Norwegian Air Shuttle New

Good morning and welcome to the second quarter presentation for the Norwegian Group. My name is Jesper Hatletveit and I am the VP of Investor Relations here at Norwegian. Today's presentation will be held by our CEO, Geir Karlsen, and our CFO, Hans-Joergen Wibstad. The presentation will be followed by a Q&A from the audience and the web.

Please go ahead, Geir. Thank you very much, Jesper. Good morning to everyone. Also good morning to the ones listening in from the web and online. I'd like to start with saying that this quarter was coming out a little bit weaker than what we expected. And I will come back to the details on it. But excluding other losses, we delivered 213 million in EBITs. The traffic numbers, the number of passengers is growing, especially with Vidre, where Vidre had a record month historically, with more than 400,000 passengers in a month. We had the ether effect, as we all know. We also had the Iran situation, where we saw a peak in the oil prices, and the oil prices are up 33% year on year. And we also lost a so-called EU ETS case, and we are booking a loss of 733 million in the quarter. That was a disappointment, and we don't really understand the conclusion. Part of that is, you know, the whole thing is non-recurring, obviously, and only part of it is cash as well. On the positive side, we are reducing the cost with 5% year over year. Operational excellence is important. Norwegian punctuality 86.4, Vibøre impressive 94.2. We are cancelling very few flights, as always, and we were rated as the most punctual airline in May in Norwegian. So, to 500 routes. Why connect when you can fly direct? It's still the case. We are the airline with most divers from the Nordics to Europe. NPS score I will come back to in more detail, but very high figures. Very happy to see that REMA came into the spend platform in June, and I will also come back to details on that. Also live with the new sales platform, distribution platform. and we can now offer interlining sales between the two airlines, Idre and Norwegian, and it's already starting to give results. Even if we had a softer quarter, the liquidity position in the company is very comfortable, 13.7 billion, and the balance sheet is something that we are continuing to work with. We have taken delivery of our first owned, 727 MAX 8, We have in total taken delivery of two aircraft from the order that we had with Boeing. We are extremely attractive when it comes to the financial community and financing sources. And we also spent a little bit of time purchasing one lease aircraft back into Norwegian and we have booked a gain of 95 million. Huge transactions done in the quarter where we are acquiring NLTG, Nordic Leisure Travel Group. This is a complementary acquisition where we are now able to offer an additional product to our dear passengers, including hotels, attractions, activities, and so on. We are buying NLTG for 3.5 billion Swedish krona in addition to 300 million shares, and we have a bonus portion of 30 million shares depending on the share price development in Norwegian in the fourth quarter. We are targeting to close this transaction in the fourth quarter of 2026, where Strawberry, Alto and TDR, the owners of NLTG today, will be significant shareholders then in Norwegian. Traffic figures, 7.8 million passengers in the quarter, that's up 3%. On capacity, we are 5% up in the quarter in Norwegian, divided in 3% in April, 5% in May, and 8% in June. Liberø is up 3%, but as you can see, the load factors in both companies are slightly down, and that is a result of the slight softening that we saw Thank you for watching! What did really happen in the second quarter? As you can see, we are into the peak season now, flying more and more passengers month by month. 2.4 million in June. Yields are up, loads are up. But at the same time, the unit revenue came in lower than what we expected. So what happened is that, first we had the Iran situation, where we saw a peak in the fuel price. Unfortunately, we had to increase the ticket prices. It didn't stick really in the market demand-wise, as we had hoped for, but it partly compensated for the increased fuel prices. Then we had a lot of media speculations on the availability of fuel due to the Iran situation, which also had an effect on the booking. Then even if Norwegian did quite well in the World Cup in football, that World Cup situation period will also have an effect on the bookings. So all in all, slightly weaker unit revenue compared to what we expected. Vidrø, the same, or not the same actually, Vidrø is not seeing the same as we are, didn't see the same as we saw in the second quarter. A nice step up in the number of passengers, increased to 1.1 million passengers in the month, 2% up. and then again the historical records monthly passenger figures of 404,000 passengers a month. Very high performance operationally both on functionality and regularity and we are also seeing a very strong interlining traffic between the two airlines. It's at 33% growth year-on-year compared to the same quarter last year. And even if BIDRA is probably not 100% happy with how they delivered on EBIT, I'm quite happy with 193 million for the quarter, looking at the market and how it's developed. So, how does it really look going forward? As you can see on the top left side, you can then see the softening you saw into the second half of April through May. and into June. That is the softening of the markets but you can also see that in the third quarter we are up 5% on capacity, 6% in July alone. You can see a kind of shift in the middle of June where the red line is picking up and that's where we saw the bookings coming back to a more normal level and as such you can say that in mid-June it bottomed And now we are back on track again to some extent. So you can see that in the last couple of weeks the bookings are coming down. That's very normal. That's what we see every year in July when people are actually going on holidays. But you're coming off from a higher level. So then we hope that bookings into the fall is becoming stronger. And that is actually what we are seeing as well. Looking at the right side there you can see that on booked revenue we are above 2025 and we have sold more tickets for all these months from July to October after today compared to last year and I'm happy to see that especially September and October is looking quite quite solid. On the yield side we are selling tickets on a flat yield more or less for the months to come. So it seems like we have been catching up a little bit on what we lost in the second quarter into the third quarter. And I think the third quarter for the two airlines will be relatively good. Happy to see that it has turned around to some extent.

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