Norwegian Air Shuttle ASA

Q1 2017 Presentation 27 April 2017

Highlights Q1 2017

Launched 39 new routes for spring/summer 2017, including new intercontinental routes with the MAX

Ranked the 31st most valuable airline brand in the world (up from 44th last year) by Brand Finance

This year’s UNICEF flight went to Mali in Africa, carrying 13 tons of emergency aid and school supplies

Added seven new Boeing 737-800’s and one 787-9 Dreamliner to operations

Leasing operation received one Airbus 320neo in March (to a total three aircraft)

4 % lower unit cost ex. fuel (+4 % incl. fuel)

A soft first quarter with EBITDA ex. other losses/gains negative by NOK 1.1 bn on higher fuel cost and lower unit revenue due to currency and impact of Easter

2

6.7 million passengers in Q1 (+14 %)

3

Pax (mill) 2.0 2.1 2.7 3.1 3.6 3.9 4.9 4.9 5.8 6.7

0

1

2

3

4

5

6

7

8

Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17

Pa

sse

ng

ers

(mill

ion

)

+ 14 %

Stable Q1 load factor of 84 % (85 %)

4ASK 2,183 2,674 3,507 4,498 5,266 6,378 9,421 10,056 11,803 14,649

Load Factor 77.2 % 74.8 % 75.1 % 74.3 % 77.2 % 76.1 % 77.3 % 83.0 % 85.2 % 84.4 %

77.2 %74.8 % 75.1 % 74.3 %

77.2 % 76.1 % 77.3 %

83.0 %85.2 % 84.4 %

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

18,000

Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17

Load

Fac

tor

Av

aila

ble

Se

at

KM

(A

SK

)

ASK Load FactorLoad

-0.8 p.p.

24 % growth in capacity (ASK)

23 % growth in traffic (RPK)

Average flying distance increased by 6 %

Continued growth in all key airports

5Source: 12 month rolling passengers as reported by Avinor, Swedavia, Copenhagen Airports, Finavia, Gatwick Airport, Aena

Strongest growth rate in US, Spain and France

6 % passenger growth in the Nordics

Growth in number of passengers in Q1 17 (y/y): Split passengers by origin in Q1 17:

Continued passenger growth in US and Spain

6

7

Q1 unit passenger revenue -17 % to 0.28 (-13 % in constant currency)

15 % growth in ancillary revenue (flat NOK 138 per passenger)

Other revenue driven by Reward, Cargo, external leasing and SLB gains

9 % revenue growth in Q1

Total revenue 2,904 3,551 4,034 4,961 5,406

Passenger 2,473 2,900 3,221 3,971 4,074

% y/y chg 24 % 17 % 11 % 23 % 3 %

Anci l lary 338 523 676 802 919

% y/y chg 13 % 55 % 29 % 19 % 15 %

Other 93 128 137 188 413

% y/y chg 52 % 38 % 7 % 37 % 120 %

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Q1 13 Q1 14 Q1 15 Q1 16 Q1 17

NO

K m

illio

n

+ 9 %

Growth driven by both new routes and frequency

8

Total ASK growth of 20 % the last 12 months

Balanced growth on increased frequency and new routes

44000

46000

48000

50000

52000

54000

56000

58000

60000

ASK Q11612 mthsrolling

New routes Closedroutes

Frequecychanges

New routes Frequencychanges

ASK Q11712 mthsrolling

Launched 12 new routes with the 737 MAX

9

Intercontinental routes for summer 2017

10

Adding nine 787-9 Dreamliners in 2017

11

2013 2014 2015 2016 2017 2018

Aircraft 3 7 8 12 21 32

Seats 873 2 037 2 328 3 704 6 800 10 584

Deliveries 787-8(291 seats)

Deliveries 787-9(344 seats)

Widebody aircraft (delivered and firm orders)

Q1

Q2

Q3

Q4

8 56 8 11 1320

22 2323 22

115 5

2

2 55 5

55 5

5

7 16 21

2325 29

2927 23 19 15 14

28

1013

13

13 17 2929 29

2

7 15 23

30 41 51

64

6971 71

6 1632

2

55

9

14

20

20

1

23

3

7

12

17

8

6 8 11 13

22

3240

46

5762

68

85

9599

116

144

163

191

0

20

40

60

80

100

120

140

160

180

200

2002year-end

2003year-end

2004year-end

2005year-end

2006year-end

2007year-end

2008year-end

2009year-end

2010year-end

2011year-end

2012year-end

2013year-end

2014year-end

2015year-end

2016year-end

2017year-end

2018year-end

2019year-end

A321LR owned

B787-8/B787-9 owned

B787-8/B787-9 leased

B737 MAX 8 owned

B737-800 owned

B737-800 S&LB

B737-800 leased

B737-300 owned

B737-300 leased

M80 leased

Adding 32 new aircraft in 2017

12

2017:Deliveries 787-9

+3,096 seats

Deliveries 737-800 and 737 MAX

+4,296 seats

Re-deliveries 737-800

-744 seats

Financials

13

Q1 14 Q1 15 Q1 16 Q1 17

EBT margin -1 % -8 % -1 % 2 %

-215

-1,592

-141

652

-2,000

-1,600

-1,200

-800

-400

0

400

800

NO

K m

illio

n

Q1 14 Q1 15 Q1 16 Q1 17

EBT margin -23 % -19 % -20 % -34 %

-813-776

-992

-1,848

-2,000

-1,750

-1,500

-1,250

-1,000

-750

-500

-250

0

NO

K m

illio

nQ1 impacted by higher fuel cost and lower RASK

14

EBT development Q1 12 mths rollingEBT development Q1

(NOK million) Q1 17 Q1 16 Chg

12 mths rolling

Q1 17

12 mths rolling

Q1 16 Chg

Revenue 5,406 4,961 446 26,500 23,417 3,083

EBITDAR (607) 63 (670) 5,289 3,688 1,600

EBITDA (1,338) (606) (732) 2,385 1,377 1,008

Pre-tax profit (EBT) (1,848) (992) (856) 652 (141) 793

Net profit (1,492) (800) (691) 444 (16) 459

Less impact of wetlease and hedging

15* Clean EBITDA: Reported EBITDA adj. for other losses/gains and non-recurring items

NOK million Q1 17 Q1 16 Chg

12 mths rolling

Q1 17

12 mths rolling

Q1 16 Chg

Revenue 5,406 4,961 446 26,500 23,417 3,083

EBITDA as reported -1,338 -606 -732 2,385 1,377 1,008

Other losses/gains -255 -528 273 849 -1,005 1,854

EBITDA ex. other losses/gains -1,083 -78 -1,004 1,536 2,382 -846

Non-recurring items:

- industry action -110

- net of gain SLB and writedown assets for sale 151 255 -52

- wetlease -69 -112 -486 -157

Sum non-recurring items 82 -112 -231 -319

Clean EBITDA -1,165 34 -1,199 1,767 2,701 -934

Margin clean EBITDA -21.5 % 0.7 % 6.7 % 11.5 %

EBITDA bridge Q1 2017 vs last year

16

* Ex. other losses/gains

-1600

-1400

-1200

-1000

-800

-600

-400

-200

0

EBITDA*Q1 16

Increasedfuel price

Yieldchange

Loadchange

Gain fromSLB Other

EBITDA*Q1 17

-78

-1,083

Passenger tax Norway

Q1 split of unit revenue and cost by currency

Currency split RASK: Currency split CASK:

17

Q1 unit cost ex. fuel decreased by 4 % to NOK 0.34

2 % lower unit cost ex. fuel in constant currency

Unit cost increased by 4 % to NOK 0.44 (6 % in constant currency)

18

Other losses / (gains) is not included in the CASK concept as it primarily contains hedge gains/losses offset under financial items* as well as other non-operational income and/or cost items such as gains on the sale of spare part inventory and unrealized foreign currency effects on receivables/payables and (hedges of operational expenses).*Norwegian hedges USD/NOK to counter foreign currency risk exposure on USD denominated borrowings translated to the prevailing currency rate at each balance sheet date. Hedge gains and losses are according to IFRS recognized under operating expenses (other losses/ (gains) while foreign currency gains and losses from translation of USD denominated borrowings are recognized under financial items.

Cost per ASK (CASK) NOK 0.62 0.56 0.51 0.50 0.50 0.47 0.45 0.45 0.43 0.44

CASK ex. fuel 0.46 0.45 0.40 0.37 0.36 0.33 0.32 0.35 0.35 0.34

0.46

0.45

0.400.37 0.36

0.33 0.320.35 0.35 0.34

0.16

0.11

0.15 0.12 0.15

0.13 0.14

0.10 0.07 0.10

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

0.55

Q1 08 Q1 09 Q1 10 Q1 11 Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17

Op

erat

ing

cost

EB

ITD

A le

vel p

er A

SK (C

ASK

)

CASK ex. fuel

Fuel share of CASK

Full impact of lower fuel cost

Higher Fuel cost (+43 % per ASK) driven by price (+53 %) offset by stronger NOK vs USD (3 %)

Higher Personnel cost (+2 % per ASK) due to ramp-up of intercontinental operations. 32 % increase in FTE’s

Lower Airport/ATC (-14 % per ASK), Handling (-3 % per ASK) and Sales and Distribution (-9 % per ASK) per ASK due to increased sector length and currency

Lower Leasing cost (-12 % per ASK) due to reduced use of wetlease and currency

Higher Technical expenses (+9 % per ASK) on more leased aircraft and price escalation on heavy maintenance

19

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

Q1 12 Q1 13 Q1 14 Q1 15 Q1 16 Q1 17

12 mths rolling 12 mths rolling 12 mths rolling 12 mths rolling 12 mths rolling 12 mths rolling

Personnel

Other

Technical

Airport/ATC

Leasing

Depreciation

Sales & Distribution

Handling

Fuel

NOK 1.4 bn cash-flow from operations in Q1

20

Strong liquidity with NOK 4.8 bn in cash at the end of Q1 (+NOK 0.3 bn in undrawn facility)

Cash-flow from operations of NOK 2.3 bn the last 12 months

Invested NOK 5 bn the last 12 months, of which NOK 4.3 bn is financed with external debt

NOK million Q1 17 Q1 16 Chg

12 mths rolling

Q1 17

12 mths rolling

Q1 16 Chg

Profit before tax -1,848 -992 -856 652 -140 792

Paid taxes 40 - 40 12 -44 56

Depreciation 364 288 76 1,372 1,201 170

Change air traffic settlement liabilities 3,888 2,954 934 1,586 1,506 80

Change working capital -1,045 -243 -802 -1,324 913 -2,237

Net cash flows from operating activities 1,399 2,007 -608 2,297 3,436 -1,139 -

Net cash flows from investing activities -194 -1,666 1,472 -5,040 -5,276 236

Net cash flows from financial activities 1,226 375 851 4,297 3,461 836

Net change in cash and cash equivalents 2,434 735 1,698 1,554 1,574 -20 -

Cash and cash equivalents, end of period 4,757 3,190 1,568 4,757 3,190 1,568

Financing on track

Expected capex (all aircraft incl. PDP)USD 1.3 bn for 2017 (reduced from USD 1.8 bn)

USD 2.1 bn for 2018 (unchanged)

PDP financing / liquidityPDP financing for 50 Airbus 320neo’s

Credit facility (NOK 1 bn)

New unsecured bond (SEK 1 bn)

Long-term financingExport credit guaranteed financing (Ex-Im and ECA)

AFIC – guaranteed by a syndicate

Sale leaseback (SLB)

Commercial banks

EETC financing

Private placements21

3,190

Cash4,757

3,180

Receivables3,893

2,283

Other assets2,727

5,274

Aircraft PDP 7,128

19,057

Aircraft22,452

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Q1 16 Q1 17

NO

K m

illi

on

Equity2,536 1,986

Pre-sold tickets8,554 6,969

Otherliabilities

4,932 4,931

PDP and bonds7,547

4,091

Aircraft financing

17,389

15,008

Q1 17 Q1 16

Net debt reduced by NOK 1 bn

22

Added eight new 737-800 and three 320neo’s on balance the last 12 months

NOK 20 bn net debt (reduced from 21 bn in Q4 2016)

6 % equity ratio (unchanged y/y). 10 % when adding market value of Bank Norwegian (NOFI)

Outlook for 2017

Markets and business

Negative impact from passenger tax in Norway and weaker demand in the UK

Negative revenue impact from currency and distance

Capacity adjusted booking volumes on par with last year, except some softness in May

An estimated production growth (ASK) of 30 % (unchanged)

737-800 / 737 MAX +20 %, 787-9 Dreamliners +60 %

Increasing distance driven by mix

Fuel hedging

52 % of 2017 at USD 494 and 12 % of 2018 at USD 500

Unit cost target of NOK 0.39 to 0.40 (unchanged)

Assumptions: Fuel price of USD 500 per metric ton, USD/NOK 8.25, EUR/NOK 9.00

Impact of NOK 90 million higher fuel cost in Q1

Including impact of additional SLB (leasing is included in CASK) and ramp-up of intercontinental operations

Based on the current route portfolio and planned production

32 new aircraft entering operations in 2017

17 Boeing 737-800, six 737 MAX and nine 787-9 Dreamliners (incl. five leased)

23

Going forward

Focus on global expansion and strong growth in staff, routes and aircraft

European launch customer of the 737 MAX 8

The new intercontinental routes with the MAX well received in the market

Startup of US-Spain with 787’s in Q2

Launched new routes from London to Seattle, Denver and Singapore

Strong liquidity and reduced capex for 2017

24

Norwegian operates 482 routes to 133 destinations

25

From bases in

SWEDEN

DENMARK

FINLAND

From the

UK base

From bases in

SPAIN

Intercontinental

From bases in

NORWAY