Slide 1: easyJet H1 2019 Results presentation
easyJet H1 2019 Results presentation
Slide 2: Introduction
introduction Johan Lundgren - CEO
Slide 3: Focusing on delivery
Focusing on delivery H1 performance in line with expectations Significant focus on H2 delivery • Customer, revenue, operations & cost Continuing to invest in our strategy • Investing in the network • Winning our customers loyalty • easyJet Holidays, Loyalty, Business making good progress • Inv
Slide 4: Financial review
Financial review Andrew Findlay - CFO
Slide 5: Key performance indicators
Key performance indicators H1 2019 H1 2018 Change* Seats flown (m) 46.2 40.4 14.5% Passengers (m) 41.6 36.8 13.3% Load factor (%) 90.1% 91.1% (1.0ppt) Average sector length (km) 1,068 1,071 (0.2%) Revenue per seat - reported currency (£) 50.71 54.10 (6.3%) Revenue per seat - constant currency (£) 50
Slide 6: Financial performance
Financial performance H1 2019 IFRS pre IFRS H1 2019 H1 2018 Change Impact Changes £m £m £m £m £m Total revenue 2,400 (57) 2,343 2,183 160 Headline costs: Headline costs excluding fuel (2,024) 8 (2,016) (1,740) (276) Fuel (602) 0 (602) (461) (141) Headline profit/(loss) before tax (226) (49) (275) (1
Slide 7: Revenue performance
Revenue performance Revenue per seat bridge Reported RPS = (6.3%) RPS @ cc = (7.4%) £54.10 -1.8% £0.96 -2.8% £1.54 -2.3% +1.3% £51.34 -2.3% £1.22 £0.70 +1.1% £50.71 +0.5% £1.22 £0.26 £0.59 £50.12 H1 2018 reported Seasonality Monarch exit/ Tegel Ancillary Underlying H1 2019 at CC Impact from H1 2019
Slide 8: Costs
costs Headline cost per seat bridge Headline CPS @ cc = (2.5%) £0.78 £56.66 Headline CPS ex fuel @ cc = (1.3%) £1.15 £0.67 £0.81 £55.88 £0.30 £0.21 £0.43 £55.07 £0.14 £54.53 H1 2018 Airports and Crew Ownership Overheads and Navigation Maintenance H1 2019 Fuel H1 2019 P&L FX H1 2019 headline ground h
Slide 9: Impact of IFRS 15&16 on income statement
Impact of IFRS 15&16 on income statement H1 2019 Description £m IFRS 15: Deferral of revenue to H2 and compensation payments offset against revenue (57) IFRS 15: Reclassification of compensation costs to offset revenue 6 Total IFRS 15 pre tax profit impact on H1’19 (51) IFRS 16: Reclassification of
Slide 10: Impact of fuel & currency
Impact of fuel & currency H1 2019 fuel impact H1 2019 H1 2018 Change* Fuel $ per metric tonne Market rate 650 620 (30) Effective price 645 547 (98) US dollar rate Market rate 1.29 1.36 7 cents Effective price 1.31 1.39 8 cents Difference between market rate and effective rate 0.02 0.03 Actual cost o
Slide 11: Strong cash generation
Strong cash generation Cash flow bridge Cash generated from operations (excluding dividends): £581m Investing and financing 617 11 28 121 1,721 233 1,373 236 465 1,280 85 8 4 255 Cash & Operating loss Depn & amort Net working Other Tax paid Ordinary Cash & MMDs Sale & Cash Capex Payment of Restricte
Slide 12: Strong balance sheet
Strong balance sheet 31 March 31 March 30 September £m 2019 2018 2018 (Restated) (Restated) Goodwill and other intangible assets 551 589 546 Property, plant and equipment (excluding RoU assets) 4,286 3,648 4,140 RoU assets under IFRS 16 572 - - Derivative financial instruments 48 106 364 Equity inve
Slide 13: Fuel and foreign exchange hedging
Fuel and foreign exchange hedging Fuel requirement US dollar requirement Euro Surplus Six months to 30 September 2019 73% @ $584/MT 77% @ 1.34/£ 74% @ 1.12/£ Full year ending 30 September 2019 72% @ $579/MT 83% @ 1.33/£ 68% @ 1.13/£ Full year ending 30 September 2020 58% @ $660/MT 61% @ 1.36/£ 61% @
Slide 14: Utilising flexibility in fleet planning
Utilising flexibility in fleet planning 410 403 Max fleet plan 390 385 370 367 353 No of aircraft 350 332 346 330 338 332 310 316 290 Min fleet plan 283 270 FY2019 FY2020 FY2021 FY2022 FY2023 - Upside cases assume extension of leases and ownership beyond year 16 - Downside cases assume sale at 16 ye
Slide 15: Gross capital expenditure
Gross capital expenditure c. £1,250m New IFRS Std's Base c. £1,100m c. £900m c.£900m FY19 FY20 FY21 FY22 15
Slide 16: H2 forward bookings
H2 forward bookings 92% 93% 90% 91% FY18 FY19 78% 75% 72% 72% 56% 54% 52% 52% 34% 34% H1 Apr May Jun Q3 Q4 H2 H2 2019 (Apr 2019 to Sep 2019) as at 10 May 2019 16
Slide 17: H2 capacity outlook
H2 capacity outlook 12.8% H2 FY18 H2 FY19 7.0% 5.2% 4.6% 3.6% 2.4% 2.5% -2.0% Capacity Capacitychange changetotal totalshort short Competitors Competitors on on easyJet Capacity Capacity change Change easyJet easyJet easyJetcapacity capacitychange change haul market haul Market easyJet markets marke
Slide 18: H2 easyJet growth
H2 easyJet growth 1.4% 7.0% 1.1% 0.9% 1.3% 2.3% Annualisation & Up-gauging Manchester Nantes new Tegel H2’19 capacity underlying growth base annualisation growth H2 2019 (Apr 2019 to Sep 2019) 18
Slide 19: Outlook
Outlook FY 2019 headline profit before tax Cost per seat at constant currency > Unchanged PBT expectations, in line with current market > FY headline cost per seat excluding fuel (updated for IFRS consensus# 15): > Down (assuming normal levels of disruption) Capacity (seats flown) FX / Fuel* > H2 c.
Slide 20: CEO update
Ceo update Johan Lundgren
Slide 21: Early initiatives delivering results
Early Initiatives delivering results Call centre processing times decrease Initiatives delivered Results delivered significantly > Contactless payment system Auto bag drop to increase onboard sales H1 underlying RPS Customer facilities for > Rolling out Auto Bag Drop to 17 airports > Call centre imp
Slide 22: Structural demand for travel remains resilient
Structural Demand for travel remains resilient *Of the major purchases you are intending to make in the next 12 months, how much of a priority is travelling for leisure for you? It is a top priority 16% It is a serious priority 47% 63% +4ppts vs 2017 It is somewhat a priority 20% It is not a priorit
Slide 23: Our priorities – delivering our strategy
Our priorities – delivering our strategy #1 or #2 in Winning our customers’ Value by The right Innovating primary loyalty efficiency people with data airports Driving value in H1 2019 Best value airline in #1 in Berlin Europe* £45 million of cost 7% Pilot and 5% crew 39 data team members New base at
Slide 24: #1 or #2 in primary airports
#1 or #2 in primary airports Slot constrained – Primary Airports Increasing No1 positions across the network 30 Share of 2018/19 Airport position Total Winter capacity #1 #2 Other 25 Level 3 constrained 38% 17% 20% 75% Level 2 constrained 8% 1% 3% 12% 20 Other 8% 3% 2% No of airports 13% Total 54% 2
Slide 25: Winning our customers' loyalty
Winning our customers’ loyalty Investing in winning our customers loyalty Delivering results > Attractive fares in primary CSAT scores airports Satisfaction with crew at Easter 2019: Great offer all time high > Most preferred airline with 86% OTP 4.5pts more satisfied No cancellations highes
Slide 26: easyJet Holidays
easyJet Holidays The opportunity Progress so far Highly experienced management team and board 20m in place People who flew with easyJet for leisure and booked accommodation elsewhere 500 direct hotel relationships in 2020 Technology and web partners confirmed Leading network for Multiple frequ
Slide 27: Value by efficiency
Value by efficiency Investing in value by efficiency Results delivered > Efficiency and cost reduction £545m in cost reductions delivered since 2011 Strategic cost projects for each cost line reduction Will deliver over £100m in strategic cost savings in 2019 programme > Strategic FX and fuel he
Slide 28: Operational resilience
Operational resilience Investing in operational resilience Results delivered Schedule Improved turn times and increased firebreaks to better design absorb delays Event volumes down Crew Proactively split 900 crew pairings so standby crew are in resilience the right place at the right time 33% YTD Su
Slide 29: The right people
The right people Investing in the right people Results delivered A good place to work. > Engaging regularly and directly Engaging our > High retention with our people through Overall people Peakon and Workplace engagement score • 6% - total turnover 8/10 • 5% - crew turnover Giving them the > ePOS e
Slide 30: Innovating with data
Innovating with data Investing in Data Results delivered Improve > New bundled fare offerings Highest ranked low cost carrier for value perception customer > Auto boarding gates trial First choice low cost carrier brand Europe wide experience > Single Customer View Increased offer customisatio
Slide 31: Delivering shareholder value
delivering shareholder value #1 or #2 in Winning our customers’ Value by The right Innovating primary loyalty efficiency people with data airports Delivering shareholder value Maximise Maximise Generate sustainable positive PBT/ seat ROCE cash flows 31
Slide 32: Q&A
Q&A
Slide 33: Appendix
Appendix
Slide 34: Loss after tax
Loss after tax £m H1 2019 H1 2018 Headline profit/(loss) before tax (275) (18) Headline tax (charge)/credit 54 5 Headline loss after tax (221) (13) Total loss before tax (272) (68) Total tax credit 54 14 Total loss after tax (218) (54) Total effective tax rate 19.7% 19.8% * Favourable/(adverse) 34
Slide 35: Revenue Total and Per Seat
Revenue Total and Per Seat Total reported Total H1 2019 H1 2018 Change* Passenger revenue 1824 1729 5.5% Ancillary revenue 519 454 14.3% Total revenue 2343 2183 7.3% £ per seat reported Total H1 2019 H1 2018 Change* Passenger revenue 39.48 42.84 (7.9%) Ancillary revenue 11.23 11.26 (0.2%) Total reve
Slide 36: Headline cost per seat
headline COST PER SEAT Cost per Weighted Variance at Variance at seat variance at constant constant excluding constant Drivers currency* currency* fuel currency* £ % £ % • Annualised increases in charges at regulated airports Airports and ground handling 16.78 (0.14) (0.8%) (0.3%) • Annualisation of
Slide 37: Increasing proportion of A320s
Increasing proportion of A320’s H1 2019 FY 2018 Change A319 (Leased) 56 53 3 A319 (owned) 69 79 (10) A319 Total 125 132 (7) A320 (Leased) 43 42 1 A320 (owned) 147 139 8 A320 Total 190 181 9 A321 (owned/Total) 5 2 3 Total fleet 320 315 5 Leased 31% 30% 1ppt Number unencumbered 221 220 1 Percentage of
Slide 38: Return on capital employed
Return on capital employed H1 2019 H1 2019 H1 2018 £m Pre-IFRS adoption Reported Reported Headline loss before interest and tax (218) (256) (8) Interest element of operating lease payments 30 - 25 Headline (loss)/profit before interest and tax – adjusted (188) (256) 17 UK corporation tax rate 19% 19
Slide 39: Non-headline items
Non-headline items H1 2019 H1 2018 Description £m £m The sale and leaseback of 10 A319 aircraft in both years resulted in a profit on disposal of the assets of £2 million. In H1’18 there was an £11m loss on Sale and leaseback 2 (19) disposal plus an £8 million maintenance provision catch up (under t
Slide 40: Currency impact
Currency impact Revenue Costs H1 2019 H1 2018 H1 2019 H1 2018 Sterling 41% 44% 32% 32% Euro 48% 44% 37% 39% US dollar 1% 1% 24% 22% Other (principally Swiss franc) 10% 11% 7% 7% Average effective Euro rate for revenue for H1 2019 was €1.13 (H1 2018: €1.15) Average effective Euro rate for costs for H
Slide 41: Adoption of IFRS 15
Adoption of IFRS 15 Change in accounting: • Revenue recognition from certain revenue streams, principally administration and change fees, are now recognised on the date of flight rather than the date of booking. • Some of the compensation payments made to customers (in respect of flight delays), pre
Slide 42: Adoption of IFRS 16
Adoption of IFRS 16 Change in accounting: • All aircraft operating leases have been capitalised on the balance sheet as a right-of use asset with a corresponding lease liability representing easyJet’s obligation to make lease payments. Lease costs previously recognised within the Income Statement ha
Slide 43: Adoption of IFRS 9
Adoption of IFRS 9 Change in accounting: • Some changes have been applied to the classification and measurement of financial instruments. • easyJet does not have a material impact from changes to hedge accounting requirements or impairment due to the high credit quality of counterparties with which
Slide 44: Q2 Passenger statistics
Q2 Passenger statistics January 2019 2018 Change Passengers 5,838,198 5,305,991 10.0% Load Factor 86.5% 86.4% 0.1Pts February 2019 2018 Change Passengers 6,498,267 5,792,624 12.2% Load Factor 91.5% 91.2% 0.3Pts March 2019 2018 Change Passengers 7,721,347 6,908,864 11.8% Load Factor 93.1% 92.2% 0.9Pt