Flyr AS — Interim / Quarterly Report 2021

Nov 11, 2021

Q3 2021 11 November 2021

Highlights

This is Flyr

Operations

Financials

Outlook and summary

Highlights Q3 2021

Strong demand growth and improving visibility after full reopening of the society in late September

Flexible organisation enabling an agile approach to route management

Continuous expansion of new routes for sale, concentrating on international leisure routes which has demonstrated high demand

Implemented a modern IT platform enhancing customer experience and cost efficiency

Industry leading customer satisfaction, 98% punctuality and 99% regularity

Aircraft order for 6 aircraft in 2022 + option for 4 in 2023 in place for building an environmentally efficient fleet

Raising NOK 250 million in new equity, reestablishing financial buffer

Highlights

This is Flyr

Operations

Financials

Outlook and summary

Highlights

This is Flyr

Operations

Financials

Outlook and summary

European leisure expansion – stronger ramp up than originally planned due to high demand

• High demand for holiday destinations Malaga, Alicante, Nice, Barcelona and Gran Canaria
• Extending popular European city offering Copenhagen, Paris, Rome, Berlin and Brussels
• Adding attractive ski destinations Salzburg, Milan, Geneva and Grenoble
• Domestic network adjusted to reflect high demand on weekends, and lower demand midweek.

Agile approach to route management – continuously adjusting network to reflect current demand

Improving load factor after route changes and reopening

Increasing momentum

Modern IT platform enhancing customer experience and cost efficiency

IT platform with high scalability and flexibility

• Weekly releases focusing on product development, usability enhancements and increasing distribution capabilities
• Compliant, personalized and relevant communication across channels
• Simple booking with frictionless point-to-point journey leading to high conversion rates
• Collaboration with Vipps enables development of digital products like the Flyr UNG tickets and a conversion friendly customer journey (Vipps log in & payment)

Environmental targets

Modern fleet with lower emission

• Work with the industry and the authorities to achieve the zero-emission target for 2050
• Adapt growth strategy to the actual demand securing sustainable expansion
• Use sustainable fuel and new fuel efficient aircraft with 14% lower fuel consumption
• Will within 2022 have one of the youngest and most environmentally efficient fleet in the Nordics

Highlights

This is Flyr

Operations

Financials

Outlook and summary

The equity issue

All shareholders will be able to participate, at equal terms. All will receive tradeable subscription rights

An EGM will be called to authorize the rights issue, and the subscription period will most likely be in January 2022

Flyr has some 17,000 shareholders, who will receive direct information when they receive their subscription rights

The guarantors ensure that the full NOK 250 will be raised, but it is the shareholders who have the first right to subscribe

Key traffic figures reflect positive momentum after reopening

Key traffic figures

• Load factor and yield development in October positive with substantial increase after reopening.
• Network changed with effect from early October and mid-November. Q3 influenced by low share of international leisure production compared to domestic production
• Ratchet effect from repeat customers and word-ofmouth experience with Flyr
• FTE per aircraft still high (67) due to the ramp-up of production.

	Oct 2021	Q3 2021
Yield	0.61	0.44
Unit revenue (PASK)	0.37	0.17
ASK (1,000)	96.6	235.9
Passengers (1,000)	62.9	100.48
Load Factor	61%	38%
Number of FTE per aircraft	67	87
CO2 per aircraft (1,000 ton) per month	1,77	1,88

Operating expenses is developing according to plan

Income statement

• Revenue in Q3 reflects operations with an average of 15 -16 flights per day
• Unit revenue (PASK) at NOK 0.17, impacted by low demand due to the COVID Delta spread
• Operating expenses according to plan.
• Administration organization in place and fully scalable, can handle planned growth in 2022 without significant increase
• Personnel expenses reflect onboarding and training of flight crew hired in advance of new aircraft in production
• Other Opex include flight related costs in addition to expenses for building IT infrastructure, brand/marketing and wet-lease of NOK 3.2 million

(1 NOK) 000 ,	Q3 2021	YTD 30.09 2021
Revenue	39,609	39,859
Personnel expenses	44,758	75,666
Other operating expenses excl. depr	53,244	96,702
EBITDAR/EBITDA	-142,750	-219,422
Deprecation and amortisations	12,742	17,238
EBIT	-155,493	-236,660
Net financial items	-6,839	-13,062
EBT	-162,332	-249,772

Cash position of MNOK 362,5 at the end of Q3

Total cash movement since startup

• Total funding of NOK 610 million since start-up in October 2020
• Total cash spend since start-up NOK 248 million
• Operations NOK 179 million, of which NOK 116 million in Q3
• Total IT Investments NOK 52 million, whereof 24 million expensed
• Total Lease deposits NOK 17 million
• Cash position higher than anticipated in the business plan, increase in the number of aircraft has been delayed.

Total cash flow since start-up

All long-term liabilities are related to leasing liabilities, no long-term debt

• Equity ratio of 42.5% at 30.09
• Long term liabilities of NOK 300 million
• All related to leasing liabilities
• Current liabilities of NOK 176 million
• Short term leasing commitments of NOK 57 million
• Trade and other liabilities and accruals NOK 88 million
• Available cash at 30.09.21 of NOK 363 million
• Ticket liability (pre-sales) of NOK 31.2 million at Sept 30, increasing to NOK (40.1) million by the end of October - a 29% increase in spite of the end of the Norwegian fall vacations
• Strong financial position to fund expanding flight operations

Balance sheet as per 30.09.2021

Highlights

This is Flyr

Operations

Financials

Demand-driven growth

Gradual offering of domestic and European leisure routes Outlook

• Targeting domestic high demand routes and European leisure destinations
• Expect the current trend of bookings close to departure date to slowly improve towards summer 2022
• Rate of expansion dependent on demand
• Plan for 5 aircraft at YE 2021 and 12-18 at YE 2022 (current firm orders would result in 12)
• Flexible and cost-efficient operations, targeting 38 FTE's per aircraft during 2H 2022
• Targeting a CASK ex. fuel of 0,41 0,43 in 2H 2022, dependent on route network

Summary

Well funded to exploit unique business opportunity

Flexible business plan, allowing for stepwise expansion

Experienced management team and competent organization in place

State-of-the-art IT platform ensures great customer experience and operational efficiency

Good momentum entering Q4

"Bringing people together through easy, friendly, reliable, affordable and sustainable air travel"

Next event:

Traffic figures for November 3. December 2021

Traffic figures for December 5. January 2022

Q4 2021 release 17. February 2022

Appendix

Cash burn of NOK 152 million in Q3, reflecting a quarter heavily influenced by Delta variant and travel restrictions

Cash flow statement

•				Cash flow from operations negative at NOK 121 million
---	--	--	--	-------------------------------------------------------

• Negative EBITDA of NOK 149 million partly offset by changes in working capital
• Cash flow from investment activities negative at NOK 19 million
• NOK 9 million in deposits on leased aircraft
• NOK 8 million in IT infrastructure
• Cash flow from financing activities at negative NOK 12 million
• Repayment of aircraft and facility lease arrangements

(1 NOK) 000 ,	Q3 2021	YTD 30.09 2021
Cash flow from operations	-120,773	-178,177
Cash flow from investing activities	-19,203	-45,754
Cash flow from financing activities	-12,327	572,635
Net change in cash	-152,302	348,704

Nordic model ensuring satisfaction among all stakeholders

Open, lean and small organization

• Headquartered in Oslo with all functions
• Focus on empowering and trusting employees
• All employee agreements according to Nordic standards
• All employees part of profit-sharing program
• 251 employees by end of Q3 2021, all based in Norway

Industry leading customer satisfaction

• Focus on customer-friendly decision-making at all levels
• State-of-the-art IT-systems enabling ease of use creating positive customer experiences
• Customer Care with local language & presence
• 95 % satisfaction level across all channels
• 99% regularity and 98% punctuality

24

Management team

Tonje Wikstrøm Frislid – Chief Executive Officer

Tonje Wikstrøm Frislid became Flyr's CEO in April 2021. She came from her job as unit director in Coor. Wikstrøm Frislid has previously worked for Unibuss and the airline Norwegian. Tonje has a study background in economics, political science and international communication.

Brede Huser – Chief Financial Officer

Brede Huser started as Flyr's CFO when Flyr was established. Brede has more than 19 years of experience from the airline Norwegian, where in the period 2006 - 2015 he held leading positions in the finance department before he in 2015 became director of Norwegian Reward. Before joining Norwegian, Brede worked in finance at Orkla, Arthur Andersen and Ernst & Young.

Asgeir Nyseth – Chief Operating Officer

Asgeir Nyseth has worked as COO in Flyr since 2020. Before joining Flyr, he was director of Babcock Scandinavian Air Ambulance Norway and Sweden. He has solid aviation professional experience, with over 41 years in the industry, including extensive experience from the airline Norwegian as COO. Asgeir also has a background from Lufttransport where he was CEO before joining Norwegian.

Alf Sagen – Chief Technology Officer

Alf Sagen became a part of Flyr in 2021. He has worked as a consultant with and for various players in the aviation industry for many years and CEO in the company Nagarro AS. Sagen participated in the expansion of the airline Norwegian in 2002 and has since held many roles in the company, including responsibility for "ticketless" ticketing.

Thomas Ramdahl – Chief Commercial Officer

Thomas Ramdahl started as Flyr's CCO when Flyr was established. He came from his job as sales director at Høegh Autoliners. Ramdahl previously had more than 20 years of experience from the aviation industry in Norway, and most recently as commercial director of the airline Norwegian from 2014 until he joined Høegh.

Frode Berg – Chief Legal & Strategy Officer

Frode Berg has been part of Flyr since 2020. He has previously worked as legal director in the airline Norwegian and has also been a partner in the law firm Simonsen Vogt Wiig. Frode studied law at the University of Tromsø and has a Master of Laws (LLM) from the University of Cambridge.

Bjørn Erik Barman-Jenssen – Chief Ground Operations Officer

Bjørn Erik Barman-Jenssen has been with Flyr since its establishment. He came from the job as EVP Operational Development in the airline Norwegian. Bjørn Erik has solid aviation professional experience, with over 33 years in the industry. In addition to Norwegian, he has worked in both Braathens and SAS. Bjørn Erik established Norwegian Cargo AS and has, in addition to other positions, held the role of CEO of Norwegian Air Resources AS.

Board of Directors

Erik G. Braathen – Chairman of the board

Erik G. Braathen is the founder and chairman of Flyr. He has extensive experience from the airline business, including being the CEO and part owner of Braathens as well as the chairman of the board of Norwegian Air Shuttle until 2009.

Mr. Braathen is educated from the University of Washington and American Graduate School of International Management. Mr. Braathen has been a member of the board since 2021 and holds 23,051,250 shares in the company.

Tord Meling – Board member

Tord Meling is a board member of Flyr and currently holds the position as investment director of Ojada AS. He brings over ten years of experience from Norwegian Air Shuttle, including close to six years as the head of aircraft financing. Mr. Meling has Master of Science in Business and Economics from the Norwegian School of Economics. Mr. Meling has been a member of the board since 2020 and holds 750,000 shares in the company.

Maurice Mason - Board member

Maurice Mason has well over 30 years of experience in commercial aviation with a particular focus on developing low cost airlines around the world. Mr. Mason is based in Ireland and is the managing director of Wellbeing Financial Services Unlimited (d/b/a Kite Investments), which was established by him in 2002. Among other investments, Kite co-invested with Irelandia, the Ryan family investment fund, until May 2012, in the development of low cost airlines in Asia (Tiger Airways), the US (Allegiant Travel Company) and Latin America (VivaAerobus in Mexico and Viva Colombia). Maurice graduated from Trinity College Dublin in 1985 with degrees in Mechanical Engineering and Maths. Mr. Mason has been a member of the board since 2021 and holds 750,000 shares in the company.