Norse Atlantic ASA

Investor Presentation • May 31, 2023

Company Presentation 31 May 2023

Norse Atlantic Airways

First quarter 2023 report Explore

Norse at a Glance	03
The Norse Fleet and Network	09
Commercial Strategy and Bookings	15
Q1 2023 Financials	20
Summary	26

INDEX

Norse at a

AIRLINES

FLIGHT Norse Atlantic Airways – The Explorers' Airline

• Established and founded in March 2021 by Bjørn Tore Larsen, CEO and major shareholder All aircraft in operation from 1 July 2023
• Point-to-point transatlantic flights at affordable fares London, New York and Paris will be biggest part of the network
• leases
  • Average ~11 years remaining at fixed lease rates which are approx. half of current market rate
• Offices in Arendal, Norway, London Gatwick, Fort Lauderdale & Paris

15 Boeing 787 Dreamliners on favourable long-term

A low-cost, long-haul transatlantic airline

Ready for peak summer 2023

Ready to go	All regulatory approvals and necessary airport slots secured Organization, including people and systems, in place
Increasing capacity	Bringing new aircraft into production to double Norse seat capacity ahead of peak S23 season Key London market coming; Norse becomes largest transatlantic operator at London Gatwick
Strong forward bookings	Selling more tickets and further in advance and at higher fares than ever before Yields expected to increase during remaining booking window
Ancillary revenue building	Ancillary revenue per passengers increasing Adding additional ancillary revenue streams
Road to profits	Norse is fully financed, 100% by equity and no debt Q3 2023 expected to be first financial period of profits

Building a leading low-cost transatlantic airline in two years: all aircraft in production from 1ˢᵗ July

3) Four aircraft subleased initially and delivered around end June 2022; a fifth added end December 2022

We've been busy, but we ´ re only just getting started…

• Unique in the industry: a fully-fledged, low-cost long-haul operation
• Brand recognition is positive and spreading
• The organization is ready: IT, operations and marketing near fully scaled to a 15 aircraft operation

~900 employees	15 aircraft	~11 years Avg. remaining lease
16² destinations	15% lower opex	period USD >370m NPV of lease
		advantage

• 15¹ modern 787 Dreamliners on long-term leases well below market creates a sustainable cost advantage
• aircraft

Opportunity to profitably sublease excess

Early investments are paying off

Significant value created since inception

Established UK subsidiary is a game changer

• Secured 5 valuable slots at LGW and JFK Allows Norse to serve large and highly attractive
• UK-US market
• Norse will be largest transatlantic airline ex-LGW
• First flight 26 Mar 2023

Significant value created through aircraft leases

Note: 1) 5 aircraft are currently subleased

7

2) 12 destinations by mid-summer 2023 season, 16 destinations by winter 2023 season

Norse ´ s path to a winning business model

High utilization Single fleet type

Collaborations for in-house flight school

Harmonious labour relations

Connecting major markets and focus on primary airports

Two cabin classes for post-Covid demand

Fleet and Network

PART 2

Modern and more environmentally friendly aircraft

• Homogenous fleet of modern 787-9s and -8s
• Freshly checked aircraft more than 2 years until next service

Modernandhomogenous fleet

Lowest carbon emissions per passenger

Superior passenger comfort and experience

• More comfortable cabin altitude with cleaner air and better humidity
• The largest windows on any jet worldwide

Lease contracts increasing in value

Timing is everything: NPV of remaining lease advantage NPV at various rates and WACC = 10%, USDm

• Norse lease rates are capped at approximately 50% of historical cost
• Current lease rates for 787-9s USD 865 to 1,050¹
• The present value of the difference between Norse's lease cost and current market lease is estimated at USD ~370m
  • At 10% WACC and est. current rates of USD 900k/mo.
• The fleet will be fully employed in Norse's operations by 2024, and these numbers are thus to be seen as an indication of the additional earnings potential created by the timing of Norse's market entry

	WACC
Rate (USD/month)	7.5%	10.0%	12.5%
Current sublease margin	190	169	151
800 000	301	267	238
900 000	421	373	333
1 000 000	542	479	427
1 100 000	663	586	522

Shortage of supply of Boeing Dreamliners

600
400
200
0

Norse serves 16 destinations

Summer '23 and Winter '23 destinations currently on sale

• Rapidly increasing available seats for sale
• Summer '23 network is Europe-US only
• Winter '23 includes routes to Caribbean and Thailand

* Some routes are seasonal

Note: ASK = Available Seat Kilometers S23 = Summer 2023 season W23 = Winter 2023 season

Increasing production at the right time

Norse bringing additional aircraft online ahead of peak S23 season

New routes scheduled for S23: May London to Orlando May London to Fort Lauderdale/Miami June London to Washington DC June New York to Rome June London to Los Angeles July London to San Francisco September London to Boston

Additional winter season routes on-sale for

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  • W23

All aircraft generating revenue from 1 July 2023

UK market is key to transatlantic travel

London twice the size market as any other; Paris a clear second with twice the size of the next (Rome)

Note: 1) Top-15 EU bases for EU-US traffic + LON, OSL & BER based on routes to/from NYC, LAX, SFO, WAS, BOS, MIA, and ORL. 2019 data 2) With routes terminating in the UK – may also be served with non-UK AOCs as stop-over

London by far the largest European hub for US traffic, and also has among the highest yields

Large and high yield market creates opportunity to carve out demand, in addition to demand created through market stimulation

Serving the market with flights terminating in the UK requires UK AOC

m m e r c i a l a t e g y a n d k i n g s

C o S t r B o o P A R T 3

Simplicity is key to cost control

1 2 3 4 5

The 5 pillars of Norse commercial strategy

Ancillary Services

Gives flexibility to travellers and extra revenue from thirdparty providers

Norse aims to be the #1 ancillary revenue/pax airline globally

Unbundled low fare structure

Unlocking new areas of demand through low-cost stimulation in highdensity markets

Norse Premium Class

Targeting costconscious business travellers and premium leisure traffic

Best-in-class cargo product

Wide-body aircraft flying direct to key cargo gateways

Revenue from leases and charter

Attractive lease-in rates and seasonal variations enable profits

Rolling seven days bookings in USDm and number of passengers by booking date

Forward bookings increase as network expands

Note: R7 Rev = rolling 7-day average of bookings by aggregate value by booking date; R7 Vol = rolling 7-day average total segments sold by booking date

• S22 season on sale ~3 months in advance
• W22 season on sale ~4 months in advance
• S23 on sale ~5 months in advance
• W23 on sale ~7 months in advance
• S24 expected on sale ~9 months in advance

Increasing selling windows allows for higher yields:

Based on booked fares as of 25 May 2023

Fares increasing overall and on like-for-like basis

• Based on booking date
• Average fare continuing to increase

Ticket revenue per segment

Based on month of flight >35% higher fare for S23 bookings versus flown S22 Net fare comparison

Driving ancillary revenue

Q1 2023 Financials

USD thousands	3 months Q1 2023	3 months Q4 2022	12 months FY 2022
Revenue	39,757	46,428	104,269
Personnel expenses	19,353	17,434	44,462
Fuel, oil & emissions	21,896	27,002	61,793
Other OPEX	24,121	22,346	42,706
SG&A	7,314	5,751	15,630
EBITDAR	(32,926)	(26,103)	(60,323)
Variable aircraft rentals	8,725	13,180	27,263
Depreciation & amortization	20,813	19,402	58,517
EBIT	(62,464)	(58,685)	(146,104)
Net financial items	(8,408)	(8,378)	(28,871)
EBT	(70,873)	(67,063)	(174,974)

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Income statement

Low earnings due to limited production in the historical low season

Q1 2023 revenue down 14% versus prior quarter due to 9% reduced capacity (ASK) and 7% lower revenue per passenger 25% lower cargo revenues Partially compensated by increase in sublease income and charter revenues

Fuel cost down 19% due to lower unit cost and reduced production

Variable aircraft rentals represents cash paid under PBH aircraft lease terms

USD 19 million non-cash aircraft lease accounting cost

Balance sheet

Statement of financial position

\$914 million aircraft right-of-use asset 15 Boeing 787 Dreamliners on leases with average remaining life ~11 years Corresponding lease liability of \$963 million

\$20 million refundable aircraft lease deposits carried at \$16 million

\$67 million receivables from credit card companies for booked tickets

Value adjusted equity position in excess of USD 300 million, including NPV value of the aircraft leases

USD thousands	31 Mar-23	31 Dec-22
Non-current assets	952,148	973,037
Total current assets	130,984	117,202
Total assets	1,083,132	1,090,239
Total equity	(60,337)	10,535
Non-current liabilities	965,875	971,284
Current liabilities	177,595	108,421
Total equity & liabilities	1,083,132	1,090,240
Number of aircraft received	15	15

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Cash flow statement

Q1 2023 cash outflow \$28 million driven by: \$21 million outflow from operations \$8 million outflow from fixed aircraft lease payments

\$42 million total cash held at end Q1 2023

Subsequent equity offering as promised in connection with November 2022 private placement was completed in April 2023, raising net \$13 million

\$50 million total cash held at end May 2023

USD thousands	3 months Q1 2023	3 months Q4 2022	12 months FY 2022
Operating cash flows	(20,773)	(13,264)	(68,639)
Investing cash flows	1,256	7,921	(24,956)
Financing cash flows	(8,529)	27,928	22,589
Forex	366	1,463	1,463
Net change in cash	(27,679)	24,049	(69,543)
Cash at period end	37,030	64,709	64,709
Restricted cash held	5,000	5,000	5,000
Total cash	42,030	69,709	69,709

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Cash flow actual versus projected in equity raise pitch presented Nov-22 (USD)

Cash performance on-track

Actual includes USD 13 million net receipt from repair offering completed April 2023

14 June to 30 Apr 2023

Key operational numbers since first flight

	Jun22	Jul22	Aug22	Sep22	Oct22	Nov22	Dec22	Jan23	Feb23	Mar23	Apr23
Number of aircraft in fleet	11	13	13	13	14	14	15	15	15	15	15
Aircraft subleased out	2	4	4	4	4	4	5	5	5	5	5
ASK (millions)	54	248	505	663	567	293	384	397	344	390	449
RPK (millions)	44	212	349	373	338	145	233	206	172	234	300
Load factor	82%	86%	69%	56%	60%	50%	61%	52%	50%	60%	67%
Number of passengers	6,633	31,842	58,702	62,749	60,836	29,816	44,172	35,150	32,970	42,143	48,847
Number of flights	24	110	254	338	307	190	228	229	203	223	218

PART 5

26

Summary and outlook

Strategy and business case validated	Unit costs in line with target (excl. fuel) and will further improve with increased scale Modern fuel-efficient fleet; lease contracts substantially in-the-money
Flexibility	Sub-leasing of aircraft and seasonal charter work becomes part of the business model Pay-by-the-hour lease terms offer downside protection
Revenue growing	Strong peak S23 bookings Aim to become number 1 ancillary airline in the world
Ramping-up	Travel demand continues post-COVID recovery Scaling up from end May to start July to 10 aircraft under own operation; to 15 by mid 24
Profitability	Target profitability from H2-2023

Once in a lifetime opportunity to build a profitable long haul low cost transatlantic airline

Norse will be...

The first truly low-cost sustainable transatlantic airline

The lowest unit cost airline amongst peers

The highest ancillary revenue per passenger in the industry

The lowest emissions per passenger versus long-haul peers

The most affordable and best value transatlantic product

Thank You For Flying With Us!