SAS AB Analyst Handout st Quarter 23 First quarter even weaker than expected st Quarter 23 probably weakest quarter in history for European airlines Unprecedented number of negative factors Weaker world economies Significant yield pressure and pressure on traffic volumes Iraq and SARS situation Additional pressure on traffic volumes Severe impact on revenues difficult to offset in the short term Stockholm SAS Head office, May 3th London Savoy Hotel, May 5th Short term actions Capacity reductions implemented and salary freeze 23 Cost reductions highest priority. Significant measures under implementation Plan A completed as planned Plan B ahead of plan Plan C rapid implementation 2 2 Group airlines recent capacity adjustments down ASK down 5-% down 7% down 5-% 5-% from May/June SAS Group weakest Quarter ever st Quarter MSEK 23 22 Adj. change Revenue 3 7* 3 775* -4,5%** EBITDAR -398 584 EBT bef. overcapacity - 739^ - 446 EBT bef. cap gains - 939-33 * Spanair not consolidated Jan-Feb 22 ** Adjusted for comparable units ^ EBT before gains and cost of in phace out of overcapacity corresponding to MSEK 2 3 3 4 4
SAS Group st Quarter EBITDAR and CFROI MSEK 23 22 Revenue 3 7 3 775 EBITDAR -398 584 EBITDAR -3% 4% margin CFROI % 6% SAS Group 22 Quarterly EBT EBT bef gains MSEK million 5 5-5 - - 5-2 -2 5 77 42-42 -63-33 8 5-89 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q 2 22 23-939 5 5 6 6 Scandinavian Airlines 23/22 Quarterly EBITDAR development EBITDAR, Scandinavian Airlines MSEK 2 Severe Revenue Pressure Passenger revenues down MSEK Scandinavian Airlines st Quarter Revenues 6 588 MSEK - 6.3 % 5 5-5 Q Q2 Q3 Q4 Q 22 23 Volume - 6.3 % Yields* - 8.8 % Currency -.8 % * Including Intercont effect and reduced travel agency comissions 7 7 8 8
5 5 5 5 6 7 8 9 2 3 4 5 6 7 8 9 2 2 22 23 24 Time S 3 W2 S 2 AES TRD ALC TOS ALF SV G AMS NCE ARN MX P BDU MAN BG O LHR KRS KK N HA U ST N SFJ SEA PRG POZ PMI GO T SV G ST R PE K OSL ORD FRA TRD TLV SV O ORB NRT NRK FCO VNO VSTVXO VIE TRF BOO BR U CDG CPH DUB DUS EVE EW R WAW WROZRH NC E MX P MUC MAN MAD LIN LHR AG H AMS BR U VXO WAW ZRH CD G VNO CPH UME DU B TXL DUS TMP EW R TLL FCO TKU FRA SV O GOT STN GV A SFT HAM SDL HEL RNB KID OS L KL R OSD KRN ORD KSD AAL OER LED AA R AGPAL NCE LH R CAMS MX P MMX LL A LIN ARN BCNBGO BH X BK K BLQ BRU BU D CD G CGN DEL DUB DU S EW R FCO FRA GDN GOT GVA HAJ HAM HEL IAD JKG KGD KSDKRK LE D SAS Group s path to profitability and long term competitiveness 2 22 23- A B C Short term measures To compensate for Yield pressure Insurance costs Inflationary effects Implemented according to plan Structural measures MSEK 6 4 with full effect 25 whereof 6 MSEK revenue enhancement 3 MSEK 23 5 5 MSEK 24 6 4 MSEK 25 Implementation ahead of plan Long term profitability and competitiveness MSEK 8 MSEK + MSEK in Subs. & Affiliated Airlines Efficient production platform New Business model Enable active price reductions Clear group portfolio view Rapid implementation Major steps of change implemented so far New organization implemented in July 22 Clear responsibilities & transparency New production philosophy hub and spoke 95% Reduced traffic peaks in Copenhagen Nytt koncept New distribution strategy net pricing ROSA Reduction of Overhead Support & Administration reduction of MSEK 8 in costs Changed labour agreements => far reaching productivity and compensation improvements New product concepts Scandinavian Direct and a new Europe concept Salary freeze from April 23 9 9 Key outcome of union negotiations Pilots Work day from,5 to 2 hrs/day Hours/week up from 42 to 45 Pilot blh 7 hours short haul 75 long haul Pay freeze 23/24 Cabin crew negotiations adjourned Implementation of better utilization measures as from July Redundancies to come gradually July/August SAS Technical Services Base Maintenance to Stockholm New schedule agreements Other personell Per diem Overhead & Administration reduction of 5% Next steps New Organization Scandinavian Airlines Three bases Decentralization Production from bases Crew personell Significantly improve aircraft utilization crew utilization Technical Base Maintenance to Stockholm Impact of Plan C in 23 approximately MSEK 4 2 2
What characterizes an highly efficient airline? Efficient production platform The efficient airline The SAS Group targeted position in the aviation market a greater diversity of travel choices Traffic flows Geography size of markets customers - competitors Aircraft High utilization Short/ Medium haul 9- hrs Long haul 5 hrs minimize stopovers Few aircraft types One base one hub Crew Minimize passive transfers and night stops Crew utilization 7-9 blh Other conditions in line with government regulations Few aircraft types Technical maintenance Critical mass Allocation of bases A/c types standardized aircraft Station service High level automation Uncomplicated products Sales & Distribution Cheapest prices only on the internet Strong incentive to use internet for most other ticket types Simple price structures Efficient call center structure Overhead & Support Simple organization Uncomplicated planning process one base = one aircraft type Uncomplicated products Business models Adapted for each business flow Future role of each airline in the group Competitiveness - profitability Efficient production platform Given flow and business model Review of the roles of the group airlines in the groups traffic network 3 3 4 4 Traffic flow determine cost level Competitive unit cost in each traffic flow Domestic and southern Europe most comodity like type of flow Big five European destination and intercontinetnal room for more premium product features Enable active price reductions Long term profitability and competitveness Strategic development Intercontinental and Europe (2 service-levels) On par with best full service operators in Europe (price, costs, service) Lowest prices close to the levels of the low cost carriers (on main airports) Intrascandinavia, domestic and Southern Europe On par with (price, costs and service) with the low cost carriers (on main airports) 5 5 6 6
Group gapg analysis vs high efficiency airlines (base 23) 25-4% (pending type of traffic flow) Mainly in aircraft utilization, overhead costs, crew utilization, complexity 5-% (Norwegian domestic) Mainly in aircraft and crew utilization At least % Meet most criteria's today Meet most criteria's today (-5% gap Finland- Scandinavia) Potential of 8 MSEK in Scandinavian Airlines & Support Businesses Total identified potential New agreements Production In flight Overhead SK Overhead Shared Services SGS/STS/WS Base 23* 6 3 4 6 9 8 5 Initiative New agreements with Pilots Cabin crew - Separation of the bases - More effecient traffic planning and more co-ordination with crew 5% staff reduction staff reduction Servicelevel, call centers, increased on-line sale One base for heavy maintenance 7 7 * Including effects from Structural measures 238 8 Streamlined organization for a/c and flight deck SAS Technical Services (STS) concentrate its maintenance to Stockholm OSL C/A, F/D MD, 737, A32 CPH CPH STO OSL OSL C/A, F/D MD, 737, A32 C/A, F/D MD, 737, A32 OSL C/A, F/D 737 C/A, F/D MD CPH STO C/A, F/D 737 (MD) Base maintenance to Stockholm but heavy maintenance in Oslo. Line maintenance at all airports. Approximately 9 redundancies due to shift Additional measures to be implemented to reduce costs significantly Advantage Improved a/c productivity (less complex planning) Reduced type costs for C/A and F/D (productivity and stand-by) Reduced type costs for technical maintenance (personal, spare parts and quality) Overhead reductions by 5% in Scandinavian Airlines - To be implemented as from August 9 9 2 2
Scandinavian Airlines production system simplified with full co-ordination with crew A B C Before short term measures Structural measures No hub & spoke for aircraft No co-ordination between aircraft and crew Hub & spoke for aircraft No co-ordination between aircraft and crew Long term competitiveness A/C Crew A/C and rew together Hub & spoke for aircraft High co-ordination between aircraft and crew Europe: Business Class premium market medium haul still valid Service and new procedures onboard focuses on Business Class A new meal concept meets customers expectations: fewer, bigger, simpler and tastier dishes of high quality Cold Scandinavian breakfast with warm bread and good coffee 2 2 22 22 Snowflake over 7% cabin factor in April st Quarter revenues normally MSEK 5 2 weaker than Q2 January, February, July and December seasonally weak months Revenues in Q in average 6% lower than Q2 the last four years Acquisition of Spanair has reduced seasonality slightly Winter Summer Winter More than bookings before first take off Trip is booked one way. Two single trips area round trip One price is offered on each separate booking occasion No advance booking rules, no stay-away rules = simple and clear rules jan feb mar apr maj jun jul aug sep okt nov dec 999 2 2 22 23 www.flysnowflake.com 23 24 23 24
Significant pressure on revenue halts EBITDAR improvement Earnings before tax - business area EBITDAR MSEK million 3 5 3 2 5 2 5 5-5 - Q Q2 Q3 Q4 2 22 23 EBITDAR in Q 23 was -398 (584) MSEK EBITDAR Scandin Airl. -382 MSEK Braathens 4 MSEK Spanair -9 MSEK Widerøe 56 MSEK Air Botnia 6 MSEK Business area Q 3 Q 2 Change Scandinavian Airlines - 253-849 -44 Subsidiary & aff. Airlines -564-35 -24 Airlines Support Businesses -28-9 -9 Airline Related Businesses -6 +34-5 Hotels -5-85 -3 Group eliminations 2-77 EBT - 876-446 -43 25 26 25 26 Weak and uncertainty on Scandinavian Airlines markets January March 23 22 Passenger revenue 6 588 7 866 Other revenue 846 7 Operating revenue 7 434 8 576 EBITDAR -382 257 EBIT - 86-664 EBT - 253-849 27 28 27 28
Measures and Turnaround offset by severe pressure on revenues MRD,6,4,2 -,2 -,4 -,6 -,8 - -,2 -,4 Volume (RPK) -6% -,5 Yield -9% -,7 (,2) Total revenue,5 Total costs 29, Lease, depr, Net financ. 29 (,5) Turnaround +,8 Provisons +,2 Volume +,2 Increased prices: Fuel & Governm. -,3 Inflationary comp. -,5 Others incl curren. +, Total change Number of employees down payroll expenses up due to pensions and payroll overhang from 2 MSEK 8 7 6 Payroll cost Scandinavian Airlines - 593 Act 22-3 +3-2 -5-3 Pay increases Volume Pension Currency Other 3 3-848 Act 23 Number of employees down 8,5%, but offset by increased pension costs and pay increases Pay freeze as from April 23 for all employees in Scandinavian Airlines 3 pilots to leave as from April 5% of overhead and administration reduction to be implemented in Plan C Scandinavian Airlines Number of personnel Operating unit cost trend reversed 8 7 5 7 6 5 6 7 778 JAN2 FEB MAR APR MAJ JUN JUL AUG SEP OKT NOV ACT 3 6 995 DEC JAN-3 FEB MAR APR MAJ JUN 3 Forecast JUL AUG SEP OKT NOV DEC 6 67 Index last year (currency adjusted) Scandinavian Airlines % 8% 6% 4% 2% % -2% -4% st Q 2 2nd Q 2 3rd Q 2 4th Q 2 st Q 22 2nd Q 22 3rd Q 22 32 4th Q 22 st Q 23 32 Units costs are down in spite of reduced volumes (ASK) (-3%) Cost reductions give effect Q affected by costs for over capacity * * = Method change
Plan B ahead of plan Total financial effect of implemented activities compared to plan MSEK 64 64 44 2 3% 38 26 4% Plan Status March 23 33 Number of activities compared to plan 33 73 73 44 43 4% 29 3 To be implemented Implemented 4% Plan Status March 23 4% of Plan B implemented MSEK 7 6 5 4 3 2 nov-2 feb-3 may-3 aug-3 nov-3 feb-4 may-4 aug-4 34 34 nov-4 feb-5 may-5 aug-5 nov-5 Target - EBT effect 25 Captured - EBT effect 25 Reduction in capacity in 23 for Scandinavian Airlines Scandinavian Airlines key airline profitability drivers Domestic incl. intrascand Europe Intercontinental Total Capacity forecast for 23 vs. 22-8% +4% +% +% Recent adjustment -2% -4% -3% -3% 23 vs 22 January-March Traffic (RPK) down 6,3% Cabin Factor down 2, p.u. Yields (currency adjusted) down 8,8% Unit costs down 2,% 35 35 36 36
Passenger Yield January-March 23 vs 22 Nominal Currency Adjusted Route Sector yield effect yield Scandinavian Airline 89 98 9 Intercontinental 87 8 94 Europe 94 2 95 Intrascandinavian 96 96 Denmark* 32 33 Norway 8 97 5 Sweden 98 98 *) Incl Greenland 22 Passenger load factor down for most Group airlines Total traffic decreased by 4,2% vs. Q in 22 Total capacity reduced by,4% vs. Q in 22 Group passenger load factors hit by weak economies, Iraq and SARS situation Q passenger load factors Scandinavian Airlines -2, p.u. 6,9% Spanair -4,3 p.u. 55,% Braathens +,3 p.u. 52,7% Widerøe +, p.u. 49,% Air Botnia -2,3 p.u. 4,% 37 37 38 38 SAS Group exposure for SARS SARS exposure to only 5% of revenues Revenue distribution 22 Europe 42% USA 7% Asia 5% Dom. Norway 22% Intrascand 2% Dom. Denmark 2% Dom. Sweden % Pass load factor (%) 3 weeks roling Scandinavian Airlines passenger load factors in line with AEA average 8 75 7 5 9 3 7 2 25 29 33 37 4 45 49 5 9 3 65 6 55 5 45 4 Week 22-23 Source: AEA SK (Geograpical Europe) Spanair AEA (Geograpical Europe) 39 39 4 4
3 7 3 7 Yield development under pressure Scandinavian Airlines Pressure on yield accelerated in 4th Quarter Continued pressure st Quarter same level % 5% % -5% -% -5% Europe (yield) change vs. last year Jan Feb Mar Apr May Jun jul Aug Sep Oct Nov Dec 4 4 Europe 2 per. Mov. Avg. (Europe) Traffic on North Atlantic hit by war in Iraq but recovery noted in bookings RPK 8 6 4 2-2 -4-6 95 9 85 8 75 7 65 6 January February March 37 42 47 52 5 Cabin factor (%) North Atlantic April May June Month SAS AEA July August September October November December January February March 42 5 2 25 3 35 4 45 5 3 8 3 Airbus A34 introduced on New York many routes Reductions to/from New York in April, May & June Traffic in Q 23: European airlines (AEA) traffic up 4,% SAS traffic up 5,6% 42 Asian traffic severely affected by SARS 4 3 2 - -2-3 95 9 85 8 75 7 RPK 39 43 47 5 3 7 Week Cabin factor (%) Asia SAS AEA January February March April May June July August September October November December Month SAS AEA 43 5 9 23 27 3 35 39 43 47 5 3 7 January February March 43 Scandinavian Airlines ranked high in customer surveys Reduced capacity to Beijing and Bangkok/Singapore Strengthened market position Traffic in Q 23: AEA traffic down,8% SAS traffic up 6,6% 3 25 2 5 5-5 - -5-2 39 75 7 65 6 55 5 45 European routes affected by uncertain market conditions RPK 43 47 5 5 9 Week Cabin factor (%) Europe January February March April 23 Month SAS AEA 44 27 3 35 39 43 47 SAS 5 May June July August September October November December January AEA February March 44 Weak market Cabin factor worse Traffic in Q 23: AEA traffic down,% SAS traffic down 6,8% Some recovery in April
Yields under sever pressure 2- st Quarter 23 Total system - currency adjusted ECA European cooperation agreement continued negative effects 2% % -2% -4% -6% -8% -% -2% 3rd Quarter 2 4th Quarter 2 st Quarter 22 2nd Quarter 22 3rd Quarter 22 4th Quarter 22 st Quarter 23 Yields down 8,8% in st Quarter 23 Class mix negative Campaigns More RPK s of intercontinental traffic with lower yield Positive Easter effect in March Reduced commissions by ~3% Tri-party Joint Venture agreement with BMI, Lufthansa and SAS signed November 9, 999 In effect from January, 2 Main scope: To integrate the parties scheduled pass. transport to/ from London/ Manchester Negative result effect 22: MSEK 48 (335) Effect Q 23 - MSEK 2 45 45 46 46 US Dollar per Barrel Brent Crude vs. Jet Fuel January 998 to Date 6 5 4 3 2 998--2 998-3-3 Brent st Nearby Close Jet CIF Cargoes NWE 998-6-26 998-9-2 998-2-6 999-3-6 999-6-5 999-9-8 999-2- 2-2-29 2-5-26 2-8-2 47 2--4 2-2-2 2-5- 2-8-3 2--3 47 22--25 22-4-24 22-7-23 22--5 23-- 23-4-4 45 4 35 3 25 2 5 5 US Dollar per Metric Ton 23 fully hedged Average rates: 2 265 USD/MT 2 255 USD/MT Q 22 96 USD/MT Q2 22 226 USD/MT Q3 22 235 USD/MT Q4 22 258 USD/MT Q 23 278 USD/MT Current hedging until year end 95% Call options in jet Estimated jet fuel cost MSEK 3 4 48 48
Scandinavian Airlines new net pricing concept as from 23 Today 4/7 4,7% % SAS Price SAS Price Agent mark-up possibility Tomorrow SAS Price SAS Price SAS Price SAS Price SAS direct sales mark-up Net price concept to be introduced st January 23 Prices lowered with same amount as commissions (app 3%) Agent will set their own price to the customer Markup can vary from channel to channel Introduction of service fees in SAS direct channels Introduction of new agent program 9% of agents agreed 35% 3% 25% 2% 5% % 5% % Electronic Channels increased to 3% in Q jan- mar- maj- jul- sep- nov- -jan -mar -maj -nov Q-22 Q3-22 Q-23 % Sold - Travel Pass, Travel Pass Corporate, ETIX, Internet % Sold via Internet Important to reduce cost of sales Total volume E-channels in Q MSEK 2 27 3% of total passenger sales in Q Lowest price on homepage 49 49 5 5 Income Subsidiary & Affiliated Airlines (MSEK) January March 23 22* Operating revenues 3 798 2 832 Operating expenses -3 726-2 379 EBITDAR +72 +453 EBT bef gains -564-35 * = Spanair was included as an affiliated company Jan/Feb 22 5 5 52 52
Subsidiary & Affiliated Airlines not immune by weaker market New improvement measures of MSEK initiated Jan-Mar in MSEK Spanish market grad becoming weaker Revenue declined by,8% New price concept released One way pricing and booking Availability pricing Extra 3 EUR for Business Class Revenues 375,7% 549 3,5% 64 9,3% 223-3,4% EBITDAR -58 n.m 4-63% 56-33% 6-84% Spanair joined Star Alliance as from April 23 EBT -369-25,% -92 n.m -3 n.m -29 n.m January March 23 22 Operating revenue 375 352 EBT -369-295 53 53 54 54 Braathens hit by weak market and periodisation of maintenance costs Weak Norwegian market Maintenance costs increased by 62 MSEK Substantial new cost measures initiated Air Botnia affected by weak market New nonstop route Helsinki-Brussel introduced as from Q4 22 and Helsinki-Düsseldorf as from Q 23 Widerøe hit by weak yield development Slowdown in Norwegian market Improvement measures of under way January March 23 22 Operating revenue 549 496 EBT -92 38 January March 23 22 Operating revenue 223 23 EBT -29-4 January March 23 22 Operating revenue 64 586 EBT -3 3 55 55 56 56
Airline Support January March (MSEK) 23 22 Operating revenues 4 755 4 973 Operating expenses -4 72-4 896 EBITDA +34 +77 EBT -28-9 Units included in the business area: SAS Cargo SAS Technical Services Scandinavian Ground Services SAS World Sales 57 57 58 58 SAS World Sales (SWS) Responsible for the SAS Group s sales and distribution. Revenue decreased by MSEK 259 Improvement measures according to plan SAS Technical Services (STS) Responsible for technical maintenance Revenues under pressure as airlines reduce capacity Additional measures to be implemented to reduce costs significantly January March 23 22 Total revenue 24 5 Whereof external 25,5,3 EBITDA 5-22 EBIT -34 Employees 2447 2553 January March 23 22 Total revenue 463 465 Whereof external 4,% 4,6% EBITDA 5 75 EBIT -9 3 Employee 3 69 3 895 59 59 6 6
Scandinavian Ground Services (SGS) Increased volumes for SAS Cargo Responsible for passenger and ramp services Affected by lower volumes Additional measures to be implemented to reduce costs Improved result although yield down by 9,2% Weak market to USA Additional improvement measures under implementation January March 23 22 Total revenue 392 473 Whereof external 2,3%,9% EBITDA -77 25 EBIT - -7 Employee 6 835 6 497 January March 23 22 Total revenue 748 647 Wherof traffic rev 557 523 EBITDA 24 EBIT 4 - EBT -3-6 6 62 62 Income Business Area Airline Related Business SAS Cargo moved to Business Area Airlines Support Businesses in 22 January - March MSEK 23 22 Operating revenues 66 467 Operating expenses - 28-336 EBITDA 38 3 Income before taxes -6 34 63 63 64 64
Scandinavian IT Group Implementation of Turnaround according to plan New agreement with TravelSky for the chinese market SAS Trading affected by weaker NOK SAS Trading is a business in the SAS Group and a operator within Travel Retail. SAS Trading had 47 employees at year end 22 Result negatively affected by weaker Norwegian currency January March 23 22 Total revenue 523 557 Wherof external rev 9,4% 3,9% EBITDA 35 49 EBIT 6 EBT 6 www.scandinavian.net A new Flightshop opened at Poznan airport in March January-March 23 22 Total Revenues 346 474 EBITDA -39-5 Profit before taxes -3-3 www.scandinavianit.com 65 66 65 66 SAS Flight Academy Training centers for pilots and other personell. About new customers in Q Jetpak The company is % owned by SAS Group and has 76 employees Jetpak is one of the fastest growing companies withing expresslogistic in the Nordic countries. Weak market in first quarter, but good cost controll offset negative result January-March 23 22 Total Revenues 28 6 January-March 23 22 Total Revenues 3 85 EBITDA 26 46 EBITDA 7 2 www.sasflightacademy.com Profit before taxes 2 www.jetpak.com Profit before taxes 5 67 67 68 68
Rezidor SAS Hospitality expanding with new brands Market position Large potential of chain brands in Europa Three new brands added: 2 2 6 6 5 3 8 4 2 9 3 2 Number of hotels 5 4 25 2 5 5 '94 '95 '96 '97 '98 '99 ' ' '2 Q 23 Franchised Managed Leased Owned 2 2 2 69 69 7 7 Recent events for Rezidor SAS Hospitality New loyalty program introduced - Goldpoints 4 new Park Inn hotel launched in Sweden and one in Berlin New hotels opened in Tashkent and Cologne Cologne Tashkent Berlin REZIDOR SAS Hospitality REVPAR under pressure but still better than industry 5% % 5% % -5% -% -5% -2% -25% - jul sep - nov 2- jan mar may jul sep nov jan SIH REVPAR - Rezidor REVPAR - Market 7 7 72 72
REZIDOR SAS Hospitality negatively affected by weaker markets and high energy costs in Norway in MSEK Jan-Mar 23 Jan-Mar 22 Change Revenues 842 746 +2,9% Operating result -75-6 -23% Financials Adjusted EBITDA -76-58 -3% Pre tax profit -5-85 -59% Including gains 73 73 74 74 Clear Targets to Reduce Indebtedness - Long-term Targets established Surplus values despite reduced aircraft prices and weaker USD to SEK Key figures Today Target Equity/assets ratio (solidity) 2% >3% Financial net debt/ equity 54% <5% Fin. net debt+npv Oplease/ equity 24% <% Fin. net debt+7* Oplease/ equity 33% <% Targets will be reached by: Turnaround measures Relesase of main assets: Aircraft Properties Non-core subsidiaries MSEK 6 5 4 3 2 992 993 994 995 Surplus value, aircraft 996 997 998 999 2 2 Q 22 Q2 22 Q3 22 Q4 22 Q 23 75 75 76 76
34% 29% 24% % 9% 4% 9% 4% -% Gearing level peaking Consolidation ahead Leverage Ratios dec-98 dec-99 dec- dec- Dec-2 mar-3 Net Debt / Equity Fin Net Debt / Equity Fin. Net Debt + 7*Op lease / Equity Leverage to peak during 23 Clear targets to reduce Leverage Commited Credit Facilities of MSEK 8 35 MSEK Liquid Funds 3/3-3 8 535 Available Credit Facilites: Revolving Credit Facility (MUSD 7) 3 55 Aircraft Finance Lease Facility 2 6 Bi-lateral Facilities 5 Others 5 Total Available Facilities 8 35 Total Available Funds 6 885 77 77 78 78 Reduced CAPEX will improve free cash flow going forward MSEK January March 23 22 Cash flow from operations - 95-428 Change in working capital -584-8 Net financing from operations - 679-68 Investments, advance payments - 964-95 Acquisition/sale of subsidiaries (net) -9 +35 Sales of fixed assets, etc. +32 + 22 Financing deficit/surplus -2 36-22 Changes in external financing, net +73-272 79 79 MSEK SAS Group entering CAPEX holiday as from 23 SAS Group CAPEX 995-26 (Aircraft and expected other investments) 3 9 7 5 3-995 996 997 998 999 2 2 22 23e 24e 25e 26e 8 8
High financial maneuverability Liquidity of MSEK 8 534 Committed credit facilities MSEK 8 35 Slightly less than half of the A/C fleet is Unencumbered No Rating Triggers No onerous Financial Covenants Interest coverage ratio low in historic terms 6 5 4 3 Additional sources of capital Aircraft Real estates Non-core businesses 2 993 994 995 996 997 998 999 2 2 22 Q, 23 Interest coverage ratio 8 8 82 82 Weak traffic figures in Scandinavia Q Group passenger load factor down by 2,3 p.u. Scandinavian Airlines load factor down by 2, p.u Summary & Outlook 23 Passenger- Seat capacity Cabintraffic (RPK) (ASK) factor SAS Group Total -4,2% -,4% 58,7% Intercontinental +2,9% +2,5% Europe -5,7% -,8% Domestic and -,2% -,% Intrascandinavian 83 83 84 84
Some recovery on traffic to US and Europe in April Group passenger load factor down by 5,6 p.u. Scandinavian Airlines load factor down by 9,2 p.u Group traffic in Europe up by 8,% Passenger- Seat capacity Cabintraffic (RPK) (ASK) factor SAS Group Total -5,6% -3,% 6,5% Intercontinental -2,6% +25,% Europe +8,% +9,4% Domestic and -7,9% -2,4% Intrascandinavian Sum up Worst quarter in history Severe pressure on revenues Significant pressure on revenues due to Weak economies Iraq/SARS Most forceful measures ever implemented in Scandinavian Airlines unit cost to come down 3% Sufficiently strong balance sheet and liquidity position to manage the current situation in the industry Good financial manoeuvrability to implement & carry through turnaround 85 85 86 86 The Board of Directors Thank you for your attention! Assessment for full year 23: Continued weak economies Uncertainty remains regarding other external factors Some recovery on U.S and European routes in April Plan B implementtion ahead of plan Plan C SEK 8 billion rapid implementation Additional MSEK in Subsidiary & Affiliated Airlines This presentation can be downloaded at the SAS Group s homepage www.sasgroup.net 87 87 88 88
APPENDICES Traffic Data Yield Unit cost Fleet Financial key figures Traffic and Yield January-March 23 vs 22 Scandinavian Airline Index Total Scheduled 23 22 variance Production (mill ASK) 8 4 8 288 97 Traffic (mill RPK) 4 9 5 229 94 Cabin factor (%) 6.9 63. -2. Yield (öre/rpk) 34.5 5.5 89 Currency adj. yield 34.5 47.4 9 89 89 9 9 Traffic and Yield January-March 23 vs 22 Index Braathens (Total scheduled) 23 22 variance Production (mill ASK) 42 23 2 Traffic (mill RPK) 6 526 4 Cabin factor (%) 52.7 5.4 +.3 Yield 88 Traffic and Yield January-March 23 vs 22 Index Spanair (Total scheduled) 23 22 variance Production (mill ASK) 549 556 99 Traffic (mill RPK) 852 922 92 Cabin factor (%) 55. 59.3-4.3 Yield *) 7 *) local currency *) local currency 9 9 92 92
Traffic and Yield January-March 23 vs 22 Traffic and Yield January-March 23 vs 22 Index Spanair (Charter) 23 22 variance Production (mill ASK) 29 97 6 Traffic (mill RPK) 879 873 Cabin factor (%) 85.4 9. -4.6 Index Wideroe 23 22 variance Production (mill ASK) 233 9 22 Traffic (mill RPK) 4 92 25 Cabin factor (%) 49. 48.2 +. Yield *) 82 *) local currency *) local currency 93 93 94 94 Traffic and Yield January-March 23 vs 22 Index Air Botnia 23 22 variance Production (mill ASK) 26 55 33 Traffic (mill RPK) 84 67 26 Cabin factor (%) 4. 43.3-2.3 Yield 76 *) local currency Yield Development Q 22 Q 23 (currency adjusted) 2% % -2% -4% -6% -8% -% -2% st Quarter 22 2nd Quarter 22 3rd Quarter 22 4thQuarter 22 st Quarter 23 Yields are under pressure from negative class mix /route mix, lower comissions and intercont effect 95 95 96 96
Passenger Yield January-March 23 vs 22 Nominal Currency Adjusted Route Sector yield effect yield Scandinavian Airline 89 98 9 Intercontinental 87 8 94 Europe 94 2 95 Intrascandinavian 96 96 Denmark* 32 33 Norway 8 97 5 Sweden 98 98 *) Incl Greenland 22 Unit Cost January - March 23 vs 22 MSEK Adjusted Share of JAN-DEC 2 JAN-MAR 3 Var. % total var % Personnel 558 848 8,6% 3,6% Fuel 69 755 2,9%,7% Gov. charges 88 796-2,7% -,3% Selling costs 92 855-28,3% -4,2% Ground Services 39 68 -,5% -,9% Technical 36 247 9,8%,4% Other oper. 885 922 4,2%,5% TOTAL OPER NET COS 7 528 7 59,8%,8% Aircraft costs 445 49,4%,6% ADJUSTED EBIT 7 972 8 82,4%,4% Volume = average decrease in ASK: -3.% 97 97 98 98 Unit Cost (adjusted) January - March 23 vs 22 MSEK Volume and curr. adjusted Share of JAN-DEC 2 JAN-MAR 3 Var. % total var % Personnel 624 763 8,5%,7% Fuel 69 755 2,9%,7% Gov. charges 88 796-2,7% -,3% Selling costs 92 855-28,3% -4,2% Ground Services 39 68 -,5% -,9% Technical 36 247 9,8%,4% Other oper. 948 922-2,7% -,3% TOTAL OPER NET COST 7 657 7 56-2,% -,9% Aircraft costs 445 49,4%,6% ADJUSTED EBIT 8 7 997 -,3% -,3% Volume = average decrease in ASK: -3.% Key airline profitability drivers January-March 23 vs 22 Traffic growth (RPK) down 6.3 % Cabin Factor down 3. p.u. Yields down 8.8 % Unit costs up.4 % * *) Adjusted for method change = down,3% 99 99
Passenger Revenue Analysis January-March 23 vs 22 Passenger load factor long term trend positive 995-23 69% Moving 2 months values Revenues 6 588 MSEK - 6.3 % Volume - 6.3 % Yields - 8.8 % Currency -.8 % 68% 67% 66% 65% 64% 63% DEC94 DEC95 DEC96 DEC97 DEC98 DEC99 DEC DEC DEC2 2 2 Weaker USD offset by increased yield pressure Currency Effects SAS Group January-March 23 vs 22 2 9 8 7 6 Positive effect on operation costsq by 45 MSEK Weak USD => increased yield pressure 23 22 2 2 MSEK JAN-MAR Total revenues -89 Total costs +546 Forward cover costs & working cap. +5 Income before depr. +47 Financial items +75 Income before tax +582 3 3 4 4
Currency Effects SAS Group January-March 23 vs 22 Total revenues & costs: (Total +357 MSEK) Major approx. effects: USD +45 DKK +6 NOK +38 EUR -2 Asian curr. -5 All others -5 Forward cover costs: (Total -39 MSEK) 22 +39 23 Working capital: (Total +89 MSEK) 22-9 23 - Financial items: (Total +75 MSEK) 22 +28 23 +33 Grand total +582 MSEK NOK 33% Currency distribution in the SAS Group 22 Revenues SEK 22% GBP 4% USD % Others 4% DKK % EUR 7% SEK 2% NOK 26% Expenses GBP 2% USD 22% EUR 4% Others % DKK 5% 5 5 6 6 Financial key figures and aircraft fleet data Balance Sheet MSEK 3MAR3 3DEC2 Liquid funds 8 534 72 Other interest-bearing assets 7 92 7 487 Aircraft 27 53 27 256 Other assets 2 88 2 346 Total assets 65 54 66 8 Operating liabilities 7 846 8 68 Interest-bearing liabilities 29 448 28 867 Subordinated debenture loan 95 95 Deferred tax 3 57 3 66 Minority interests 76 66 Equity 3 362 5 88 Total liabilities and equity 65 54 66 8 Financial net debt 2 554 7 872 7 7 8 8
SAS Group Equity / Assets Ratio 922-33 SAS Group Financial Net Debt/Equity Ratio 922-33 5% 45% 4% 35% 3% 25% 2% 5% % 5% % 992 993 994 995 996 997 998 999 2 2 22 Including parent company from January, 2. Including Braathens from December, 2 and Spanair from March, 22. 2,5 2,3 2,,8,5,3,,8,5,3, 992 993 994 995 996 997 998 999 2 2 22 Including parent company from January, 2. Including Braathens from December, 2 and Spanair from March, 22. 9 9 MSEK SAS Group Development of financial net debt 922-33 25 2 5 5 Average 93 MSEK 5.9 Average 94 MSEK 9.7 Average 95 MSEK 4.95 Average 96 MSEK 2.35 Average 97 MSEK 2.5 Average 98 MSEK 2.9 Average 99 MSEK 6.75 Average Average Average 2 Average Q 3 MSEK 5.45 MSEK 9.5 MSEK 7.95 MSEK 9.5 92-2 93-2 94-2 95-2 96-2 97-2 98-2 99-2 -2-2 2-2 Including parents company from January,2 Including Braathens from December, 2 and Spanair from March, 22. Summary pension schemes SAS Group follow IAS accounting Extremely low return on stock market has put pressure on SAS pension plans as well In spite of situation still surplus funds MSEK 2 SAS plans relatively robust if assumptions should change No need for write down at current levels No effects on cash flow No effects on net debt as pensions are excluded 2 2
SAS Group fleet as of Mar 3, 23 SAS Group Owned Leased Total Leased On SAS Group Owned Leased Total Leased On (Incl SK, BU, JK, KF, WF) Mar3 In Mar3 Out Order (Incl SK, BU, JK, KF, WF) Mar3 In Mar3 Out Order Airbus A34-3 5 2 7 SAS 4 8 95 9 9 Spanair 5 5 Airbus A33-3 2 3 Braathens 4 23 27 Airbus A32-2 8 4 2 4 Wideroe 6 3 29 Airbus A32 8 8 Air Botnia Boeing 767-3 3 6 9 Total 34 77 3 9 9 Boeing 737-4 4 4 Boeing 737-5 4 4 Boeing 737-6 2 8 3 SAS Group Average Age Average Age Average Age Boeing 737-7 8 7 5 (Incl SK, BU, JK, KF, WF) Owned Leased In Total Boeing 737-8 4 5 9 4 4 SAS 6,92 8,4 7,4 Boeing 77 4 4 Spanair,2,2 Braathens,5 9,25 8,4 Douglas MD-8 5 5 Wideroe 9,3 7,4 8,6 Douglas MD-82 7 26 43 Air Botnia 3,8 3,8 Douglas MD-83 2 22 24 Total 7, 8,45 7,83 Douglas MD-87 6 6 Douglas MD-9-3 8 8 Avro RJ-85 5 5 Embraer ERJ 45 3 3 Fokker F28 7 7 2 Fokker F5 7 7 2 dehavilland Q 6 7 dehavilland Q3 8 8 dehavilland Q4 8 28 SAAB 2 5 5 Total 34 77 3 9 9 Limited CAPEX SAS Group Firm Order CAPEX MUSD 4 Firm Aircraft Orders Total 23 24 25 26 as per 3/3-3 Airbus A33 Airbus A32 2 Airbus A32 4 3 Boeing 737 4 2 Tot No. of A/C 2 3 5 CAPEX (MUSD) 42 72 5 46 33 3 4 3 4 Limited CAPEX SK Firm Order CAPEX MUSD 34 SAS financial position adequate Firm Aircraft Orders Total 23 24 25 26 as per 3/3-3 Airbus A33 Airbus A32 4 3 Boeing 737 4 2 Tot No. of A/C 9 2 5 5% 4% 3% % 2% % % Equity / Total Assets Equity MSEK 3 438 Equity ratio 2% Financial net debt MSEK 2 554 Fin net debt/ equity 53% dec-98 dec-99 dec- dec- Dec-2 mar-3 CAPEX (MUSD) 342 42 2 46 33 5 6 5 6
SAS Group Financial Net January March 23 SAS Group - Development and Break Down of Financial Net Debt 333 (MSEK) 3-3-3 2-3-3 Difference Interest net and others -254-68 -86 Exchange rate differences +33 +28 +75 Financial net +49-4 +89 (in % p.a. of average financial net debt) +,% -,% +2, p.u. (MSEK) 333 223 Difference Cash 8 534 72-2 87 Other interest bearing assets 265 89 +76 Interest bearing liabilities -3 353-29 782-57 Financial Net debt -2 554-7 872-2 682 Net debt -3 97-78 -2 29 7 7 8 8 SAS Group - Development and Break Down of Financial Net Debt 333 (MSEK) 333 233 Difference Cash 8 534 9 88-654 Other interest bearing assets 265 558-293 SAS share Price development Interest bearing liabilities -3 353-28 248-2 5 Financial Net debt -2 554-7 52-3 52 Net debt -3 97-574 -2 343 9 9 2 2
Development of Market capitalization SAS share price vs. Peers 22-23 2 8 6 4 2 8 6 4 2 jul- apr- jan- okt-99 jul-99 apr-99 jan-99 okt- jul- apr- jan- okt- jan-3 okt-2 jul-2 apr-2 jan-2 3 2 9 8 7 6 5 SAS Market Capitalization vs. European Peers* measured in SEK (December28, 2 - March 3 23) Index Peers Index SAS 4 3- dec- 3- jan- 2 28- feb- 2 3- mar- 2 3- apr- 2 3- maj- 2 3- jun- 2 3- jul- 2 3- aug- 2 3- sep- 2 3- okt- 2 3- nov- 2 3- dec- 2 3- jan- 3 28- feb- 3 3- mar- 3 53,6 5,3 * Peers: Alitalia, Air France, British Airways, Finnair, KLM, Lufthansa &Rynair 2 22 2 22 Volume in SAS in Stockholm Weak volume in industry downturn SAS AB Average daily number of shares traded in Stockholm per month Number of shares traded in SAS per month 6 3 25 22 vs 2 23 vs 22 4 2 22 vs 2 23 vs 22 2 5 8 5 January February March April May June July August September October November December January February March 6 4 2 March April June July August September October November December January February March 23 24 445L 23 445L 24