Slide 1: H1 2017 analyst & investor presentation
H1 2017 analyst & investor presentation Tuesday 16th May 2017
Slide 2: Introduction
Introduction Carolyn McCall Chief Executive Officer
Slide 3: easyJet is in a strong position
easyJet is in a strong position Purposeful and disciplined growth; strengthening our market positions Network Improving revenue trend Cost Strong cost control in H1 delivering flat headline CPS ex fuel (@cc) Customer Top ranked LCC in UK, Switzerland and France offering great value and quality servi
Slide 4: Financial review
Financial review Andrew Findlay Chief Financial Officer
Slide 5: Key performance indicators
Key performance indicators H1 2017 H1 2016 Change* Seats flown (m) 37.5 34.5 8.4% Passengers (m) 33.8 31.0 9.0% Load factor (%) 90.2% 89.7% +0.5ppt Average sector length (km) 1,058 1,054 0.4% Revenue per seat - reported currency (£) 48.80 51.29 (4.9%) Revenue per seat - constant currency (£) 46.32 5
Slide 6: Financial performance
Financial performance H1 2017 H1 2016* Change** £m £m Total revenue 1,827 1,771 3.2 % Headline costs: Headline costs excluding fuel (1,580) (1,330) (18.7) % Fuel (459) (462) 0.5 % Headline loss before tax (212) (21) £(191) m Headline loss before tax at constant currency (130) (21) £(109) m Non-headl
Slide 7: H1 Revenue performance
H1 Revenue performance Revenue per seat bridge (2.4%) £1.23 (7.3%) 4.8% (4.9%) £51.29 £3.74 £2.48 £48.80 (9.7%) Footer box on intersect of lines line h=8.03 9 and v=8.75 with£46.32 font 10pt Arial not bold H1 2016 Easter Underlying Before FX FX H1 2017 market conditions 7 7
Slide 8: A strong focus on costs
A strong focus on costs Headline cost per seat bridge • Total headline cost per seat at constant currency: 4.1% decrease • Headline cost per seat ex fuel at constant currency: Remains flat Flat headline cost per seat ex fuel variance at constant currency 4.66 54.45 0.30 0.12 1.13 0.30 0.24 0.41 51.9
Slide 9: Impact of fuel & currency
Impact of fuel & currency H1 2017 fuel impact H1 2017 H1 2016 Change* Fuel $ per metric tonne Market rate 500 409 (91) Effective price 662 786 124 US dollar rate Market rate 1.24 1.48 (24 cents) Effective price 1.47 1.61 (14 cent) Difference between market rate and effective rate 0.23 0.13 Actual co
Slide 10: Strong cash generation
Strong cash generation Cash flow bridge • Net cash: £353m (FY16: £213m) • Adjusted net debt: £333m (FY16 restated: £424m) Cash generated from operations (excluding dividends): £560m Investing and financing 229 21 667 28 115 1,287 9 1,308 302 6 214 24 969 92 220 Footer box on intersect of lines line
Slide 11: Strong balance sheet
Strong balance sheet 30 September 31 March £m 2017 2016 (restated) Goodwill and other intangible assets 533 517 Property, plant and equipment 3,314 3,252 Derivative financial instruments 123 98 Other assets (excluding cash and money market deposits) 367 324 Unearned revenue (1,298) (568) Other liabi
Slide 12: A321 – delivering cost & revenue benefits
Capital A321 – delivering cost & revenue benefits Discipline 30 A321 NEO’s added to fleet plan • Provides further structural advantage A319 CEO – 156 seats • Maximises constrained high value, peak-day flying • Will deliver an 8-9%* cost per seat A320 CEO – 186 seats benefit and incremental contribut
Slide 13: Up-gauging delivering CPS savings
Capital Discipline / Up-gauging delivering CPS savings Tough on cost Fleet up-gauging Delivering CPS savings easyJet fleet mix 100% 1% 1% 3% 6% 9% 9% A319 CEO – 156 seats 90% 11% 28% 12% 21% 80% 31% 7% -8% saving Mix of fleet (%) 70% 73% A320 & 60% 20% 49% A321 A320 CEO – 180 seats 45% 19% 50% 43% 6
Slide 14: Utilising flexibility in fleet planning
Utilising flexibility in fleet planning Revised base case fleet numbers Up and down side flexibility 370 370 364 360 Prior base plan 360 Current max plan 357 350 350 343 338 343 340 335 340 Aircraft numbers Current base plan 330 330 Current base plan 327 327 320 320 316 312 310 310 301 304 298 304 3
Slide 15: Gross capital expenditure
Gross capital expenditure Prior capex plan: £1,100m £1,050m c. £250m reduction in CAPEX in next 3 years £650m £1,050m • Revised Capex spend post £950m £800m capacity review process £700m • Profile represents new schedule based on latest agreement with Airbus which includes A321 purchases • Maintenan
Slide 16: Business Review
Business Review Carolyn McCall Chief Executive Officer
Slide 17: Driving strategic delivery
Driving strategic delivery Purposeful network strategy & Differentiated proposition + Capital Discipline + Tough on cost Supported by Strong balance sheet = 50% dividend payout Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold & Long term shareholder returns 17
Slide 18: Ruthless capital discipline
Capital Ruthless capital discipline Discipline Purposeful growth strategy Capacity • easyJet undertake a bi-annual, thorough analysis of capacity to Build & strengthen No1 positions reflect the market environment and fuel price Take advantage of growth opportunities • Disciplined approach to opportu
Slide 19: Purposeful allocation of capacity
Purposeful network Purposeful allocation of capacity strategy Returns driven by strong network positions at primary airports…. • Leverage, build and strengthen The sweet spot is being No1 at the Highly profitable • Strong positions airport and No1 behind legacy on the route carriers 56% of H1 growth
Slide 20: Delivering purposeful investment in H1
Purposeful network Delivering purposeful investment in H1 strategy easyJet Growth Market Growth H1 2017 17% 16% 15% 12% 10% 10% 9% 9% 8% 8% 8% 7% 6% 4% 4% 4% UK Switzerland France Netherlands Italy Germany Portugal Spain Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial
Slide 21: Strong positions in slot constrained airports
Purposeful Strong positions in slot constrained airports network strategy Current EZY share @ EZY H1 EZY H2 Airport H2 Airport1 morning peak airport growth growth growth utilisation 80% of easyJet London Gatwick 47.3% 2.3% 4.3% 2.8% capacity touches London Luton 42.5% 17.3% 16.7% 4.8% an airport t
Slide 22: Building & strengthening - No1 positions
Purposeful network Building & strengthening - No1 positions strategy H2 2017 Gatwick Luton 62 aircraft 23 aircraft Schiphol Bristol 4.3% 16.7% 18 aircraft 14 aircraft 2.8% 8.6% 7.6% 4.8% 6.0% 8.5% Venice 9 aircraft Lyon 8 aircraft 15.5% 5.2% 5.4% 0.6% Nice 14 aircraft Geneva 7.8% 25 aircraft 9.9% Fo
Slide 23: Improving capacity trend on easyJet markets
Improving capacity trend on easyJet markets easyJet capacity growth Competitor capacity growth 8.8% 8.4% 8.4% 8.2% 7.6% 6.2% 5.8% 4.8% H2 ‘16 H1 ‘17 Q3 ‘17 Q4 ‘17 H2 ‘16 H1 ‘17 Q3 ‘17 Q4 ‘17 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold easyJet market pairs
Slide 24: Customer focus driving brand and loyalty
Differentiated Customer focus driving brand and loyalty Proposition London Gatwick North Terminal consolidation easyJet Plus Mobile Footer boxapp on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold c.26% of ecommerce bookings on mobile devices 24 24
Slide 25: Revenue initiatives
Differentiated Proposition Revenue initiatives Continuing to improve Innovation driving future revenue RMS Optimisation Network Optimisation New Digital Platform Data Science Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 25 25
Slide 26: Lean initiatives underpin strong cost control
Tough on cost Lean initiatives underpin strong cost control Utilising structural advantage • Young fleet reduces maintenance costs • Leverages size to drive economies of scale CPS ex fuel target: flat 2015 vs 2019* • Low cost of funding from strong balance sheet Strong pipeline of LEAN initiatives •
Slide 27: Investing in resilience
Investing in resilience Actions delivered in H1 Ongoing resilience investment London Gatwick North Predictive maintenance Terminal consolidation • Working with Airbus and leading data science companies Customer Disruption to leverage data directly gathered from aircraft Program (CDP) initiated • Exp
Slide 28: Self help initiatives deliver operational improvements
Self help initiatives deliver operational improvements Improving on time performance London Gatwick North Terminal consolidation Strong operational performance over busy Easter period* Easter 2016 Easter 2017 Change Total Sectors 28,380 32,087 +13.1% Network OTP 76.3% 85.3% +9.0 ppts LGW OTP 66.7% 8
Slide 29: H2 forward bookings
H2 forward bookings H2 bookings ahead of prior year % seats sold* 93% 90% 83% 82% Last Year This Year 77% 77% 58% 57% 55% 53% 46% 44% 34% 34% 32% 31% 22% 18% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Apr May Jun Q3 Jul Aug Sep Q4 H2 H2 2017 (April 2017 t
Slide 30: Outlook in 2017
Outlook in 2017 Capacity (seats flown) • H2 c.+8.5% (before disruption) • FY c.+8.5% (before disruption) Revenue per seat at constant currency • Q3 revenue per seat: Low single digit decline Cost per seat at constant currency (Unchanged) • FY headline cost per seat excluding fuel: up c.1% (assuming
Slide 31: Summary
Summary • EU AOC on track to be announced this summer • Strong structural business • Resilient performance in H1 • Improving RPS trend • Right actions and right position to benefit in the future Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 31 31
Slide 32: Q&A
Q&A
Slide 33: Appendix
appendix
Slide 34: Fuel and foreign exchange hedging
Fuel and foreign exchange hedging Fuel requirement US dollar requirement Euro Surplus Full year ending 30 84% @ $612/tonne 82% @ $1.50/£ 91% @ EUR1.35/£ September 2017 Half year ending 30 52% @ $520/tonne 53% @ $1.36/£ 60% @ EUR1.22/£ September 2018 Full year ending 30 60% @ $516/tonne 59% @ $1.40/£
Slide 35: Loss after tax
Loss after tax £m H1 2017 H1 2016* Change** Headline loss before tax (212) (21) (892.3%) Headline tax charge 40 3 1,183.1% Headline loss after tax (172) (18) (842.8%) Total loss before tax (236) (18) (1,214.7%) Total tax charge 44 3 1,319.5% Total loss after tax (192) (15) (1,192.7%) Effective tax r
Slide 36: Revenue per seat
Revenue per seat £ per seat H1 2017 H1 2016 Change* Seat revenue 47.82 50.39 (5.1%) Non-seat revenue 0.98 0.90 8.7% Total revenue 48.80 51.29 (4.9%) Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold * Favourable /(adverse) 36 36
Slide 37: Headline cost per seat excluding fuel – key drivers
Headline cost per seat excluding fuel – key drivers Weighted Cost per seat Variance at Variance at variance at excluding constant constant constant Drivers fuel currency* currency* currency* £ £ % % Navigation 4.25 0.14 3.5% 0.4% • Price benefits in France and Germany • Upgauging of fleet from A319s
Slide 38: Increasing proportion of A320's
Increasing proportion of A320’s H1 2017 FY 2016 Change A319 (operating lease) 55 45 10 A319 (owned / finance lease) 89 99 (10) A319 Total 144 144 0 A320 (operating lease) 18 18 0 A320 (owned / finance lease) 104 95 9 A320 Total 122 113 9 Total fleet 266 257 9 Operating lease 27% 25% (2ppt) Number un
Slide 39: Non-headline costs
Non-headline costs Sale and Leaseback charge Income statement impact • £10m loss on disposal of aircraft (reflecting the transfer of the residual value risk) • £6m maintenance catch-up provision (reflecting the fact that the aircraft have to be returned to the lessor at the end of the lease in a par
Slide 40: Currency impact
Currency impact Currency split – total revenue Currency split – total costs Swiss Franc, Other, 2% Swiss Franc Other, 2% 9% 6% USD, 1% USD, Sterling, Sterling, 23% 33% 45% Euro, 43% Euro, 36% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Average effective Eu
Slide 41: Currency impact
Currency impact Revenue Costs H1 2017 H1 2016 H1 2017 H1 2016 Sterling 45% 47% 33% 29% Euro 43% 41% 36% 33% US dollar 1% 1% 23% 32% Other (principally Swiss franc) 11% 11% 8% 6% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Average effective Euro rate for re