Slide 1: Full Year Results
Full Year Results 17 November 2009 1
Slide 2: Introduction
Introduction Andy Harrison Chief Executive Officer 2
Slide 3: Europe’s best performing airline
Europe’s best performing airline 4 Results in line with expectations 4 Reduction in pre tax profit driven by: 4 Increase in unit fuel cost; £86.1m largely driven by movement in dollar 4 Reduction in interest income of £30.5m 4 Underlying margin improvement 4 Good revenue performance; +4.1% per seat
Slide 4: easyJet has strengthened
easyJet has strengthened 4 Share gains in valuable markets 4 easyJet passengers up 3.4%; compared to c.5% reduction in total European short haul seat capacity 4 Increased easyJet presence on the top 100 routes 4 Gaining market share in valuable markets 4 Focused investment in London Gatwick, Paris,
Slide 5: Finance review
Finance review Mark Adams Chief Financial Officer 5
Slide 6: Financial results
Financial results £m F’09 F’08 Change Total revenue 2,667 2,363 +12.9% Fuel (807) (709) +13.9% Operating costs excluding fuel* (1,635) (1,392) +17.5% EBITDAR* 225 262 -13.9% Finance and ownership* (181) (139) +31.0% Pre-tax profit (underlying) 44 123 -64.5% Margin* 1.6% 5.2% -3.6pp Fuel cost per sea
Slide 7: Net income, EPS, ROE
Net income, EPS, ROE £m F ‘09 F ‘08 Change Pre-tax profit (underlying) * 44 123 -64.5% One-off integration costs - (13) - Profit on sale of aircraft 11 - - Pre-tax profit (reported) 55 110 -50.3% Tax credit / (expense) 16 (27) +161.1% Profit after tax 71 83 -14.4% Earnings per share (basic reported)
Slide 8: Despite recession, H2 PBT per seat maintained
Despite recession, H2 PBT per seat maintained £m H2 ‘09 H2 ‘08 Change Total revenue 1,634 1,471 +11.1% Fuel (451) (445) +1.3% Operating costs (917) (775) +18.3% EBITDAR* 266 251 +6.1% Finance and ownership (92) (80) +16.9% Pre-tax profit* 174 171 +1.2% Fuel cost per seat - £ 15.31 15.50 -1.2% Pre-ta
Slide 9: Currency impact
Currency impact Currency split - total revenues Currency split - total costs other 3% euro 31% US dollar euro 42% 41% sterling 49% swiss franc 4% other 1% swiss franc sterling 23% 6% 6% Effective rates: dollar - F’09 1.78 v F’08 1.96; euro – F’09 1.16 v F’08 1.32 F ‘09 F ‘08 Change Total revenue per
Slide 10: Profit per seat build up
Profit per seat build up £5 .0 0 £1.19 £1.85 £4 .0 0 £0.64 £3 .0 0 £0.07 £2.37 £1.63 £2 .0 0 £0.83 £1 .0 0 £0 .0 0 2008 Prof it FX Impact Total Revenue Operating Interest Fuel * 2009 Prof it per seat cost ex f uel Income bef ore tax Positive underlying margin development * Includes impact of dollar
Slide 11: Growth in total revenue per seat
Growth in total revenue per seat F ‘09 F ‘08 Change Passengers (m) 45.2 43.7 +3.4% Load factor (%) 85.5 84.1 +1.4ppt Seats (m) 52.8 51.9 +1.8% Sector length (km) 1,101 1,073 +2.6% Total revenue (£m) 2,667 2,363 +12.9% Total revenue per seat £ 50.47 45.51 +10.9% @ constant currency 47.36 45.51 +4.1%
Slide 12: Passenger and ancillary revenues
Passenger and ancillary revenues F ‘09 F ‘08 Change Passenger revenue (£m) 2,151 1,996 +7.8% per seat 40.70 38.44 +5.9% Ancillary revenue incl. checked bag (£m) 516 367 +40.6% per seat 9.77 7.07 +38.2% Ancillary rev excl. checked bag per seat 5.26 4.29 +22.6% Checked bag per seat 4.51 2.78 +62.3% Ch
Slide 13: Cost per seat excluding fuel
Cost per seat excluding fuel £1.83 £3 6 .0 0 £3 5 .0 0 £0.21 £0.13 £34.36 £0.23 £0.64 £3 4 .0 0 £0.62 £3 3 .0 0 £3.04 £3 2 .0 0 £3 1 .0 0 £3 0 .0 0 £29.49 £2 9 .0 0 £2 8 .0 0 £2 7 .0 0 £2 6 .0 0 2008 Cost FX Impact Utilisation Interest Sector Airport mix Underlying 2009 Cost ex f uel per income leng
Slide 14: Cost per seat - key drivers at constant currency
Cost per seat - key drivers at constant currency change drivers Airports / handling +7.4% 4 Airport price increases circa £30m, partially offset by £10m savings 4 Increased winter disruption £4m 4 Continued mix shift to primary airports Crew +8.7% 4 Planned reduced aircraft utilisation over the Wint
Slide 15: Fuel and currency – impact on FY results
Fuel and currency – impact on FY results F ‘09 F ‘08 Difference Fuel $ / tonne * market rate 595 1,070 (475) effective price 951 948 3 US dollar rate market rate 1.56 1.99 (43) cents effective price 1.78 1.96 (18) cents Actual cost of fuel £/ tonne 536 484 52 £52 / tonne is equivalent to £86.1m or £
Slide 16: Fuel – hedging position and sensitivities
Fuel – hedging position and sensitivities 4 66% of anticipated Jet requirement for the full year to 30 September 2010 hedged using forwards at $750/MT 4 22% of anticipated Jet requirement for the full year to 30 September 2011 hedged using forwards at $722/MT 4 $10 movement in fuel price per metric
Slide 17: Currency– hedging position and sensitivities
Currency– hedging position and sensitivities Dollar 4 51% of anticipated US$ requirement for the full year to 30 September 2010 hedged using forwards at $1.72 4 20% of anticipated US$ requirement for the full year to 30 September 2011 hedged using forwards at $1.62 4 1$ cent movement in dollar will
Slide 18: Improved cash position
Improved cash position £m 1600 £471m (£508m) 1400 1200 £61m (£10m) £78m £1,075m* £60m 1000 £60m £863m* 800 600 400 200 g l ex t. r * es it * ta he cin '08 or of 09 pi ap al ot pr am n ca ' s p C na pt & g Se ft ng & tin Se ra Fi x .f n h rc ki ra ep h as nt Ai or pe as ti C D w O C ne et N x, Ta * I
Slide 19: Strong balance sheet
Strong balance sheet £m Sept ‘09 Sept ‘08 Fixed assets 1,612 1,103 Cash and money market deposits 1,075 863 Goodwill and other intangible assets 447 446 Other assets 539 689 Total assets 3,673 3,101 Debt 1,121 627 Other liabilities 1,245 1,196 Shareholders’ funds 1,307 1,278 Total equity and liabili
Slide 20: Net increase of 16 aircraft in the fleet
Net increase of 16 aircraft in the fleet Sept ‘09 Sept ‘08 Change B 737-700 (operating lease) 17 29 (12) A319 (operating lease) 46 46 - A319 (finance lease) 6 6 - A319 (owned) 88 68 20 A320 (owned) 15 15 155 120 35 GB Airways A320 (operating lease) 5 9 (4) GB A321 (owned) 4 7 (3) 9 16 (7) Total flee
Slide 21: Aircraft deliveries financed for next 18 months
Aircraft deliveries financed for next 18 months F ‘10 F ‘11 F ‘12 Net capital expenditure * $545m $500m $500m Deliveries 27 22 21 Exits 16 18 10 Net increase in fleet size ** 11 4 11 4 Operating cash flow generation 4 Cash and money market deposits of £1,075m 4 Existing financing (<100bp’s above LIB
Slide 22: Business review
Business review Andy Harrison Chief Executive Officer 22
Slide 23: Focus on all the drivers of margin improvement
Focus on all the drivers of margin improvement 4 Yield 4 Focused asset allocation to build Europe’s No.1 Air Transport Network 4 Route performance management 4 Improved yield management 4 Ancillary Revenues 4 Indirect pricing 4 Value added goods and services 4 Cost 4 Systems implementation to drive
Slide 24: Growth in capacity and unit revenues
Growth in capacity and unit revenues Carefully targeted seat growth of c. 20%, 2007 to 2009 with improved total revenue per seat (at constant currency) Quarterly growth Growth in TRPS in seats flown Indexed to 2007 from Q4 ‘07 114.0 125 Easter 112.0 120 Easter 110.0 115 108.0 106.0 110 104.0 105 102
Slide 25: easyJet’s relative performance has improved
easyJet’s relative performance has improved Reported profit before tax per seat easyJet Ryanair ex fuel for the six month period to: £21.47 £21.62 £21.23 £18.44 £18.86 £18.19 £11.06 £10.67 £9.29 £9.69 £8.36 £7.13 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Source: Credit Suisse 25
Slide 26: Network drives resilience
Network drives resilience Broad appeal across geographies and customer types ensures balanced revenue base 4 Convenient airports attractive to time sensitive consumers 4 Ruthless focus on schedule quality 4 easyJet business bookings increased in a declining market 4 Increasingly geographically diver
Slide 27: Network - well positioned for economic recovery
Network - well positioned for economic recovery 4 Breadth and depth of network Building Presence on top 100 routes (market pairs) 4 Leading presence on Europe’s top 100 routes Ï6 4 422 routes, 114 airports and 45 Non primary airports 6 20 bases 40 Ï 10 Number of market pairs 4 Nearly 300million cons
Slide 28: Asset allocation – targeted Winter growth
Asset allocation – targeted Winter growth Rest of UK France -2% +18% Gatwick Italy +14% +36% Spain +23% Mainland Europe +17% Winter 2010 easyJet capacity up 10% Competitor capacity down low single digits 28 Capacity growth by market refers to Q1 F’10
Slide 29: Continuous improvement in network quality
Continuous improvement in network quality Winter 2010 60% 50% 4 Continued improvement in business timings 40% and increased frequencies 30% 4 26 new routes added 20% 4 Expanding presence in Germany (DUS, MUC, HAM) 10% 0% 4 Further growth in Rome (5 new routes) <9:00AM 9:00-15:59 >16:00PM 4 Building
Slide 30: Further potential for ancillary growth
Further potential for ancillary growth 4 Opportunities 4 Increased Speedy Boarding penetration 4 In-flight spend per head improving 4 Improvements to easyJet.com to drive partner revenue conversion 4 Limited, selective increases in indirect pricing 4 Hotel and car hire currently impacted Aug fresh a
Slide 31: Delivering cost savings
Delivering cost savings 4 Additional £65m of cost reduction identified Original target Increased target p.a. by F’11 p.a. by F’12 Ownership - exit expensive aircraft from fleet £40m £30m Maintenance - in-sourcing, SRT deal & further contract £8m £35m renegotiation, efficiency projects Overheads - le
Slide 32: Best in class engineering costs
Best in class engineering costs 4 11 year deal, with 5 years break clause 4 Global tender process for airframe maintenance - SR Technics selected 4 Contract value $1.6bn over 11 years 4 Cost savings of around £175m over the life of the contract 4 Safety our No.1 priority 4 New low cost maintenance b
Slide 33: Efficient fleet management
Efficient fleet management 30 Sept 2009 30 Sept 2010 30 Sept 2011 30 Sept 2012 A319 140 159 171 182 A320 15 23 23 25 A320 GB spec 5 2 - - A321 GB spec 4 - - - B737 17 8 2 - Total 1811 192 196 207 4 Flexible fleet plan 4 Anticipated average annual growth rate of 7.5% per annum 4 Fleet plan can be adj
Slide 34: Trading in line with expectations
Trading in line with expectations % seats sold * F'10 F'09 100 F'08 F10 90 F09 F08 80 70 60 50 40 30 20 10 0 October November December January February March 4 First half bookings broadly in-line with prior year 4 Over 45% of available Winter seats now sold 4 Winter total revenue per seat expected t
Slide 35: Outlook
Outlook 4 easyJet’s pre tax result in 2010 at current fuel prices and exchange rates will benefit by around £100 million from lower fuel prices as higher price fuel hedges roll off, slightly offset by a strengthening US dollar. 4 Capacity, measured in seats flown, for both the first half and the ful
Slide 36: Summary
Summary 4 easyJet has traded well through a recession 4 Economic environment continues to be tough 4 easyJet strongly positioned 4 Europe’s No.1 air transport network 4 Strong, focused organisation to deliver cost savings 4 Financially resilient 4 Medium term - focused growth with margin improvement
Slide 37: Questions and answers
Questions and answers 37
Slide 38: Disclaimer
Disclaimer 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
Slide 39: Financial appendices
Financial appendices 39
Slide 40: Cost per seat analysis
Cost per seat analysis £ per seat Change vs F’08 F ‘09 Reported Constant currency Airports / handling 13.95 +18.9% +7.4% Crew 5.80 +14.4% +8.7% Navigation 4.40 +16.6% +1.5% Overhead & other costs 3.72 +9.3% +2.0% Ownership 3.43 +28.7% +19.4% Maintenance 3.06 +7.6% -4.1% Total (ex fuel)* 34.36 +16.5%
Slide 41: Key measures per ASK
Key measures per ASK pence F ‘09 F ‘08 Change Reported Constant currency Total revenue 4.58 4.24 +8.1% +1.4% Fuel 1.39 1.27 +9.1% -1.6% Costs ex fuel* 3.12 2.75 +13.6% +3.5% Underlying profit 0.08 0.22 -66.0% -7.3% Average sector length (km) 1,101 1,073 2.6% 41
Slide 42: easyJet vs. Ryanair reconciliation
easyJet vs. Ryanair reconciliation Adj. PBT / seat (ex fuel) Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Profit / (Loss) before tax (£m) (17.1) 219.0 (57.5) 167.7 (116.5) 171.2 Adjustments: Fuel (£m) 185.9 239.6 264.0 444.7 356.5 450.7 GB Airways integration costs (£m) – – 9.1 3.8 – – Profit on sale a