SAS Group Year-End Report November 2012 - October 2013

STOCKHOLM—(BUSINESS WIRE)—

August – October 2013

· Revenue: MSEK 11,059 (11,412)

· Scandinavian Airlines traffic: up 4.0%

· Scandinavian Airlines passenger revenue adjusted for currency: down 0.3%

· Income before tax and nonrecurring items: MSEK 546 (809)

· EBIT margin: 6.4% (-2.3%)

· Income before tax: MSEK 442 (-561)

· Net income for the period: MSEK 353 (-574)

· Earnings per share: SEK 1.07 (-1.74)

· Cash flow from operating activities: MSEK 510 (1,418)

· The Board proposes that no dividend be paid for the 2012/2013 fiscal year.

November 2012 – October 2013

· Revenue: MSEK 42,182 (42,419)

· Scandinavian Airlines traffic: up 3.8%

· Scandinavian Airlines passenger revenue adjusted for currency: down 3.4%

· Income before tax and nonrecurring items: MSEK 775 (21)

· EBIT margin: 3.3% (-1.6%)

· Income before tax: MSEK 433 (-3,255)

· Net income for the period: MSEK 179 (-3,010)

· Earnings per share: SEK 0.54 (-9.15)

· Cash flow from operating activities: MSEK 1,028 (1,717)

“SAS (STO:SAS) (OSE:SASNOK) reports a positive EBT for the fourth quarter and accumulated for the full year. This was despite intensified competition and weak economic growth in the fourth quarter. As a result of the vigorous measures implemented under the change program, the weaker income trend could be partially offset by lower costs. For the full year, the EBIT margin was 3.3%.

The results are evidence that our established strategy has started to improve our competitiveness. We have increased productivity and the unit cost, excluding jet fuel, fell 5.9% during the year. We have made substantial progress in strengthening our financial position and divested assets with a total value of about SEK 2.8 billion during the year.

Our current focus is on completing the change program to obtain a more flexible cost structure, in parallel with our continued aggressive investment in our offering to the target group – frequent flyers – through measures including the renewal of both the short and long-haul fleets as well as the launch of 43 new routes in 2014,” says Rickard Gustafson, SAS President and CEO.

The weaker conditions are expected to continue and, as usual, due to seasonality, the first quarter of 2013/2014 (November-January), will be extremely weak. Provided that market conditions, in terms of capacity, jet fuel and exchange rates, do not decline any further and that no unexpected events occur, a positive EBT is expected, excluding the positive effect from the amendments to pension terms, in the 2013/2014 fiscal year. This positive effect from the amended pension terms will impact the results for the first quarter. SAS now expects, as an additional consequence of the weaker conditions, that the financial targets expected to be reached in 2014/2015 will not now be reached until 2015/2016.