Norwegian Air Shuttle ASA

Earnings Release • Oct 26, 2022

Presentation of third quarter 2022

26 October 2022

Highlights

• Delivering customers to destinations in face of industry challenges

• robust operations with regularity at 99.4%

• Corporate travellers choosing Norwegian

• key routes on par with 2019

• Widerøe co-operation with seamless travel across network

• Operating profit (EBIT) NOK 1,032 million

• record strong traffic, but headwinds from fuel and FX
• CASK ex. fuel NOK 0.39 focusing on cost and efficiency
• strong cash flow liquidity position NOK 8.2 billion

Norwegian celebrating 20-year anniversary – 300 million passengers carried and 60+ awards received

Record strong summer traffic

• Strong pent-up demand – customers longing to travel to Norwegian's key destinations
• The reliable travel option – regularity close to 100% – wet-leasing to avoid cancellations
• Record-strong load and unit revenue
• Stable traffic into October

Stable bookings into winter season

Booking momentum

• Customers booking close to travel date
• Bookings stabilising after summer holiday season
• Corporate travellers valuing Norwegian's regularity and strong on-time performance

Attractive winter & summer 2023 program

• 274 routes on offer across attractive network
• Summer 2023 program - increased frequencies and new destinations

7-day rolling sales figures (abs) – All markets*

*Travel anytime, company data as of 19 October 2022

Business travellers choosing Norwegian

Strong operational performance

• Corporate revenue returning to pre-pandemic levels
• Travellers above 2019 in September on key domestic routes
• Few cancellations with regularity at 99.4%
• Strong on-time record

Preferred travel partner

• Significant shift in corporate share of wallet
• Large corporates state "over 50% of travel with Norwegian"
• Brand most loved and trusted airline across Scandinavia*

Future for all business travellers

• Widerøe co-operation seamless travel across networks
• Developing offering to SMEs
• SAF product offering and strong sustainability commitment

Identified corporate revenue – increasing through 2022

Q3 corporate revenue exceeding pre-pandemic

Financial results for Q3 2022

Quarterly financial highlights

Revenues	Unit revenue - total		Passenger traffic (million RPK)
		0.78			7,934
Record-high unit revenue	0.62			6,190
Ancillary NOK 172 per pax	0.49		2,861
	Q3 2021 Q2 2022	Q3 2022	Q3 2021	Q2 2022	Q3 2022
Profits		EBITDAR (NOK million)		1,526
Positive bottom line – EBT NOK 910 million
Earnings affected by fuel and FX headwinds		21
CASK ex. fuel NOK 0.39 in quarter

Balance sheet

• Strong liquidity position into winter season
• Equity ratio increased to 19.6%
• Significant cash build in quarter

-214

Q3 2021 Q2 2022 Q3 2022

Q3 earnings – operating profit (EBIT) above 1bn

NOK million	Q3 2022	Q2 2022	Chng (QoQ)
Passenger revenue	5 936 ,	3 970 ,	+50%	Record strong load and unit revenue
Ancillary passenger revenue	1 047 ,	782
Other revenue	133	116
Total operating revenue	7 116 ,	4 868 ,	+46%
Personnel expenses	687	782
Aviation fuel	2 598 ,	2 338 ,	+11%	Fuel price remains elevated
Airport and ATC charges	682	585
Handling charges	562	482		Weak NOK impacting cost lines
Technical maintenance expenses	503	424
Other operating expenses	515	476
losses/(gains) EBITDAR excl other	1 569 ,	-219	+1 788 ,	Strong underlying earnings
Other losses/(gains)	43	-5
EBITDAR	1 526 ,	-214
Aircraft lease depreciation and amortization ,	494	527
Reversal of impairment loss aircraft re.prepayment on	0	-2 099 ,
Operating profit (EBIT)	1 032 ,	1 359 ,
financial Net items	-122	-110
Profit before (EBT) tax	910	1 248 ,

Scale and cost initiatives – macro headwinds

• Fuel cost remain elevated due to high fuel price and strong USD
• initiated hedging on fuel in October
• Personnel lower with higher block hours – sound collaboration with unions
• Airport & ATC and handling charges increasing with currency headwind
• Technical benefitting from increased traffic – headwind from currency
• Other OPEX scale effects
• Lease expenses benefiting from increasing scale – headwind from strong USD

Robust balance sheet going into winter

	Sep 30	30 Jun	Chng
NOK million	2022	2022	(QoQ)
Intangible assets	2 092 ,	2 082 ,
Tangible assets	11 258 ,	9 834 ,		Aircraft prepayment
Total non-current assets	13 735 ,	12 203 ,	+13%	and lease revaluation
Receivables	2 725	4 331		Holdback (%) reduced to 56%
Cash and cash	, 8 190	, 543 7		Strong operational cash flow
equivalents Total current assets	, 11 106	, 11 948
	,	,
Assets	24 841 ,	24 151 ,	+3%
Equity	4 859 ,	3 654 ,	+33%	Improved equity position
Non-current debt	9 409 ,	8 974 ,
Other liabilities non-current	2 127 ,	1 663 ,
Total non-current liabilities	11 536 ,	10 636 ,
Air traffic settlement liabilities	3 102 ,	4 805 ,		Seasonal reduction
Current debt	1 454 ,	1 301 ,
Other liabilities current	3 890 ,	3 755 ,
Total liabilities current	8 446 ,	9 860 ,	-14%
Liabilities	19 982	20 497
	,	,
Equity and liabilities	24 841 ,	24 151 ,
(%) Equity ratio	19 6	15 1

Net interest bearing debt
NOK million	30 Sep 2022	30 Jun 2022	Chng (QoQ)
Cash & equiv	8 190 ,	7 543 ,	+647
Aircraft financing NAS 13 Other IB debt Claims Retained Bonds	480 7 , 572 135 2 676 ,	6 942 , 585 134 2 614 ,	+538
NIBD	2 673 ,	2 732 ,	-59

• Marginal NIBD decrease in quarter
• Cash build in quarter
• Aircraft financing increase with 2 additional aircraft and currency revaluation

Cash flow – strong cash position

• Strong liquidity position heading into winter season
• Holdback down to 56% from above 100% at 31.12
• Limited aircraft prepayments to Boeing in 2023 and 2024 – NOK 3.2bn paid-in

The way forward

Securing a modern long-term fleet

Securing fleet for 2024

• Leases secured for 11 new 737 MAX 8 at competitive terms
• Delivering in advance of summer 2024 season

Replacing older generation aircraft

• Redelivery of leased 737 NGs 4 aircraft in fall 2023 and 5 in 2024
• Replaced by fuel-efficient aircraft with significant cost savings – above 14% reduced fuel-burn
• Serving customers latest technology 40% noise reduction

Aircraft order delivery from 2025

• Order for 50 737 MAX 8 aircraft delivery 2025-2028
• Option for additional 30 aircraft delivery 2028-2030
• Attractive pricing and inflation protection
• NOK 3.2 billion PDP paid-in
• Significant share to be owned reducing overall financing cost

Current committed fleet Aircraft order Option New tech. aircraft at year-end

Summary

Well prepared for winter season

• Utilising fleet flexibility 25% capacity reduction
• Bookings remaining encouraging, but uncertain macro environment
• Strong focus on cost and efficiency

Robust balance sheet

• Enter winter season with NOK 8.2bn in cash
• Improved equity position
• Aircraft order improving financial flexibility

Strong brand loyalty and robust operations

• Leading regularity vs. peers
• Business travellers choosing Norwegian
• Widerøe co-operation with seamless travel across networks
• Most trusted airline in Scandinavia

Book tickets at Norwegian.com

Appendix

20 largest shareholders as of 30 September 2022*

	Name	Country	Number of shares	Per cent
1	Geveran Trading Company, Ltd.	Cyprus	132,214,986	14.2 %
2	Sundt AS	Norway	104,103,198	11.2 %
3	Folketrygdfondet	Norway	46,651,798	5.0 %
4	Silver Point Capital, L.P.	United States	45,219,500	4.9 %
5	Davy Stockbrokers	Ireland	31,856,825	3.4 %
6	Nordnet Bank AB.	Norway	31,234,891	3.4 %
7	Handelsbanken Kapitalförvaltning AB	Sweden	28,284,595	3.0 %
8	Keskinäinen eläkevakuutusyhtiö Varma	Finland	27,500,000	3.0 %
9	Avanza Bank AB	Sweden	25,385,820	2.7 %
10	DNB Asset Management AS	Norway	20,293,116	2.2 %
11	Contrarian Capital Management, LLC	United States	18,304,923	2.0 %
12	Retail Investors Holding 20,000 to 50,000 shares	Norway	14,004,570	1.5 %
13	Brumm AS	Norway	10,000,942	1.1 %
14	Arctic Fund Management AS	Norway	9,779,799	1.1 %
15	Swedbank AB	Sweden	9,776,993	1.1 %
16	Nordea Funds Oy	Finland	9,439,301	1.0 %
17	Svelland Capital (UK) Ltd	United Kingdom	8,217,617	0.9 %
18	KLP Fondsforvaltning AS	Norway	8,080,884	0.9 %
19	HSBC Trinkaus & Burkhardt AG	Germany	7,658,920	0.8 %
20	BlackRock Institutional Trust Company, N.A.	United States	6,989,630	0.8 %
	Top 20 shareholders		594,998,308	64.0 %
	Other shareholders		334,991,431	36.0 %
	Total number of shares		929,989,739	100.0 %

*) The data is obtained through third-party analysis of beneficial ownership and fund manager information provided in replies to ownership notices issued to custodians. Reasonable efforts have been made to verify the data, however Norwegian Air Shuttle ASA cannot guarantee the accuracy of the analysis.