Norwegian Air Shuttle ASA

Earnings Release • Aug 24, 2023

Presentation of second quarter 2023

24 August 2023

Highlights

Operating result (EBIT) NOK 651 million in the quarter

• improving yields and reduced fuel cost
• robust cash position liquidity increase to NOK 9.3 billion
• CASK impacted by currency and underlying inflation

Preferred travel partner throughout Nordics

• close to 300 routes across attractive network
• serving customers solely with own operation no wet-lease
• attracting new corporates awarded Norwegian Defence contract with considerable volumes of fossil-free aviation fuel (SAF)

Leading operations vs. peers

• regularity close to 100% during peak summer
• top three on-time European airline in Q2 and July (Cirium)

Capturing opportunities for the future

• Widerøe acquisition sound industry rationale
• creating loyalty programme ecosystem with Strawberry and Avida
• unlocking value from venture appr. NOK 800m gain upon closing
• streamlining capital structure enabling potential future dividend

Delivering on record strong summer

Traffic – PAX per month, load factor and yield

Successful ramp-up into summer – avoiding wet-lease to serve customers solely with own operation

Getting customers to their destinations – regularity close to 100% despite airtraffic-control (ATC) issues – Cirium most on-time European airline

Strong yields and record high unit revenue

Bookings strong throughout summer

Booking momentum continues

• Strong last-minute bookings for holiday travel in July and August
• Booking momentum satisfactory with business travellers returning and autumn holiday planning
• Booked fares significantly above previous years – avg. Sep-Oct fares +20% vs. same time last year

Visibility normalising

• Good visibility for September and October autumn holidays
• Limited visibility from November onwards – as expected this time of year

Preferred travel partner

• Brand most loved airline Norway and second in rest of Nordics1)
• Seamless travel across network with Widerøe
• Market-leading operations most punctual Nordic airline
• Numerous awards for service, product and innovations

7-day rolling sales figures (abs) – All markets2)

Booked Revenue – Sep. to Dec. travel3)

2) Travel anytime, anywhere as of 22 August 2023 3) 2019 adjusted for comparable route network

1) Norwegian Brand Tracker Survey managed by Kantar for Q2 2023

Financial results for Q2 2023

Quarterly financial highlights

Q2 earnings

NOK million	Q2 2023	Q2 2022	Chng. (YoY)
Passenger revenue	5,615	3,970
Ancillary passenger revenue	994	782
Other revenue	262	116
Total operating revenue	6,871	4,868	+41%	Unit revenue up 22%, capacity up 14%
Personnel expenses	1,071	782
Aviation fuel	2,051	2,338	-12%	Fuel price coming lower
Airport and ATC charges	778	585
Handling charges	554	482		Cost items impacted by negative currency effects
Technical maintenance expenses	192	116		and inflation
Other operating expenses	633	476
EBITDAR excl other losses/(gains)	1,594	8 9		Significant improvement in underlying earnings
Other losses/(gains)	25	-5
EBITDAR	1,569	9 3
Aircraft lease, depreciation and amortization	918	834
Reversal of impairment loss re. prepayment on aircraft	0	-2,099		Reinstatement of aircraft prepayment last year
Operating profit (EBIT)	651	1,359
Net financial items	-112	-110
Profit before tax (EBT)	538	1,248

Robust balance sheet

NOK million	30 Jun	31 Mar	Chng
	2023	2023	(QoQ)
Intangible assets	2 113 ,	2 097 ,
Tangible assets	13 669 ,	13 207 ,
Total non-current assets	16 450 ,	15 818 ,	+4%	Two new leased aircraft
Receivables	4 294	3 836		Holdback down to 29%
Cash and cash equivalents	, 9 349	, 8 628	+8%
Total current assets	, 13 870 ,	, 12 572 ,
Assets	30 320	28 389
	,	,
Equity	3 707 ,	3 168 ,	+17%
Non-current debt	11 185 ,	10 974 ,
Other liabilities non-current	2 863 ,	2 411 ,
Total liabilities non-current	14 048 ,	13 385 ,
Air traffic settlement liabilities	6 416 ,	6 160 ,	+4%	Strong bookings ahead of
Current debt	1 832 ,	1 735 ,		peak summer season
Other current liabilities	4 317 ,	3 942 ,
Total liabilities current	12 565 ,	11 837 ,
Liabilities	26 613 ,	25 222 ,
Equity and liabilities	30 320 ,	28 389 ,
Equity ratio (%)	12 2	11 2	1 p.p.	Quarterly earnings

Net interest bearing debt
NOK million	30 Jun 2023	31 Mar 2023	Chng (QoQ)
Cash & equiv	9 349 ,	8 628 ,	+721
Aircraft financing NAS13 Other IB debt Retained Claims Bonds	9 954 , 441 83 2 502 ,	9 562 , 570 101 2 437 ,	+391 +65
NIBD	3 668 ,	4 080 ,	-412

• NIBD reduced in quarter with strong cash flow and addition of two latest-technology aircraft
• 81 aircraft at quarter-end, up from 79 last quarter
• Considering opportunities to optimise and simplify capital structure
• exercising call for NAS13 bond
• potentially enabling for dividend distribution

Improving already strong liquidity position

The way forward

Securing modern fleet for the long-term

Securing fleet for 2024

• Fleet increasing to 91 aircraft for next summer – net increase of ten aircraft from 2023
• Phasing in over 15 aircraft this autumn and next spring
• Finalising compensation settlements related to 2023 aircraft delays

Replacing older generation aircraft

• Redelivery of leased 737 NGs 3 aircraft in 2023 and 4 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
• Aircraft specification optimisation significant cost improvements
• NOK 3.2bn PDP paid-in
• Significant share to be owned –financing for up to ten aircraft secured

Creating loyalty programme ecosystem with partners

A game changer – 7+ million member Nordic loyalty ecosystem to be introduced late 2023 with multiple partners and new offerings including next generation financial services

Creating a loyalty programme ecosystem where members can earn and use loyalty points across different programs

Strawberry and Norwegian creating shared loyalty platform

• Strawberry portal to a world of hotels, restaurants, spas and more – more than 225 hotels across 100 destinations
• Establishing joint company providing a wide offering to both companies' respective members and existing partners
• Major new partners expected to join soon across wide area of products and services
• Deal expected to close in fourth quarter 2023, subject to closing conditions and regulatory approval
• Unlocking value from new business venture – non-recurring gain of approximately NOK 800 million upon closing

Avida becoming the preferred financial partner

• Avida Finans AB, majority owned by KKR with Tine Wollebekk as CEO, offering financial solutions and services across the Nordics
• Entrepreneurial niche player creating next generational financial services in collaboration with loyalty company
• Avida becoming close to 2% shareholder in loyalty company – loyalty company becoming 11% shareholder in Avida

Widerøe – combining highly complementary businesses

• Large regional carrier in Norway
• Major operator of public service operation (PSO) routes
• Fleet comprising 48 aircraft – 45 turbo propelled Dash 8 and three E2 jets
• Ground Handling with full service offering at over 40 airports

Beneficial to all stakeholders

• Customers more destinations and seamless end-to-end connectivity
• Employees becoming part of larger group with more opportunities
• Shareholders highly accretive through complementary networks and significant operational synergies

Transaction details

• Widerøe to be kept as separate business unit and brand – airlines focusing on respective core markets
• Cash consideration NOK 1,125 million – subject to adjustments, including Widerøe 2023 profitability
• Annual synergies of NOK 200 to 300 million
• Closing expected in fourth quarter – pending approval – filing to Competition Authority (NCA) sent 11 Aug.

Summary

• Delivering on record summer
• Attractive route network with close to 300 routes
• Record strong unit revenue in peak summer season
• Serving passengers solely with Norwegian aircraft with own crew

Strong brand loyalty and robust operations

• Leading operations vs. peers top on-time European airline
• Attracting new corporate customers and increasing market share
• Award winning 'Norwegian Reward' programme

Positioning for 2024 and beyond

• Norwegian Armed Forces awarded four-year exclusive contract
• Targeting for 2023 (vs. last year):
• capacity (ASK) 32,500 million kilometres up 19%
• significantly higher unit revenue
• cost level impacted by FX and industry specific inflation effects
• Hedged above 50% of fuel for remaining part of year and 20% for next year
• Widerøe acquisition and loyalty programme ecosystem with partners – realisation from new business venture – appr. NOK 800m Q4 gain
• Capital structure fit-for-purpose enabling for potential dividend distribution

Book tickets at Norwegian.com

Appendix

20 largest shareholders as of 30 June 2023*

	Name Country		Number of shares	Per cent
1	Geveran Trading Company, Ltd.	Cyprus	114,800,512	11.9 %
2	Sundt AS	Norway	94,528,088	9.8 %
3	Folketrygdfondet	Norway	45,793,605	4.8 %
4	Silver Point Capital, L.P.	United States	39,745,000	4.1 %
5	Ballyfin Aviation Limited	Ireland	31,472,703	3.3 %
6	Nordnet Bank AB.	Norway	30,686,184	3.2 %
7	Avanza Bank AB	Sweden	23,398,252	2.4 %
8	Handelsbanken Kapitalförvaltning AB	Sweden	18,632,175	1.9 %
9	Keskinäinen eläkevakuutusyhtiö Varma	Finland	15,500,000	1.6 %
10	Goldman Sachs Asset Management, L.P.	United States	14,109,920	1.5 %
11	DWS Investments UK Limited	United Kingdom	13,182,761	1.4 %
12	KLP Fondsforvaltning AS	Norway	12,361,393	1.3 %
13	Contrarian Capital Management, LLC	United States	12,255,380	1.3 %
14	DNB Asset Management AS	Norway	11,869,324	1.2 %
15	Barclays Capital	United Kingdom	11,350,286	1.2 %
16	BlackRock Institutional Trust Company, N.A.	United States	11,130,733	1.2 %
17	Goldman Sachs International	United Kingdom	9,855,670	1.0 %
18	Svelland Capital (UK) Ltd	United Kingdom	8,581,790	0.9 %
19	Brumm AS	Norway	8,285,480	0.9 %
20	JPMorgan Chase Bank GTS	United Kingdom	8,281,834	0.9 %
	Top 20 shareholders		535,821,090	55.7 %
	Other shareholders		425,697,682	44.3 %
	Total number of shares		961,518,772	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.

Disclaimer

Certain statements included in this presentation contain forward-looking statements, such as statements of future expectations. Although the statements provided are based on the best reasonable assumptions of management of Norwegian Air Shuttle ASA ("Norwegian"), the statements are based on a number of assumptions and forecasts that, by their nature, involve risks and uncertainties. No assurances can be given that the expectations provided in the forwardlooking statements will prove to be correct.

Various factors may cause the actual results of Norwegian to differ materially from those projected in forward-looking statements. These factors include, but are not limited to, (a) general economic conditions, (b) changes in the competitive climate, (c) fluctuations in the price of jet fuel, (d) fluctuations in currency exchange rates, (e) industrial actions, (f) contingencies and legal claims, and (g) legislative, regulatory and political factors.

Norwegian cautions readers of this presentation not to place undue reliance on the forward-looking statements in making an investment decision. Norwegian assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.