SAS 2001 Q1 Analystmaterial

SAS IR/STU 1 2001-05-11

SAS Group Analyst meeting

Stockholm, May 9, 2001

SAS IR/STU 2001-05-11 www.scandinavian.net2

SAS Group 1st Quarter – highlights The Marketplace Impact from weaker U.S. Economy SAS Strong January/ February – Good traffic growth – Stronger Business Class March weaker than expected Capacity adjustments announced April 9 Hotel business as planned Maintained outlook for Full Year 2001

SAS IR/STU 3 2001-05-11

Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail: [email protected] --- Homepage: www.scandinavian.net -- Results Jan -Mar 2001 SAS Group Events of note 1st Quarter Jörgen Lindegaard President & CEO as from May 8, 2001 SAS Cargo to be incorporated 2001 Proposal of single SAS share submitted to Parlaments

SAS IR/STU 4 2001-05-11

SAS new organization SAS Group will react swifter in the marketplace

Board of Directors

Strategic Focus Areas - CEO Corporate Development/M&A CEOCEO Customer Satisfaction Strategic Focus Areas - Communications Government & External Strategic Focus Area - HR Relations HR Communications HR Communications People Capabilities Communications

AirlineAirline Commercial Commercial AirlineAirline Operations Operations CFOCFO

Strategic Focus Area - Strategic Focus Area - Strategic Focus Areas - CFO Airline Operations Airline Commercial Shareholder Value/ Customer Relations Operational Investor Relations Excellence Group Brand & Image Finance & Capital Alliances & Partnerships Corporate Business Control Information Technology Capabilities

The new organization- SAS Group shorter lines of command

Board of Directors

CEOCEO

HRHR CommunicationsCommunications

Corporate 1) Corporate AirlineAirline Commercial Commercial AirlineAirline Operations Operations1) CFOCFO FunctionsFunctions

Scandinavian Scandinavian Scandinavian WorldWorld Ground Flight Cabin Scandinavian Non Airline SalesSales Services Operations Operations Technical Services Businesses Traffic Planning & Execution SAS Int'l Hotels SAS Flight Support Support Services WiderøeWiderøe SAS Flight Academy SASSAS CommuterCommuter Jetpak AirAir BotniaBotnia Scandinavian IT Group MarketingMarketing SAS Hosting NetworkNetwork RevenueRevenue OtherOther AffiliatedAffiliated && ProductProduct SMART ManagementManagement ManagementManagement AirlinesAirlines SAS Trading ManagementManagement SAS Media Aeroxchange SASSAS CargoCargo (1) Includes SAS Airline Accountable Manager Functions Airline business

597

2000 2001 2000 2001 Operating Revenues Cash flow

SAS IR/STU 7 2001-05-11

SAS Group EBITDARlevels up 101% 1st Quarter

in MSEK 12 months st Change 1 Quarter Change rolling

Operating revenues 12 137 +12,8% 48 921 +10,2%

EBITDAR 1 214 +101% 6 268 +45,7%

Gains on sales -37 n.m. 1 484 +40,5%

Pre tax profit 57 n.m. 1 612 +223% before aircraft disposals

SAS IR/STU 8 2001-05-11

SAS Group CFROI - passed hurdle rate of 20%

35% SAS Group's key financial 30% metric 25% Focus on operating cash flow 20% (EBITDAR)

15% CFROI 2001 20%

10% Hurdle rate through cycle 17-20% 5% Target will increase as 0% Capital employed now start 2 6 2 6 2 6 2 6 2 6 2 1 0 1 0 1 0 1 0 1 0 1 5 6 6 7 7 8 8 9 9 0 0 9 9 9 9 9 9 9 9 9 '0 '0 rising

CFROI Target

SAS IR/STU 9 2001-05-11

30%30%

25%25% Affected by strong USD 20%20% SAS market 15%15% based ROCE 2001 20% 10%10% Hurdle rate through

5%5% cycle >12%

0%0%

33 99 33 99 33 99 33 99 33 99 00 00 00 00 00 00 00 00 00 00 66 66 77 77 88 88 99 99 00 00 99 99 99 99 99 99 99 99 00 00

ROCE,ROCE, MarketMarket basedbased HurdleHurdle raterate ROCEROCE

SAS IR/STU 10 2001-05-11

SAS Group EBITDAR and EBITDAR margins 1995-2001

77 000000 18%18%

16%16% 66 000000 14%14% 55 000000 12%12%

44 000000 10%10%

8% EBITDAR 8% EBITDAR 33 000000 EBITDAR margin 6%6% EBITDAR margin 22 000000 4%4% 11 000000 2%2%

00 0%0% 19951995 1996 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 (12(12 m)m)

EBITDAREBITDAR EBITDAREBITDAR margin margin

SAS IR/STU 11 2001-05-11

SAS Group Proposed dividend 2000 approved by AGM’s Local currency Dividend Yield

SAS Danmark A/S 3,80 SAS Norge ASA 4,20 SAS Sverige AB 4,50

Average level (SEK) 4,50 4,7%

SAS IR/STU 12 2001-05-11

1st Quarter 2001 1st Quarter 2000

EPS 0,09 -1,40

Cash Earnings 0,91 -0,64

SAS IR/STU 13 2001-05-11

SAS Group Current equity structure is not optimal from a capital market point of view

Danish Private Norwegian Private Swedish Private state shareholders state shareholders state shareholders 50% 50% 50% 50% 50% 50%

SAS Danmark A/S SAS Norge ASA SAS Sverige AB

2 2 3 /7 /7 /7

SAS Group

Airline Business Non-airline Business

♦ Individual market capitalisation too low to attract strong investors’ interest

SAS Group A single share will enhance interface with the capital market

Danish Norwegian Private Swedish state state state shareholders 14% 14% 21% 50%

SAS AB

Airline Business Non airline Business

SAS’ operations will remain unchanged as an effect of the unification

Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail: [email protected] --- Homepage: www.scandinavian.net -- Results Jan -Mar 2001 SAS Group Transaction structure ♦ SAS AB makes public offers for New share structure SAS Danmark A/S, SAS Norge ASA No. of outs. Market and SAS Sverige AB in exchange shares (m) Par value1 for new shares in SAS AB value (bn) ♦ Exchange ratio is 1:1 SAS Danmark 47.0 DKK10 DKK4.1 ♦ SAS AB domiciled in Sweden A/S ♦ Listings on all Scandinavian stock SAS Norge 47.0 NOK10 NOK4.3 exchanges ASA SAS Sverige 70.5 SEK10 SEK7.2 ♦ Offer recommended by SAS Boards AB of Directors ♦ SAS AB 164.5 SEK10 SEK17.1 UBS Warburg and Morgan Stanley Note: Dean Witter have delivered fairness 1 Bloomberg as of 25 April 2001 opinions which confirm the conditions of the deal ♦ The exchange offers will i.a. be conditional on 90% acceptances

SAS IR/STU 16

SAS Group Historic volumes traded have been

low...One month weekly average volume traded — 1 January 1999 – to date 5,000

4,000

3,000

2,000

(000s shares) 1,000

0 Ja n-99 Ju n -99 No v-99 Apr-00 Sep-00 Feb-01 SAS Da n m a rk SAS No rg e SAS Sve rig e SAS Gro u p TheThe threethree holdingholding companycompany structurestructure hashas significantlysignificantly limited the liquidityliquidity inin thethe SASSAS sharesshares TheThe creationcreation ofof aa singlesingle SASSAS shareshare shouldshould enhanceenhance itsits relativerelative liquidityliquidity significantlysignificantly whichwhich willwill benefitbenefit allall shareholdersshareholders inin SASSAS asas itit willwill openopen forfor greatergreater interestinterest fromfrom institutionalinstitutional investorsinvestors

SAS IR/STU 17

SAS Group ...but share unification will increase weightings in in major indices

♦ SAS AB is expected to be included in the following indices — Affärsvärlden’s General Index (full market value) — OMX Stockholm Index (free float) — Copenhagen KFX Index (registered shares in Denmark) — Oslo General Index (registered shares in Norway) — MSCI (free float) — FTSE Europe ex-UK (free float) — STOXX (free float)

SAS IR/STU 18

600 8,000

500 6,000 400

300 4,000

200 2,000 100 Weekly turnover (US$m) turnover Weekly

0 0 Market capitalisation (US$m)

p e u KLM italia r Franc Al Lufthansa SAirGro Ai SAS Group

British Airways Average weekly turnover in US$m — 1 January 2001 – to date

SAS IR/STU 19

SAS Group SAS AB expected to be listed July 6, 2001 Key dates

Date Event 8 May Q1 results announced Offer to shareholders 21 May Prospectuses published to stock exchanges and on Internet [ ] June Danish parliament approval 22 June Norwegian parliament approval [ ] June Swedish parliament approval 29 May Acceptance periods commence 25 June Acceptance periods close 6 July New SAS share starts trading on Stockholm Stock Exchange, Copenhagen Stock Exchange and Oslo Stock Exchange

SAS IR/STU 20

Business Area SAS Airline

SAS IR/STU 21 2001-05-11

Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail: [email protected] --- Homepage: www.scandinavian.net -- Results Jan -Mar 2001 SAS Airline Sharp increase in passenger load factors - growth trend in Business Class RPK Business Class Passenger load factor 1998-2001 total system 1995-2001

Year on Year values Moving 12 months values

25% 68% 20%

15% 67%

10% 66% 5%

0% 65%

-5% 64% -10%

-15% 63% DEC94 JUN DEC95 JUN DEC96 JUN DEC97 JUN DEC98 JUN DEC99 JUN DEC00 JAN98 JUL JAN99 JUL JAN00 JUL JAN01

SAS IR/STU 22 2001-05-11

SAS Airline Key profitability drivers

Traffic growth (RPK) up 6% Business Class (RPK-C) up 9% Cabin factor up 1,3 p.u. Yields up 5,0% Unit costs down 3,3% EBITDAR up 101%

SAS IR/STU 23 2001-05-11

SAS Airline Passenger Revenue Analysis vs Last Year

Revenue 8 095 +14,8% Volume +6,5% Yield +5,0% Currency +3,2%

SAS IR/STU 24 2001-05-11

Yields up 5,0% overall

5% Up 4% on 4% IntercontinentalIntercontinental routesroutes 3% and European routes 2% 1% Up 11% on Norwegian 0% domestic -1% 1st Quarter 2000 1st Quarter 2001 Up 5% on Swedish Yield Currency adjusted domestic

SAS IR/STU 25 2001-05-11

SAS Airline Unit cost reductions in line with plan Index Last Year

0% Decrease of 3,2% -1% -1% ImprovedImproved productivityproductivity -2% Result improvement -2% -3% program completed -3% -4% 1st Quarter 2000 1st Quarter 2001

Unit cost

SAS IR/STU 26 2001-05-11

Unit cost development SAS Airline an historic review 1996-2001 Index Last Year

Large increases 1996- 5% 4% 1997 3% 2% Flat 1998 1% 0% ImprovementsImprovements 1999 1999 -1% -2% ImprovementsImprovements 20002000 -3% -4% (excl(excl fuelfuel costs)costs) 1996 1997 1998 1999 2000 1st Q 2001 Continued down 1st Unit cost Quarter 2001

SAS IR/STU 27 2001-05-11

Targets – Down 2-3% 2001 – Down 10% accumulated over 2-3 years

Affected by – Continous improvements – Distribution / cost of sales – Fleet structure

SAS IR/STU 28 2001-05-11

Improved passenger load SAS Airline factor and increased EBITDAR EBITDAR 5,4 million passengers (+3.3%) in MSEK +101% 1 214

+3.7%

ASK 597 RPK +5.9% RPK

2000 2001 2000 2001

SAS IR/STU 29 2001-05-11

SAS Airline Result Improvement Program 1999/00 MSEK 2450 achieved as of 4th quarter 2000 Residual implemented in Business Plans 2001

Area Achived effect vs. 1998 Cargo 90 MSEK Catering & In-flight service 300 MSEK IT & communications 200 MSEK Distribution & Electronic channels 635 MSEK Air crew 445 MSEK Ground handling 270 MSEK Technical maintenance 235 MSEK Overhead & other 275 MSEK Total 2450 MSEK

SAS IR/STU 30 2001-05-11

Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail: [email protected] --- Homepage: www.scandinavian.net -- Results Jan -Mar 2001 SAS Airline Intercontinental routes - strong in Business Class Washington D.C added as from May 2001 Strong growth in Economy Class for most Asian destinations Weaker development in Economy Class on North First A 340340---300300 in service Atlantic – impact from as from August 2001 weaker U.S. Economy

SAS IR/STU 31 2001-05-11

Product news Intercontinental flights

Three classes – Economy Extra added IndividualIndividual entertainmententertainment system system forfor allall seatsseats –– Films, Films, audio,audio, gamesgames etc.etc. Well beeing concept introduced –– Food, Food, drinks,drinks, physicalphysical activity,activity, work/ sleep comfort In-flightIn-flight buffetbuffet serviceservice – Greater flexibility in choice – Sandwiches, fruits, expresso machine

SAS IR/STU 32 2001-05-11

SAS Airline European routes - continued well 1999- April 2001 Business Class/ Economy Class Traffic up 6,5% 130 Balanced growth

120 Economy Class/ Business Class 110

100

Growth vs LY Index LY vs Growth 90 Routes to Germany,

80 Russia, Belgium, Finland

N R Y L P V N R Y L P V N R A A A U E O A A A U E O A A stronger J M M J S N J M M J S N J M Month Economy Class Business Class

SAS IR/STU 33 2001-05-11

Passenger load factor 80 Continued capacity reductionsreductions 70 Passenger load factor improvedimproved year year onon yearyear 60 Passenger load factor IntroductoryIntroductory problemsproblems 50 deHavilland Q400 JUL JUL JAN JAN JAN SEP SEP NOV NOV MAY MAY MAR MAR MAR Month Danish domestic

SAS IR/STU 34 2001-05-11

Norwegian domestic routes – SAS Airline positive signs noted 1999 – April 2001 Total market up 1% Passenger load factor Total market up 1% 70 SAS Traffic up 4,1% Negative mix 60 Strong yield

50 SAS Gain market shares

Passenger SAS Gain market shares load factor – Up from 42% to 43% 40 JUL JUL JAN JAN JAN SEP SEP NOV NOV MAY MAY MAR MAR MAR Month Norwegian domestic

SAS IR/STU 35 2001-05-11

Airline operations Swedish domestic routes slightly weaker Total market up 4% SAS traffic up 6% Positive mix Stronger yield

Boeing 737737---800800 introduced 08MAY

SAS IR/STU 36 2001-05-11

Cargo contribution 2001 (2000) -13% MSEK 170 (MSEK 195)

January-March 2001

Revenue ton-kmdown 1,7% Revenue up 1,7%

SAS IR/STU 37 2001-05-11

Product and market news Travel Air Pass launched – 38 countries and 206 cities Eurobonus wind Freddie Award for 5th consecutive year New and improved service on domestic flights – Fully automated boarding routines New customer friendly check in machines New mobile check-in machines – Brings the check in to the customer

New tableware with Scandinavian design SAS IR/STU 38 2001-05-11

Airline operations SAS partnerships MSEK 1000 in synergies 2000

SAS IR/STU 39 2001-05-11

Products: Travel Pass - 19%19% Products: Travel Pass - Travel Pass Corporate 17%17% (TPC),(TPC), E-TIX,E-TIX, InternetInternet 15%15% 13%13% Total volume E-channels 11%11% MSEK 1 400 9%9% 7%7% 17% of total passenger sales vs 9% Last Year 5%5% sales vs 9% Last Year jan-jan- feb-feb- mar-mar- apr-apr- maj-maj- jun-jun- jul-jul- aug-aug- sep-sep- okt-okt- nov-nov- dec-dec- jan-jan- feb-feb- mar-mar- 0000 0000 0000 0000 0000 0000 0000 0000 0000 0000 0000 0000 0101 0101 0101 % sold Target: more than 20% by end 2001

SAS IR/STU 40 2001-05-11

Non airline businesses SAS with new Nordic online marketplace for travel - online during summer 2001

SAS IR/STU 41 2001-05-11

SIH

Business Area SAS International Hotels

SAS IR/STU 42 2001-05-11

Revenues 791 696 13,6%

Operating result 33 47 -30%

Pre tax profit -3 9 n.m.

SAS IR/STU 43 2001-05-11

SIH Radisson SAS Hotels adjusted EBITDA up 28% 1st Quarter 2001 450 400 5 000 350 4 500 300 250 MSEK T EUR 4 000 200 150 3 500 100 3 000 50 1st Quarter 2000 1st Quarter 2001 0 1994 1995 1996 1997 1998 1999 2000 EBITDA - adjusted

EBITDA - adjusted

SAS IR/STU 44 2001-05-11

SIH Continuously improved REVPAR

650 Second key gauge for 600 operating hotels 550 SEK REVPAR continuously 500 improvedimproved sincesince 19961996 450 REVPAR SEK 612 400 1995 1996 1997 1998 1999 1st 1st Quarter Quarter (Q1-01)(Q1-01) vsvs SEK SEK 578578 2000 2001 REVPAR (Q1-00)(Q1-00)

SAS IR/STU 45 2001-05-11

Hilton’s acquisition of Scandic equals EV/EBITDA multiple of 11x based on 2000/2001E ImpliedImplied equityequity valuevalue SIH – MSEK 5 500- 5 700

SAS IR/STU 46 2001-05-11

SIH SAS International Hotels forecast for 2001

Growth strategy – In exsisting home markets – Extended market – Capital cities – Leisure & resorts – Airport hotels – Multiple brands Improved REVPAR levels EBITDA growth of 20%

SAS IR/STU 47 2001-05-11

Airline operations

Non-airline businesses and affiliates

SAS IR/STU 48 2001-05-11

Business area Operations Sales EBT Sales outside (MSEK) (MSEK) SAS, %

SAS Cargo Freight traffic 526 n.a. n.a.

SAS Trading Travel retail 509 -7 99

Scandinavian IT Group Travel related IT 605 29 3 (reservations etc) Widerøe’s Flyveselskap Norwegian regional air 513 19 traffic 99 Air Botnia Finnishregional air traffic 225 -3

SAS Flight Academy Flight training 154 20 28

SMART Electronic trading and 173 58 100 distribution of travel

SAS IR/STU 49 2001-05-11

Airline operations

SMART Norhern Europe’s leading provider of electronic traveltravel servicesservices Amadeus is main partner

Ownership structure: 95% SAS 5% Amadeus

Total Revenues MSEK 584 Pre Tax Profit MSEK 37

www.smart.se

SAS IR/STU 50 2001-05-11

Airline operations

SAS Flight Academy One of the World’s leadingleading trainingtraining centers for pilots and other personell 38% of revenues outside SAS

Total Revenues MSEK 606 Pre Tax Profit MSEK 92 www.www.sasfasasfasasfa....comcom

SAS IR/STU 51 2001-05-11

Scandinavian IT Group

One of Scandinavia's largest IT companies, with a turnover of about 1900 million DKK and a total of more than 1200 employees in three countries

Total Revenues MSEK 2121 Pre Tax Profit MSEK 61

Scandinavian IT Group www.www.scandinavianscandinavianIT...com.com Customer driven - Airline focused - Technology based

SAS IR/STU 52 2001-05-11

Airline operations British Midland transaction completed

SAS sold 20% to Lufthansa Sales proceed 91,3 MGBP

Joint Ventures with Lufthansa

SAS IR/STU 53 2001-05-11

Airline operations Spanair an important complement to SAS traffic system Second largest scheduledscheduled carriercarrier in in Spain 14% of Madrid Barajas slotsslots 5 million passengers a year 125 ESP Billion in revenuesrevenues www.spanairwww.spanair.es.es www.spanair.es Ownership structure: – 51% Teinver – 49% SAS

SAS IR/STU 54 2001-05-11

Widerøe’s flyveselskap

Norway’s largest regionalregional airlineairline FullyFully consolidatedconsolidated inin SASSAS 20002000

FullFull YearYear 2000:2000: TotalTotal RevenuesRevenues MSEKMSEK 11 851851 PrePre Tax Tax ProfitProfit MSEKMSEK 5656

www.www.wideroewideroewideroe.no.no

SAS IR/STU 55 2001-05-11

Outlook 2001

SAS IR/STU 56 2001-05-11

SAS Airline April figures – capacity adjustments but no change in growth plan Continued positive passenger mix Business Class +4,8% - Economy Class +4,3%

PassengerPassenger-- Seat capacity CabinCabin- - traffic (RPK) (ASK) factor SAS Total +4,4% +8,3% --2,4 2,4 p.u. Intercontinental --1,9% 1,9% --0,8% 0,8% Europe +11,5% +15,6% Domestic and +3,9% +8,8% Intrascandinavian

SAS IR/STU 57 2001-05-11

Key figure 2001 ASK Up approx 6% Frequencies Up 1-2% RPK Up approx. 6-7% Passenger yield (currency adjusted) Up 2-3% Unit costs Down 3%

SAS IR/STU 58 2001-05-11

SAS Group The Board of Directors Assessment for full year 2001: Weaker economies in main markets Increased uncertainty in traffic development SAS Capacity adjustments announced Fair balance between supply an demand in main markets Lower unit costs Forecast as from February 13, 2001 remains unchanged

SAS IR/STU 59 2001-05-11

SAS IR/STU 60 2001-05-11

Scandinavian Airlines System, Investor Relations Tel. +46 (0) 8 797 1451 Fax: +46 (0) 8 85 58 76 e-mail: [email protected] --- Homepage: www.scandinavian.net -- Results Jan -Mar 2001