ar (PW II)
Norwegian's average ticket price - index(Q1 03 = 100)
Profitable operation
40
60
80
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
Domestic International
11
CASK AT Q105 LEVEL DUE TO FUEL PRICE INCREASE
0,64
0,60
0,03
0,50
0,52
0,54
0,56
0,58
0,60
0,62
0,64
Q1 05 Q1 06
● Unit costs of 0.63 NOK in Q106,
● Cost reduction of 7 % ● Given same fuel price level as Q105,
EBITDA of - 22 MNOK in Q106
Fuel Q105/ Q106
CASK
12
Increased fleet and crew utilization
● Crew utilization of 680 block hours pr crew pr year, up 12 % from Q1 2005 (609)
● Aircraft utilization of 9.6 block hours pr plane pr day, up 41 % from Q1 2005 (6,8)
Block hours/crew/year
300
400
500
600
700
Q1 04 Q1 05 Q1 06
Block hours/plane/day
5
6
7
8
9
10
Q104 Q105 Q106
13
Lean organization● Carrying approx 7400* passengers per employee ● Approx 50 % growth since Q105● Non core activities outsourced
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Q103 Q104 Q105 Q106
Passenger pr employee50 %
* Annualized
14
Lower distribution costs●Distribution costs pr sold ticket of NOK 23,5
down 10 % from Q1 2005
● Joint partnership with Amadeus will bring costs even further down
Distribution costs per passenger
NOK pr pax
15,0
20,0
25,0
30,0
35,0
40,0
Q1 04 Q1 05 Q1 06
15
Cost development on track to be profitable in Q1
-60
-30
0
30
60
Ebitda Q106 = - 52 MNOK
Passengers = 1,014 MILL
Needed cost reduction pr passenger to break even = 50 NOK
New handling contract
The trainee program
Capacity increase
Distribution costs
Fuel costs from price increase
Cost reduction pr pax
30
10
Leading Nordic LCC
17
Norwegian now fly from Poland to Europe
● New base in Poland from summer 2006● 4 new routes from Warsaw to southern Europe
18
Attractive timetable for corporate travellers
● Norwegian offers high frequencies on major domestic routes
2422
16
8
0
5
10
15
20
25
30
Bergen Trondheim Stavanger Tromsø
Legs from/to OSL
Legs : From OSL and Return OSL
19
Largest direct network to Europe
● Norwegian has 64 direct routes to major European cities● Daily departures to 13 European cities● “First to London” – Norwegian`s morning flight lands at 08.30
International Daily DeparturesParis NiceBerlin AlicanteBudapest PrahaDusseldorf RigaCopenhagen StockholmLondon WarsawMunich
20
Expectations for 2006Expected business environment :● Increased competition on international routes● Strong price competition on northbound routes● Seasonal fluctuation on yield● New “website” and connecting traffic expected to stimulate sales
Expected results:● Q2/Q3 06 total unit cost in the range of NOK 0,52-0,53*
– At current fuel and currency level
● Improved margins for the year
* Expansion in Poland is not expected to be profitable in 2006,
due to start up costs and low introductory prices
Thank you,
- and fly Norwegian!