1. travel
2. transports
3. air travel
4. airlines

Full Year Results
Analyst and Investor
Presentation
Tuesday 18 November 2014
Introduction
Carolyn McCall
Chief Executive Officer
Continued execution of the strategy
Strong revenue performance
RPS1
CPS2
1.9%
2.0%
Resilient operational performance
2013
1.9%
1.0%
0.7%
0.6%
0.0%
FY'14
Overall
satisfaction
H2'14
Profit per seat growth
12.8%
£6
£4
11.2%
8.2%
7.2%
£8.12
20.5%
12%
8%
£4.81
On-time
performance
14%
10%
£7.03
Satisfaction with
punctuality
Top quartile ROCE
6%
17.4%
PBT margin
PBT / seat
£8
2014
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
9.8%
11.3%
6.9%
Footer box on intersect of lines line h=8.03
4%9 and v=8.75 with font 10pt Arial not bold
£3.97
£2
2%
£0
0%
2011
2012
1.
2.
2013
2014
At constant currency
Cost per seat excluding fuel at constant currency
2010
2011
2012
2013
2014
3
Financial review
Chris Kennedy
Chief Financial Officer
4
Profit before tax increased
Profit per seat bridge
1.20
0.20
Driven by impact of
longer average sector
length
0.37
8.12
FX
FY 2014
1.02
0.10
0.44
0.16
0.04
De-icing
Disruption
7.03
FY 2013
Revenue
Fuel
Costs
easyJet
lean
A320 Mix
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
5
Financial results
£m (reported)
FY 2014
FY 2013
Change
Change
Total revenue
4,527
4,258
269
6.3%
Fuel
(1,251)
(1,182)
(69)
(5.8%)
Operating costs excluding fuel
(2,453)
(2,365)
(88)
(3.7%)
823
711
112
15.8%
Ownership costs
(242)
(233)
(9)
(4.2%)
Profit before tax
581
478
103
21.5%
EBITDAR margin
18.2%
16.7%
1.5ppt
Profit before tax margin
12.8%
11.2%
1.6ppt
FY 2014
FY 2013
Change
Change
EBITDAR
£ per passenger (constant currency)
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
Total revenue per passenger
Total cost per passenger (excluding fuel)
70.40
70.08
0.32
0.5%
(42.40)
(42.75)
0.35
0.8%
6
Financial results: 114.5p EPS, 20.5% ROCE
£m
FY 2014
FY 2013
Change
Profit before tax
581
478
21.5%
Tax charge
(131)
(80)
(63.8%)
Profit after tax
450
398
13.1%
Effective tax rate
22.5%
16.7%
(5.8ppt)
Earnings per share
114.5p
101.3p
13.0%
Ordinary dividend per share
45.4p
33.5p
35.5%
-
44.1p
20.5%
17.4%
Special dividend per share
Return on capital employed*
3.1ppt
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
* Return on capital employed (ROCE) measure includes leases capitalised at 7 times
The ROCE measure with target liquidity included is shown in the appendix
7
Fleet expenditure broadly in line with current levels
2005-2012
Additional aircraft
Replacement aircraft
Maintenance
Total
Total expected fleet
acquisition and
overhaul expenditure
as a % of easyJet
revenue
2013-14
2015-2017
2018-2022
49%
52%
66%
26%
42%
28%
9%
45%
9%
20%
25%
30%
100%
100%
100%
100%
18%
9%
11%
10% - 12%
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
Fleet acquisition and overhauls will be funded through a combination of easyJet’s
internal resources, cashflow, sale and leaseback transactions and debt
8
H2 margins improved due to tight cost control
Reported £m
H2 2014
H2 2013
Change
Total revenue
2,825
2,657
6.3%
Fuel
(714)
(686)
(4.0%)
(1,352)
(1,323)
(2.3%)
EBITDAR
759
648
17.3%
Ownership costs
(125)
(109)
(16.0%)
Profit before tax
634
539
17.5%
22.4%
20.3%
2.1ppt
40.5
38.0
6.3%
H2 2014
H2 2013
Change
71.15
69.82
1.9%
Fuel
(18.01)
(18.04)
0.2%
Operating costs
(34.78)
(34.76)
(0.1%)
17.02
7.9%
Operating costs
PBT margin
Seats (m)
Constant currency £ per seat
Total revenue
EBITDAR
18.36
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial
not bold
Ownership costs
(3.10)
(2.85)
(8.8%)
Profit before tax
15.26
14.17
7.7%
9
Continuing revenue per seat growth
£m
FY 2014
FY 2013
Change
Passengers (m)
64.8
60.8
6.6%
Load factor (%)
90.6%
89.3%
1.3ppt
Seats (m)
71.5
68.0
5.1%
Average sector length (km)
1,112
1,091
1.9%
Total revenue (£m)
4,527
4,258
6.3%
Total revenue per seat (£)
63.31
62.58
1.2%
At constant currency (£)
63.78
62.58
1.9%
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
10
easyJet strategy delivers further revenue growth
Year on year drivers of revenue per seat change (£/seat)
0.54
0.46
63.31
0.65
• Business passenger
• Allocated seating
62.58
• Disciplined capital allocation
• Revenue Management System
initiatives
• Longer sector length
• Increased load factor
• Digital
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
FY 2013
Underlying trading
Initiatives
FX
FY 2014
11
Growth in RPS
FY 2014
FY 2013
Change
At constant
currency
Gross seat revenue
69.65
68.66
1.4%
2.2%
Passenger taxes
(7.25)
(7.02)
(3.2%)
(4.4)%
Net seat revenue
62.40
61.64
1.2%
2.0%
Non-seat revenue
0.91
0.94
(2.5%)
(1.6%)
Total revenue
63.31
62.58
1.2%
1.9%
£ per seat
RPS growth at constant currency
Continued
strength
easyJet capacity growth
6.8%
5.8%
Easter in Q3 for 2014
5.1%
4.1%
3.0%
2.7%
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
1.5%
1.4%
Q1
1.4%
Q2
Q3
Q4
1.9%
FY
12
Favourable currency impact
Currency split – total costs
Currency split – total revenue
Sterling
Euro
Euro
26%
33%34%
42%
35%
47% Sterling
1%
1%
3% 8%
35%25%
USD
Other Swiss Franc
FY 2014 currency impact favourable / (adverse)
5% Swiss Franc
Other
EUR
CHF
USD
Other Total
(4)
(3)
(3)
(33)
(1)
-
1
£m
Revenue
Fuel
(23)
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 2
10pt Arial not-bold
Costs excluding fuel
40
5
5
-
50
Total
19
1
1
(3)
18
Average effective euro rate for revenue for FY 2014 was €1.21 (FY 2013: €1.19)
Average effective euro rate for costs for FY 2014 was €1.22 (FY 2013: €1.19)
13
Progressive weakening of the euro
GBP: euro rates (spot)
1.3
1.28
1.26
FY 2013
Impact of €/£ rate on P &L
£m
H1
Revenue
17
Fuel
(1)
Costs excluding fuel
(6)
Total
10
FY 2014
1.24
1.22
1.2
H2
(40)
3
46
9
1.18
1.16
P&L impact shown after
effects of hedging cashflows
1.14
Key booking
period
1.12
Peak
expenditure
1.1
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
•
box on intersect
lines line
h=8.03
9 and v=8.75
with fontduring
10pt Arial FY
not bold
ProgressiveFooter
weakening
ofofthe
euro
versus
sterling
2014
•
High level of forward bookings posted at around 1.20, cost incurred at better rate
14
Impact of fuel
FY 2014
FY 2013
Change B/(W)
Market rate
973
992
19
Effective price
977
980
3
Market rate
1.66
1.55
11 cents
Effective price
1.59
1.58
1 cent
Actual cost of fuel £ per metric tonne
614
619
5
Fuel $ per metric tonne
US dollar rate
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
Cost per metric tonne was broadly flat
15
Cost per seat excluding fuel - key drivers
Cost per seat
excluding
Favourable/(adverse)
fuel
£
Variance at
constant
currency
£
Variance at
constant
currency
%
Airports and ground
Handling
15.48
0.03
0.2%
Crew
6.70
(0.12)
(1.8%)
Navigation
4.30
(0.11)
(2.4%)
Maintenance
2.97
0.09
2.9%
Overheads
4.70
(0.11)
(2.3%)
Brand licence
0.16
(0.00)
(1.2%)
Drivers
• Lean initiatives savings
• Decrease in de-icing costs following milder
winter weather conditions
• Regulated airport charges
• Cost impact of higher load factor
• Pay increase broadly in line with inflation
• Longer average sector lengths
• Partially offset by lean initiative savings
• Longer average sector lengths
• Inflationary increases
• One-off benefit of new engine deal
• Increase in leased aircraft
• Increase in average fleet age
• Higher employee performance-related pay
• Continued IT and digital platform
development
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
Ownership
3.39
(0.02)
(0.5%)
Total CPS excluding fuel
37.70
(0.24)
(0.6%)
• Annualised lease costs
• Offset by ‘other financing’
NB: Foreign exchange gains and losses incurred in the prior year are included in calculating the year-on-year movement in “cost per seat excluding fuel
16
Management actions taken to control costs
Cost per seat bridge
External factors
0.15
Management action
0.20
0.54
0.84
Including:
Airports and ground handling – £0.26
Fuel and maintenance initiatives – £0.09
0.33
5 5 .5 5
5 5 .5 3
0.44
0.10
0.11
5 5 .19
Other
FY 2014
0.09
0.19
0.19
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
FY 2013 Regulated Inflation
airports
Fuel
De-icing
and
disruption
FX
Before
easyJet
management lean
action
A320 Mix
Engine
deal
Load
factor
Wet
leasing
17
Increasing proportion of A320s
FY 2014
FY 2013
Change
A319 (operating lease)
54
54
-
A319 (owned / finance lease)
99
99
-
A319 Total
153
153
-
A320 (operating lease)
18
18
-
A320 (owned / finance lease)
55
46
9
A320 Total
73
64
9
Total fleet
226
217
9
Unencumbered
94
82
12
Operating lease
32%
33%
(1ppt)
Percentage of A320s in fleet
32%
29%
3ppt
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
18
Flexibility in fleet planning
Maximum, minimum and base case fleet size under the framework agreement
Contracted Max
Base Case
Contracted Min
316
317
304
304
330
327
311
311
197
200
FY21
FY22
296
281
259
241
226
261
250
226
204
FY14
FY15
FY16
FY17
FY18
FY19
214
FY20
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
Flexible fleet arrangements to respond appropriately to market conditions
1. At the end of the relevant financial year
2. Based on fleet plan – base case
3. Maximum fleet does not include purchase rights
19
Strong balance sheet
£m
FY 2014
FY 2013
2,542
2,280
Goodwill and other intangible assets
478
467
Other assets
477
428
(1,747)
(1,716)
1,750
1,459
563
679
Cash and money market deposits
(985)
(1,237)
Net cash
(422)
(558)
Shareholders' equity
2,172
2,017
Capital employed
1,750
1,459
17%
7%
Property, plant and equipment
Liabilities (excluding debt)
Debt
Gearing
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
*Gearing defined as (debt + 7 x annual lease payments – cash) divided by (shareholders’ equity + debt +7 x annual lease payments – cash)
20
Cashflow
£m
Self funding ordinary dividend and capex
69
118
66
133
581
445
175
1,237*
112
76
Sep 2013
Operating Depreciation
Net of lines
Tax, line
net h=8.03
Ordinary
Capital
Borrowings
Footer box on intersect
9 and v=8.75
with font Special
10pt Arial not
bold
profit
and
working
interest
dividend expenditure dividend
amortisation capital
and other
* Includes money market deposits but excludes restricted cash
Other
13
985*
FX
Sep 2014
21
Fuel and foreign exchange hedging
Fuel requirement
US dollar
requirement
Euro surplus
Six months ending
31 March 2015
91% at $958 /
metric tonne
91% at $1.60/£
84% at €1.19/£
Full year ending
30 September 2015
80% at $944 /
metric tonne
85% at $1.59/£
77% at €1.18/£
Full year ending
30 September 2016
58% at $921 /
metric tonne
55% at $1.64/£
52% at €1.21/£
Sensitivities
• $10 per tonne change in fuel price will impact the full year pre-tax result by +/- $3.5 million
• One cent movement in the £/$ will impact the full year pre-tax result by +/- £1.3 million
• One cent movement in the £/€ will impact the full year pre-tax result by +/- £1.1 million
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
As at 14 November 2014
22
Progress against financial policies and metrics
Objectives
Capital
discipline
Progress
• High asset efficiency
• Maintain high level of fleet flexibility
• Fleet size flexibility of
between 204 and 316
aircraft by 2019
• 226 aircraft with 11 hours
asset utilisation
• Ensure robust capital structure
• Retain ability to invest in profitable
growth opportunities
• Gearing: 15% to 30%
• Moving to 80:20 ratio
on owned vs. leased
aircraft
• Gearing: 17%
• 32% leased
• Maintain sufficient liquidity to
manage through industry shocks
• £4 million cash per
aircraft
• £4.4 million cash per
aircraft
• Maintain industry leading returns
• Top quartile ROCE
• ROCE of 20.5%
+
Capital
structure
Metric
+
Liquidity
=
Returns
+
Dividend
policy
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
• Target consistent and continuous
payments
• Return excess capital to shareholders
• 40% ordinary dividend
payout ratio
Gearing defined as net debt (adjusted by adding seven times aircraft dry leasing payments for the year)
dividend by the sum of shareholders’ equity and adjusted net debt
• Ordinary dividend
payment increased by
11.9 pence or 35.5% to
45.4 pence per share
23
Business review
Carolyn McCall
Chief Executive Officer
Industry-leading business model to drive returns
easyJet will continue
to deliver:
A. Future profitable
growth
B. Industry leading
return on capital
employed and
margins through
revenue and cost
initiatives
C. Cash returns for
shareholders
Growth and returns
Strategic drivers
Leading business model
•
Flexible seat growth
between c.5% and
c.8% per annum
2. Maintain cost
advantage
•
Maintain top quartile
ROCE
3. Drive demand,
conversion and
yields across
Europe
•
Ordinary dividend
increased to 40% of
after tax profits
4. Disciplined use of
capital
•
Surplus cash to be
returned to
shareholders
1.
Build strong #1
and #2 network
positions
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
Proven strategy, execution and returns
25
Strong position built over time
Growing market share
Sustaining unit cost performance
2011 market share
4.9%
47%
2014 market share
42%
5.0%
52%
49%
4.0%
41%
40%
36%
25%
3.0%
32%
29%
4.5%
3.3%
26%
21%
2.0%
2.4%
1.0%
0.0%
Gatwick
No1
Edinburgh
No1
Nice
No1
Malpensa
No1
Geneva
No1
easyJet
Basel
No1
Ryanair
Norwegian
Vueling*
Sector-length adjusted CASK incl-fuel (CAGR Sep 2011-2014)
easyJet
80%
70%
60%
50%
40%
30%
20%
10%
0%
Ryanair
Vueling
Financial strength
Norwegian
25%
easyJet
20%
15%
ROCE
Feeling positive about the airline
Strong brand affinity
IAG**
Ryanair
10%
Lufthansa
Group
5%
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
0%
-5%
-5%
Source: Millward Brown Brand Tracker. Data
not available for Norwegian in Switzerland,
France, Germany and Italy and Vueling in the
UK and Switzerland
AF-KLM
Norwegian
Air Berlin*
15%
35%
55%
Gearing
75%
95%
*Vueling CASK CAGR is over the period Dec-10 to Dec-13
*Air Berlin as at 30 June 2014
**IAG Balance Sheet at Sep not available, therefore Average capital employed at June used in ROCE
calculation & Gearing position is at 30 June 2014
115%
26
Increasing capacity environment
Capacity growth
H2’14 vs. H2’13
Norwegian Other
Capacity growth
H1’15 vs. H1’14
CityJet
Transavia
easyJet
Germanwings
Winter 13/14
Winter 14/15
7.3%
Ryanair
Vueling
BA
5.9%
5.0%
3.7%
2.2%
3.5%
Flybe slots
1.5%
0.6%
0.6%
Capacity on easyJet city pairs
Capacity change total short
haul market
easyJet city to city pairs
Short-haul market
easyJet capacity change
Capacity on easyJet city pairs
easyJet city to city pairs
Source: Market share data from OAG scheduled data, as at 30 October 2014, easyJet markets based on internal easyJet definition.
27
Disciplined investment over Winter
Overall c.
3.5% capacity growth over Winter (before disruption)
easyJet
Market growth
United Kingdom
+2.7%
easyJet growth in the market
Netherlands +13.3 %
5.5%
2.7%
France
+4.1 %
10.3%
13.3%
Germany +15.1 %
15.1%
4.1%
2.9%
Spain -2.2 %
5.8%
-2.2%
Portugal
+0.0%
5.9%
Switzerland +6.0%
4.0%
6.0%
Italy +5.2 %
13.9%
5.4%
5.2%
0.0%
Source : OAG, scheduled data and Internal easyJet projection November 2014. Country capacity growth is based on network touching seats.
28
Continuing to execute in 2015
#1 and #2 network
positions
Opening Amsterdam
and Porto in 2015
31 new routes
launched this year1
Opportunity to deepen
existing traffic flows in
core markets and
develop new routes
Maintain cost
advantage
easyJet lean pipeline of
initiatives to deliver £30
million to £40 million
savings per year
Fleet up-gauging with
20 A320s to be
delivered in the year
Engineering &
Maintenance re-tender
Airport deals – structure
of contracts
Continuing to drive
Innovation
Drive demand,
conversion and yields
New brand campaign
Personalisation and
data mining
Product
enhancements
• Passport scanning
app
Disciplined use of
capital
Ordinary dividend
payout ratio from one
third to 40% of profit
after tax
Industry leading
margins will deliver
strong future cash
flows
Continue to develop
• Business
passenger
opportunity
• Dynamic packaging
• Loyalty
Culture & people
Continued investment in
talent development
Principles of easyJet lean and return
on capital embedded throughout the
organisation
1. 2015 routes launched as at 18 November 2014
Continued investment in our
systems and digital platform
29
Opportunities across the network
This slide contains a selection of new routes
1.
Network
30
1.
Network
Strong position in London
Uniquely positioned
Compelling network
Number of routes
120
108
100
80
60
48
40
25
12
20
0
Gatwick
Luton
Stansted
Southend
“Serious consideration” by consumers
London
70%
66%
65%
Catchment size
(millions)
Market share
Gatwick
12
49%
Luton
11
44%
Stansted
10
15%
Southend
7
88%
Heathrow
14
N/A
63%
60%
55%
50%
2013
2014
Source: Millward Brown. Brand scores for ‘Serious consideration’
31
1.
Network
Successful execution in Italy
Focus on higher yielding airports
Opportunity
1. Build on strong market share in
major catchment areas
MXP
2. Focus on business passengers
and those with higher
disposable incomes
BGY
VRN
VCE
TRS
LIN
BLQ
TRN
GOA
3. Keep on building the brand and
differentiating the product
FLR
AOI
PSA
PSR
FCO
“Serious consideration” by consumers
BRI
CIA
BDS
OLB
2013
70%
NAP
AHO
2014
67%
SUF
65%
60%
63%
CAG
CRV
PMO
60%
REG
TPS
55%
55%
CTA
50%
Milan
Rome
Source: Millward Brown. Brand scores for ‘Serious consideration’
32
2.
Cost
Advantage
Maintaining the cost advantage
Capacity deployed on easyJet network(1)
easyJet lean
easyJet
Legacy carrier
Low cost carrier
Charter
CASK ex fuel, Airport; ground handling, navigation and en-route charges( p)
6.0
Covers the
total cost
base
Governance
and
milestones
Long and
short term
savings
Embedded
throughout
easyJet
culture
4.0
5.60
4.60
2.0
0.0
3.11 2.94
0
250
2.14 1.98
1.65
0.99
Seats
500 (m)
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
easyJet lean will deliver £30 million - £40 million in sustainable savings
per annum over the next 5 years
(1)
(2)
(3)
OAG full year 2014 – easyJet airport pairs capacity
IAG CASK includes Vueling, capacity excludes Vueling
CASK data for LTM to 31 December 2013
CASK graph:
- Source: Airline Analyst
- Data based on 12 month period ending 31 March 2014
- CASK converted using opening period fx rates
33
2.
Cost
Advantage
Pipeline of initiatives
easyJet lean initiatives will continue to deliver
2015
2016
2017
2018
2019
Engineering & Maintenance
Airport deals
Engine selection
Up-gauging
Benchmarking
process
Engineering &
Maintenance
Fleet up-gauging
and fuel savings
Savings across
the cost base
• Costs benchmarked
• Airport deals
against key
competitors
• Ground Handling deals
• Revealed a further
pipeline of saving
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold • Asset utilisation
initiatives
34
Continuing to drive demand & conversion
3.
Demand
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
35
Continuing to drive demand & conversion
3.
Demand
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
36
3.
Demand
Loyalty
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
37
4.
Capital
Discipline
Capital allocation continues to drive returns
Improved returns year on year
CPBH FY13
£769 million
returned to shareholders
Returns
CPBH FY14
Special dividend (m)
Ordinary dividend (m)
£175m
Routes
Top quartile ROCE
£150m
20.5%
17.4%
9.8%
£46m
2010
2011
£85m
2012
£133m
2013
£180m
2014
11.3%
6.9%
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
2010
2011
2012
2013
2014
ROCE for route performance and improved returns analysis defined as normalised profit after tax divided by average net debt plus
average shareholders’ equity
38
FY’15
Outlook
H1 forward bookings
H1 bookings slightly ahead of prior year
% seats sold *
89.1%
90.9%
Winter 13/14
Winter 14/15
48.6% 49.2%
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
Oct
Nov
Dec
H1 (October 2014 to March 20114) as at 12 November 2014
Jan
Feb
Mar
H1
39
Outlook
FY’15
Outlook
Capacity (seats flown)
•
H1 c.+3.5% (before disruption)
•
FY c.+5% (before disruption)
Revenue per seat (constant currency)
•
H1: flat to very slightly up on the prior year
Cost per seat ex fuel (constant currency)
•
H1 c.+2.5% (assuming normal disruption levels and constant load factors)
•
FY c.+2% (assuming normal disruption levels and constant load factors)
FX
•
H1: c.£5 million favourable movement from foreign exchange rates
•
FY: c.£20 million adverse movement from foreign exchange rates
Fuel
•
H1: unit fuel costs £12 million to £22 million favourable
•
FY: unit fuel costs £22 million to £70 million favourable
easyJet is successfully
executing
itsh=8.03
strategy
of with
offering
its not
customers
low fares to great
Footer box on intersect
of lines line
9 and v=8.75
font 10pt Arial
bold
destinations with friendly service so that it will continue to win in a more competitive
market. This means easyJet is well placed to continue to deliver sustainable returns and
growth for shareholders.
Rates at 15 November 2014 £/USD: 1.5633; £/EUR: 1.2540
Unit fuel guidance based on Jet fuel trading range of $800 / metric tonne to $1,000 / metric tonne
40
Industry-leading business model to drive returns
easyJet will continue
to deliver:
A. Future profitable
growth
B. Industry leading
return on capital
employed and
margins through
revenue and cost
initiatives
C. Cash returns for
shareholders
Growth and returns
Strategic drivers
Leading business model
•
Flexible seat growth
between c.5% and
c.8% per annum
2. Maintain cost
advantage
•
Maintain top quartile
ROCE
3. Drive demand,
conversion and
yields across
Europe
•
Ordinary dividend
increased to 40% of
after tax profits
4. Disciplined use of
capital
•
Surplus cash to be
returned to
shareholders
1.
Build strong #1
and #2 network
positions
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
Proven strategy, execution and returns
41
Q&A
42
APPENDIX
43
H2 margins improved due to tight cost control
Reported £ per seat
H2 2014
H2 2013
Change
Total revenue
69.85
69.82
-
Fuel
(17.64)
(18.04)
2.2%
Operating costs
(33.44)
(34.76)
3.8%
EBITDAR
18.77
17.02
10.3%
Ownership costs
(3.11)
(2.85)
(9.1%)
Pre-tax profit
15.66
14.17
10.5%
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
44
ROCE Calculation – including 7x lease adjustment
Reported £m
FY 2014
FY 2013
Earnings before interest and tax – reported
581
497
Interest element of operating lease payments
41
34
Earnings before interest and tax – adjusted
622
531
Tax
21%
23%
Normalised operating profit after tax (NOPAT)
492
409
Average shareholders’ equity – reported
2,095
1,906
Average net cash – reported
(490)
(242)
Average capitalised leases
791
690
Average capital employed
2,396
2,354
Return on capital employed – 7x basis
20.5%
17.4%
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
45
ROCE Calculation – NPV and target liquidity
Proforma £m
FY 2014
FY 2013
Earnings before interest and tax – reported
581
497
Interest element of operating lease payments
25
31
Earnings before interest and tax – adjusted
606
528
Tax
21%
23%
Normalised operating profit after tax (NOPAT)
479
407
2,095
1,906
(25)
(27)
Average shareholder’s equity – adjusted
2,070
1,879
Average net cash – reported
(490)
(242)
Increase in debt associated with capitalising leases
392
356
Target liquidity adjustment
886
862
Average net debt – adjusted
788
976
Average capital employed
2,858
2,855
Return on capital employed – NPV basis
16.8%
14.3%
Average shareholders’ equity – reported
Adjustment to shareholders’ equity
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
46
RASK and CASK
FY 2014
FY 2013
Change
Total revenue per seat (£)
63.31
62.58
1.2%
At constant currency (£)
63.78
62.58
1.9%
RASK at constant currency (pence)
5.73
5.74
-
Total cost per seat excluding fuel (£)
37.70
38.17
1.2%
At constant currency (£)
38.41
38.17
(0.6%)
CASK excluding fuel at constant currency (pence)
3.45
3.51
1.3%
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
47
Aircraft cashflows including overhauls
FY 2015
FY 2014
20
9
Cashflows (USD) $m
FY 2015
FY 2014
Final delivery payments
555
246
Pre delivery payments
110
290
Heavy maintenance - owned fleet
122
38
Total
787
574
Heavy maintenance - leased fleet
114
121
Total cash flows
901
695
£564m
£419m
Aircraft
Number of aircraft deliveries
Total cash flows (GBP)
Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold
Figures based on contracted fleet commitments
48
Disclaimer
Certain statements in this presentation constitute or may constitute forward-looking statements. Any statement in this presentation that
is not a statement of historical fact including, without limitation, those regarding the Company’s future expectations, operations,
financial performance, financial condition and business is or may be a forward-looking statement. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ materially from those projected or implied in any forwardlooking statement. These risks and uncertainties include, among other factors, changing economic, financial, business or other market
conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this
presentation. As a result, you are cautioned not to place any reliance on such forward-looking statements. The forward-looking
statements reflect knowledge and information available at the date of this presentation and the Company undertakes no obligation to
update its view of such risks and uncertainties or to update the forward-looking statements contained herein. Nothing in this
presentation should be construed as a profit forecast or profit estimate and no statement in this presentation should be interpreted to
mean that the future earnings per share of the Company for current or future financial years will necessarily match or exceed the
historical or published earnings per share of the Company.
This communication is directed only at (i) persons having professional experience in matters relating to investments who fall within the
definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001;
or (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in
Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001. Persons within the United Kingdom who
receive this communication (other than those falling within (i) and (ii) above) should not rely on or act upon the contents of this
communication. Nothing in this presentation is intended to constitute an invitation or inducement to engage in investment activity for
the purposes of the prohibition on financial promotion contained in the Financial Services and Markets Act 2000.
This presentation has been furnished to you solely for information and may not be reproduced, redistributed or passed on to any other
person, nor may it be published in whole or in part, for any other purpose.
This presentation does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation
of any offer to buy or subscribe for, any securities of easyJet plc (“easyJet”) in any jurisdiction nor should it or any part of it form the
basis of, or be relied on in connection with, any contract or commitment whatsoever. This presentation does not constitute a
recommendation regarding the securities of easyJet. Without limitation to the foregoing, these materials do not constitute an offer of
securities for sale in the United States. Securities may not be offered or sold into the United States absent registration under the US
Securities Act of 1933 or an exemption there from.
easyJet has not verified any of the information set out in this presentation. Without prejudice to the foregoing, neither easyJet nor its
associates nor any officer, director, employee or representative of any of them accepts any liability whatsoever for any loss however
arising, directly or indirectly,
any
reliance
on this
or its contents.
Footer from
box on
intersect
of lines
linepresentation
h=8.03 9 and v=8.75
with font 10pt Arial not bold
This presentation is not being issued, and is not for distribution in, the United States (with certain limited exceptions in accordance with
the US Securities Act of 1933) or in any jurisdiction where such distribution is unlawful and is not for distribution to publications with a
general circulation in the United States.
By attending or reading this presentation you agree to be bound by the foregoing limitations.
49