SAS : Presentation - English

Q4 2019/2020

December 3, 2020

Highlights Q4-20

Financial drivers

• • Recapitalization completed

• • Continued negative impact of COVID-19

• • Lead-time to reduce capacity resulted in lower load factors

• • Measures to reduce cost and preserve cash

• • Government support packages

• • Accelerated refund pace

Headwinds and tailwinds

+ Favorable fuel & FX trend

- Increased COVID-19 spread and reintroduced travel restrictions

- Low visibility into future bookings

Q4-20

SEK -3.3bnCHANGE VS. Q4-19

EBT

-4.4

Capacity

(ASK, total, mill. km)

3 923

-73%

Unit Revenue, PASK (SEK, currency adjusted)

0.48 -35%

Passenger yield (SEK, currency adjusted)

1.20

+26%

CASK ex. fuel (SEK, currency adjusted)

1.06 +100%

FY20 - a year like no other

How FY20 started…

…how FY20 endedFY20

CHANGE VS. FY19

12.6 -58%SEK 20.5bn -56%

23.4 -55%SEK -10.2bn -10.9

Focus areas during the fourth quarter

1 Number of COVID-19 cases increased across Europe during the quarter…

EU COVID-19 observed cases, 14-days cumulative cases per 100 000 inhabitants

Nordics

Europe North

Europe South

HR

1 000

900

800

700

600

500

400

300

200

100

0

01Aug

01Sep

01Oct

01Nov

01Aug

01Sep

01Oct

01Nov

01Aug

01Sep

01Oct

01Nov

Source: European Centre for Disease Prevention and Control; Updated 30NOV 2020

1 …and additional travel restrictions were implemented leading to lower demand

Share of SAS revenue per category (indicative)

Travel not allowed and/or quarantine requiredTravel not recommended and/or some restrictions in place

Open

Beginning of quarterEnd of quarterSAS' passenger development Thousand passengers, % of LY

% of LYPassengers

705

717

May

JunJulAugSepOct

Q3-20

Q4-20

1 SAS has reduced capacity, but lead times result in lower cabin factors

SAS' seat capacity development

• ▪ Low visibility into future bookings

  • - Most bookings are made very close to departure date

  • - Travel restrictions are introduced at short notice

• ▪ Lead time to reduce capacity

  • - Customer commitment

  • - Need to publish roster in advance

  • - Temporary-layoffs are applied for in advance

• ▪ As a result, lower load factors in Q4-20 compared to Q3-20

Q3-20

Q4-20

Reduce spend and manage liquidity

2 Managing liquidity while accelerating pace of refunds

Cash and cash equivalents Q4 FY20

SEKbn

Opening balance6.2

Operating activities

(excl. refunds)RefundsInvesting activitiesFinancing activities

• ▪ Increased pace of refunds in the quarter

• ▪ As per 31OCT, 1.5mn customers (SEK 3.9bn) have been settled either with cash or a voucher

• ▪ Since 31OCT, an additional 0.4mn customers (SEK 1.1bn) have been settled

Closing balance10.2

7.2

• ▪ Cash flow from operating activities (excl. refunds) within the range provided in the second quarter (MSEK 500-700 per month)

Deliver on SEK 4bn transformation program

3 Progress made on adapting cost structure to lower demand

SAS' business plan

Activities completed until Q4

% of activities completedRedundancies

100%

• ▪ Finalized 5 000 redundancies

Adapting fleet

• ▪ Delayed 10 aircraft deliveries

  100%

• ▪ Accelerated phase-out of B737NG

Supplier negotiations

• ▪ Ongoing dialogue with major suppliers

  100%

• ▪ Further reduced cost with wet lease partners

Productivity improvements

• ▪ Realized improvements within SAS' control

  100%

• ▪ New CBAs with SAIL and tech. dept. CPH

• ▪ Ongoing dialogue in remaining areas

Secure financing

4 Status recapitalization and ongoing financing activities

Final outcome from recapitalizationTop shareholders post recapitalizationOngoing financing activitiesSale of aircraft

• ▪ MUSD 29 from sale of 3 x 737NG for cargo conversion

• ▪ Assessing up to 5 additional 737NG sales

  Credit facilities

• ▪ Plan to utilize Norwegian NOK 1.5bn term loan

• ▪ Potential to create additional headroom on existing credit facilities

  Aircraft financing

• ▪ Extending existing aircraft loan facilities

• ▪ Additional aircraft and engine SLBs

FINANCIALS

Highlevel Summary - Q4 & Fiscal Year 2020

Note: 1) Sheduled. 2) Currency adjusted. 3) Excluding items affecting comparability, currency adjusted. 4) EBT before items affecting comparability

Revenue Development - Q4/20

MSEK

Estimated COVID-19 revenue impact MSEK -9,691

Q4 FY19

CurrencyCapacity changePassenger

C/FPassenger yield

Cargo revenue

Other traffic revenue

Other operating

Q4 FY20

EBT Development - Q4/20

MSEK

Q4 FY19

CurrencyCOVID-19 revenue impactCost reductionsIFRS16

Other

Items affecting comparability

Q4 FY20

Revenue Development - FY20

MSEK

Estimated COVID-19 revenue impact MSEK -25,913

FY19

CurrencyCapacity changePassenger

C/FPassenger yield

Cargo revenue

Other traffic revenue

Other operating

FY20

EBT Development - FY20

FY19

CurrencyCOVID-19 revenue impactCost reductionsIFRS16

OtherItems affecting comparability

FY20

Jet fuel and currency hedges

Jet fuel

• • Policy to hedge 40-80% of expected fuel consumption for the next 12 months and up to 50% for the following six months

• • Under the current uncertain and volatile market conditions SAS may come to deviate from the policy

• • For the next 12 months, SAS has 48% of the consumption hedged at an average max price of USD 546/Mt.

Currency

• • Policy to hedge 40-80% of expected currency deficit/surplus for the next 12 months

  - 43% of USD hedged next twelve months - 45% of NOK hedged next twelve months

of expected fuel consumtion hedged next 12 months

of expected USD cash flow deficit hedged next 12 monthsof expected NOK cash flow surplus hedged next 12 months

Exchange rate USD/SEK

3.0 3.2

3.3 3.5

3.6 3.8

4.0 4.2

Sensitivity analysis, jet fuel cost Nov 2020-Oct 2021, SEKbn

Market price

8.0

8.5

9.0

9.5

10.0

Debt Maturity Profile and Aircraft Orders

Maturity profile, SEKbn

4.1

FY21

FY22

FY23

FY24

FY25 FY26 >FY26

New Hybrid notes

• • State Hybrid note 1, SEK 5 billion

• • State Hybrid note 2, SEK 1 billion

• • Commercial Hybrid note, SEK 1.6 billion

Development in Cash & Cash Equivalents

Cash Q4-19

Cash flow from operationsCash flow from financing

Borrowings and repaymentsRecapitalization

Other

Cash Q4-20

Financial Targets

Summary and key takeaways

Continued negative impact from COVID-19

Slowed down demand due to re-introduced travel restrictions

Strict cost and cash control as well as good transformational progress

Recapitalization finalized

Income Statement Q4

Income statement	Aug20-Oct20	Aug19-Oct19	Change vs LY	Currency
Total operating revenue	3,035	13,435	-10,400	-722
Personnel expenses	-1,674	-2,488	+804
Jet fuel	-771	-2,780	+2,009
Air traffic charges	-270	-1,179	+908
Other operating expenses	-1,421	-4,237	+2,816
Total operating expenses*	-4,136	-10,674	+6,538	+608
EBITDAR before items affecting comparability	-1,101	2,761	-3,862	-114
EBITDAR-margin	-36.27%	20.55%	-56.82 p.u.
Leasing costs, aircraft	16	-943	+958
Depreciation	-490	-502	+11
Depreciation, Right-of-use	-937	-	-937
Share of income in affiliated companies	2	1	1
EBIT before items affecting comparability	-2,510	1,318	-3,828	-29
EBIT-margin*	-82.7%	9.81%	-92.51 p.u.
Financial items	-207	-91	-116
Financial items, IFRS 16	-326	-326
EBT before items affecting comparability	-3,043	1,226	-4,270	-186
Items affecting comparability	-228	-130	-98
EBT	-3,271	1,096	-4,368	-186
* = Before items affecting comparability

Income Statement - 12 months

Income statement Nov19-Oct20 Nov18-Oct19 Change vs LYCurrency
Total operating revenue 20,513	46,112 -25,599 -1,008
Personnel expenses -7,645 Jet fuel -5,626 Air traffic charges -1,872 Other operating expenses -7,717	-9,775 +2,130 -9,672 +4,046 -4,194 +2,322 -15,912 +8,195
Total operating expenses* -22,860 EBITDAR before items affecting comparability -2,347	-39,552 6,560 +16,692 -8,907 +947 -61
EBITDAR-margin* -11.44% Leasing costs, aircraft -65 Depreciation -1,965 Depreciation, right-of-use -3,647 Share of income in affiliated companies 7	14.22% -25.66 p.u. -3,561 +3,496 -1,831 -134 - -3,647 -9 +16
EBIT before items affecting comparability -8,017	1,158 -9,176 -73
EBIT-margin* -39% Financial items -641 Financial items, IFRS 16 39	2.51% -41.51 p.u. -372 - -269 +39
EBT before items affecting comparability -8,619	786 -9,406 +664
Items affecting comparability -1,532	8 -1,540
EBT -10,151	794 -10,945 +664

* = Before items affecting comparability

Balance Sheet 31 October 2020

Balance sheet, MSEK	31 October 2020	30 October 2019	Change
Non-current assets
Intangible assets	1,273	1,416	-143
Tangible fixed assets	18,861	15,569	3,929
Right-of-use assets	17,264	-	17,264
Financial fixed assets	6,063	4,546	1,517
Deferred tax assets	1,640	750	890
Total non-current assets	45,101	22,281	22,820
Current assets
Inventories and expendable spare parts	510	346	164
Current receivables	1,591	2,622	-1,031
Cash and cash equivalents	10,231	8,763	-1,468
Total current assets	12,332	11,731	601
TOTAL ASSETS	57,433	34,012	23,421
Equity and liabilities
Equity	10,490	5,372	5,118
Non-current liabilities
Interest-bearing liabilities	11,219	9,450	1,769
Interest-bearing lease liabilities	13,499	-	13,499
Other liabilities	3,569	4,076	-507
Total non-current liabilities	28,287	13,526	14,761
Current liabilities
Interest-bearing liabilities	3,773	1,833	1,940
Interest-bearing lease liabilities	3,105	-	3,105
Other liabilities	11,778	13,281	-1,503
Total current liabilities	18,656	15,114	3,542
Total shareholders' equity and liabilities
57,433	34,012	23,421

Estimated COVID-19 effects - Q4/20

MSEK

-9.691 Revenue

FuelAir traffic chargesPersonnel Selling andcostdistributionHandling costsWet leaseTechnical maintenanceCatering

-4.641

Other effects

Total COVID-19 effects

Estimated COVID-19 effects - FY20

MSEK

-25.913 Revenue

FuelAir traffic chargesPersonnel Selling andcostdistributionHandling costsWet leaseTechnical maintenanceCateringOther effects

Total COVID-19 effects

Investor Relations

Most recent stock recommendations

Date

InstitutionRecommendation

-

2020-11-27 2020-11-12

Sydbank HSBC

Sell

BuyTP - - SEK 1.75

Recommendations

1

1

0

Buy

Hold

Sell

Analyst coverage

Institution

Analyst

DNB

Ole Martin Westgaard

HSBC Nordea

Andrew Lobbenberg and Achal Kumar Hans-Erik Jacobsen

Pareto Securities

Kenneth Sivertsen

Sparebank 1 Markets

Lars-Daniel Westby

Sydbank

Jacob Pedersen

For more information:

Web:https://www.sasgroup.net/investor-relations

Vice President Investor Relations:

Michel Fischier

[e-mail]

[phone]

@MichelTW1