Slide 1: Interim results
Interim results 6 May 2009
Slide 2: Introduction
Introduction Andy Harrison Chief Executive Officer
Slide 3: Business on track in a difficult environment
Business on track in a difficult environment 4 Results in line with expectations, increase in underlying pre-tax loss from £48.4m to £129.8m driven by: 4 increase in unit fuel cost: £90.6m, largely driven by net impact of hedging 4 net adverse impact of c. £70m in H1 ’09 vs c. £25m net benefit in H1
Slide 4: Business on track in a difficult environment
Business on track in a difficult environment 4 Position strengthened both operationally and financially 4 over 50% passengers now originate outside the UK 4 market share gains - easyJet passengers up 2.9% to 19.4m when capacity fell 5% in European short haul 4 focused investment in key growth market
Slide 5: Finance review
Finance review Jeff Carr Group Finance Director
Slide 6: Financial results
Financial results £m H1 ‘09 H1 ‘08 Change Total revenue 1,032.8 892.2 15.8% Fuel (356.5) (264.0) (35.0)% Operating costs excluding fuel* (717.2) (617.2) (16.2)% EBITDAR* (40.9) 11.0 (471.8)% Finance and ownership* (88.9) (59.4) (49.7)% Pre-tax loss (underlying) (129.8) (48.4) (168.2)% Margin* (12.6)
Slide 7: Net income, EPS, ROE
Net income, EPS, ROE £m H1 ‘09 H1 ‘08 Change Pre-tax loss (underlying) (129.8) (48.4) (168.2)% One-off integration costs - (9.1) - Profit on sale of aircraft 13.3 - - Pre-tax loss (reported) (116.5) (57.5) (102.6)% Tax 30.6 14.2 115.5% Net loss (85.9) (43.3) (98.4)% Loss per share (basic reported) (
Slide 8: Impact from currency
Impact from currency 4 Over 50% of easyJet’s business is non UK originating Currency split - total revenues Currency split - total costs other 2% euro 31% US dollar euro 44% 43% sterling 48% swiss franc 4% other 1% sterling 21% swiss franc 6% H1 ‘09 H1 ‘08 Change Total revenue per seat (rps) £44.12
Slide 9: Change in pre-tax result per seat build up
Change in pre-tax result per seat build up pence per seat 2008 loss Currency Total revenue Costs excl fuel Fuel (incl 2009 loss per seat impact excl currency & currency* currency) per seat (excl fuel) (189)p (208)p (61)p 291p (387)p (554)p Positive margin development - excluding fuel and currency *
Slide 10: Strong growth in total revenue per seat
Strong growth in total revenue per seat H1 ‘09 H1 ‘08 Change Passengers (m) 19.4 18.9 2.9% Load factor (%) 82.9 81.2 1.7ppt Seats (m) 23.4 23.2 0.8% Sector length (km) 1,057 1,009 4.8% Total revenue (£m) 1,032.8 892.2 15.8% Total revenue per seat £ 44.12 38.40 14.9% @ constant currency 41.31 38.40 7
Slide 11: Passenger and ancillary revenues
Passenger and ancillary revenues H1 ‘09 H1 ‘08 Change Passenger revenue (£m) 819.2 751.0 9.1% per seat 35.00 32.32 8.3% Ancillary revenue (£m) 213.6 141.2 51.3% per seat 9.12 6.08 50.0% Change in ancillary revenue per seat vs 2008 Baggage / sporting goods 82.4% Speedy boarding and other 31.7% discre
Slide 12: Cost per seat excluding fuel
Cost per seat excluding fuel £1.89 £3 6 .0 0 £3 5 .0 0 £0.17 £34.43 £0.39 £0.56 £3 4 .0 0 £0.77 £3 3 .0 0 £3.42 £3 2 .0 0 £3 1 .0 0 £3 0 .0 0 £29.12 £2 9 .0 0 £2 8 .0 0 £2 7 .0 0 £2 6 .0 0 2008 Cost ex FX Impact Utilisation Net interest Sector length Underlying 2009 Cost ex f uel per seat * cost inc
Slide 13: Cost per seat analysis
Cost per seat analysis £ per seat Change vs H1’08 H1 ‘09 Reported Constant currency Overhead & other costs 3.32 +20.0% +19.6% Navigation 4.18 -19.4% +1.1% Airports / handling 13.73 -23.2% -7.2% Crew 6.16 -17.3% -10.1% Maintenance 3.24 -28.1% -15.0% Ownership 3.80 -49.0% -40.2% Total (ex fuel)* 34.43
Slide 14: Cost per seat - key drivers at constant currency
Cost per seat - key drivers at constant currency change** drivers Overhead & other costs +19.6% 4 Benefit from head office redundancies made in September 2008 4 Boeing spares cost optimisation project - £8m Navigation +1.1% 4 Euro control pricing offset by route mix Airports / handling -7.2% 4Airpor
Slide 15: Fuel and currency – impact on H1 results
Fuel and currency – impact on H1 results H1 ‘09 H1 ‘08 Difference Fuel $ / tonne * market rate 646 863 (217) 1,003 798 205 effective price US dollar rate market rate 1.55 2.02 (47) cents 1.82 1.97 (15) cents effective price Actual cost of fuel 552 406 146 £/ tonne £146 / tonne is equivalent to £91m
Slide 16: Fuel and currency – hedging position
Fuel and currency – hedging position Position - six months to 30 September 2009 4 Fuel - 70% of remaining requirement hedged at $1,073 per tonne, (H2 ‘08 effective price of $1,031 per tonne*) 4 US dollar - 60% of remaining dollar requirement hedged at $1.95, (H2 ‘08 effective rate of $1.95) 4 Euro -
Slide 17: Fuel and currency – hedging position
Fuel and currency – hedging position Position - 12 months to 30 September 2010 4 Fuel - 42% of anticipated requirement hedged at $796 per tonne* 4 US dollar - 34% of anticipated dollar requirement hedged at $1.78 4 Euro - 42% of anticipated euro surplus hedged at €1.23. £ unit cost of fuel will redu
Slide 18: Good cash generation
Good cash generation £m £93m £254m (£262m) 1,300 £215m £59m 1,200 £1,131m* £26m 1,100 1,000 £(116)m 900 £862m* 800 700 600 ex s r g ss t. * 8* l ta he le n or 9 '0 lo ap pi ci '0 sa ot am n ca p g C ch na & Se ft tin & ra ng ar fx Fi ra rc h n M ki t. pe as ep Ai or in h C O D as w et C et ,n N x Ta
Slide 19: Strong balance sheet
Strong balance sheet £m Mar ‘09 Sep ‘08 Fixed assets 1,335 1,103 Cash and money market deposits 1,131 862 Goodwill and other intangible assets 446 446 Other assets 772 690 Total assets 3,684 3,101 Debt 1,022 627 Other liabilities 1,621 1,196 Shareholders’ funds 1,041 1,278 Total equity and liabiliti
Slide 20: Net increase of eight aircraft in the fleet
Net increase of eight aircraft in the fleet March ‘09 Sept ‘08 Change B 737-700 (operating lease) 24 29 (5) A319 (operating lease) 46 46 - A319 (finance lease) 6 6 - A319 (owned) 85 68 17 A320 (owned) 1 1 138 120 18 GB Airways A320 (operating lease) 6 9 (3) GB A321 (owned) 5 7 (2) 11 16 (5) Total fl
Slide 21: Future sources of financing
Future sources of financing H2 ‘09 F ‘10 F ‘11 Capital expenditure $550m $850m $750m Deliveries 17 27 24 Net increase in fleet size * (1) 15 7 1. Strong operating cash flow generation 2. Cash and money market deposits of £1,131m 3. Significant financing available at excellent rates (<100bp’s above L
Slide 22: Business review
Business review Andy Harrison Chief Executive Officer
Slide 23: Continued focus on the value drivers
Continued focus on the value drivers 4 Network - drives superior revenue performance 4 Targeted growth to strengthen position in key markets 4 Balanced customer mix provides resilience 4 Good load factors 4 Continued competitor capacity reductions 4 Margins 4 Continue to optimise network to drive yi
Slide 24: Network – strategy of targeted growth delivering
Network – strategy of targeted growth delivering Five million growth in based seats between 2006 to 2009 2.4m 1.8m 1.0m (0.5)m 0.6m Remaining 15 bases Gatwick Paris Milan Madrid 4 easyJet passengers on Mainland European based routes up 21% in H1 2009 compared to market reduction of c.5% 4 Contributi
Slide 25: Continue to strengthen position in key markets
Continue to strengthen position in key markets Growth targeted at Gatwick, Paris, Milan and Madrid 4 Gatwick 4 easyJet the leading short haul airline at Gatwick 4 London is largest European network point and Gatwick has largest London airport catchment area 4 Gatwick slot congested at peak times 4 G
Slide 26: Continue to strengthen position in key markets
Continue to strengthen position in key markets Growth targeted at Gatwick, Paris, Milan and Madrid 4 Milan 4 easyJet the leading airline at Milan Malpensa 4 Milan – 5th biggest European network point; Malpensa has the largest catchment area of x2 Linate, x3 Bergamo 4 Alitalia reduced seats in Milan
Slide 27: Balanced customer mix provides resilience
Balanced customer mix provides resilience 4 H1 ‘09 – the growth in long breaks and Change in passenger mix (volume) business offset weakness in 40% 35% 33.5% discretionary travel 30% 31.9% 26.7% 25.3% 4 easyJet has a great business product: 25% 20% 19.0% 19.6% 22.2% 21.8% 4 Convenient airports & lea
Slide 28: Good load factor performance
Good load factor performance % movement versus prior year 6 October November December January February March 4 2 0 -2 -4 -6 -8 Ryanair Aer Lingus * BA * Iberia * Air France * LH * easyJet * Short haul only 28
Slide 29: Continued competitor capacity reductions
Continued competitor capacity reductions Capacity changes summer 2009 v summer 2008; total Europe declines 6% 50% 40% 38% 30% 20% 14% 10% 7% 2% 1% 0% -2% -4% -4% -5% -6% -10% -8% -12% LGW UK total Paris Malpensa Madrid Total -20% Europe easyJet Market Source OAG 29
Slide 30: Margins – continue to optimise network
Margins – continue to optimise network 60% 4 Utilisation back to normal levels for summer 50% 40% back to over 11 hours 30% 20% 4 Seats now on sale 12 months ahead 10% 0% 4 10% growth in seats on sale for winter 2009/10 <9:00AM 9:00-15:59 >16:00PM 4 37 routes added for summer (4 new network S08 S09
Slide 31: Margins – grow ancillaries
Margins – grow ancillaries Drive ancillary revenues through improved execution and innovation 4 Strong track record of delivery 4 Continual improvement to easyJet.com drives conversion on car hire and hotels 4 In-flight improved product offering £5.26 £3.85 £4.17 £3.38 H1 06 H1 07 H1 08 H1 09 Ancill
Slide 32: Margins – reduce costs
Margins – reduce costs Target to drive cost savings of c. £125m p.a. by end F’11, c.£40m initiatives will be place by end F’09. 2009 initiatives Ownership - exit expensive aircraft from fleet 4 Lease returns 2009: 12 x Boeing 737, 4 x GB A320 Target £40m pa by F’11 4 2 A321 aircraft sold, 5 further
Slide 33: Fleet – exit expensive sub-fleets
Fleet – exit expensive sub-fleets 4 Current plan is for net increase of 21 aircraft to 30 September 2011 4 H1 ‘09; two A321 sold; three A320 and five B737 returned to lessors 4 47 further aircraft exiting the fleet by F’11 4 Sale of five A321 and five A319 progressing but financing market difficult
Slide 34: Forward bookings
Forward bookings % seats sold * 90 F'09 F'08 80 70 60 50 40 30 20 10 0 March and May June July August September April 4 Second half load factors broadly in line with prior year 4 August load factors slightly behind 2008 strong performance but within our expectations 4 Total revenue per seat for the
Slide 35: Outlook
Outlook 4 easyJet expects market capacity measured by seats flown on easyJet routes, to fall by 6% this summer compared to the prior year. In the second half easyJet will grow its seats flown by around 2%, as previously indicated; average sector length and load factors are expected to remain broadly
Slide 36: Conclusion
Conclusion 4 2009 continues to be tough and uncertain 4 Very weak consumer environment 4 Volatility of fuel and currency 4 Unpredictable impact from swine flu 4 easyJet strongly positioned 4 Europe’s No.1 air transport network 4 Strong, focused organisation with potential for further cost savings 4
Slide 37: Questions and answers
Questions and answers
Slide 38: Appendices
Appendices
Slide 39: Key measures per ASK
Key measures per ASK pence H1 ‘09 H1 ‘08 Change Reported Constant currency Total revenue 4.17 3.81 9.6% 2.7% Fuel 1.44 1.13 (27.9)% (16.9)% Costs ex fuel* 3.26 2.89 (12.8)% (1.6)% Underlying loss (0.52) (0.21) (147.6)% (65.8)% Average sector length (km) 1,057 1,009 4.8% * Underlying number; operatin
Slide 40: Fleet plan
Fleet plan F’08 F’09 F ‘10 F’11 A321 (GB spec) 7 - - - A320 (GB spec) 9 5 2 - A320 (easyJet spec) - 15 23 23 A319 120 135 154 169 A320 family 136 155 179 192 B737 29 17 8 2 Total 165 172* 187 194 * Assumed 10 aircraft for sale exit fleet by September 2009 40
Slide 41: Euro hedging position for F '09
Euro hedging position for F ‘09 1.50 1.40 1.30 56% Forwards €1.24 1.20 Forward Curve 1.10 1.00 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 41
Slide 42: US dollar hedging position for F '09
US dollar hedging position for F ‘09 2.10 58% Forwards $1.96 2.00 GBP / USD FX Rate 1.90 2% Collars $1.83 - $1.92 1.80 1.70 1.60 Forward Curve 1.50 1.40 1.30 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 42
Slide 43: Jet hedging position for F '09
Jet hedging position for F ‘09 1400 1300 1200 USD per Metric Tonne 70% Forwards $1,073 1100 Historical monthly prices 1000 900 800 700 Forward Curve 600 500 400 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 43