Slide 1: FY 2017 Analyst & investor presentation
FY 2017 Analyst & investor presentation 21 November 2017
Slide 2: Business review
business review Carolyn McCall- Chief Executive Officer
Slide 3: Proven business model in all market conditions
Proven business model in all market conditions • Strong performance in a tough year • £509m headline PBT (@ constant currency) • Purposeful and disciplined growth; reinforcing our market positions • Capacity growth of 8.5% • Revenue and network differentiate easyJet and drive RPS • Positive revenue
Slide 4: Robust & sustainable business model
Robust & sustainable business model Winning Network Strategy Relentless Focus on Cost Lean delivers sustainable savings* 400 85 95 46 32 43 41 58 2011 2012 2013 2014 2015 2016 2018 2011-17 Continuing to Innovate Focused on Our Customers Committed to our People * Financial year Lean savings in £ mill
Slide 5: H1 growth in European Short Haul market
H1 growth in European Short Haul market H1 2018 capacity (Oct’17 – Mar’18) Capacity taken out by Ryanair & Monarch in H1 8.7% 8.3% 7.6% 6.9% 5.7% 4.9% 4.2% 3.6% 2017 2018 2017 2018 2017 2018 2017 2018 Capacity change total SH Market Competitors on easyJet markets Capacity Change easyJet markets easy
Slide 6: Winning network strategy
winning network strategy Purposeful investment Protect the profitable core + Capture the national opportunity in France Disciplined use of capital Target investment in key cities + Efficient basing Well positioned in a dynamic market 6
Slide 7: easyJet growth in 2018
easyJet growth in 2018 c.6% easyJet capacity growth in 2018* XXm 2018 growth (seats / %) UK X% 1.3m 5% Netherlands Switzerland 0.2m 0.5m 5% 6% Germany France (0.2)m 0.8m (5%) 7% Italy Spain 0.9m 0.4m 9% 5% * Not including growth from Air Berlin transaction 7
Slide 8: Driving revenue - customer & digital initiatives
Driving revenue - customer & digital initiatives PERSONALISED BUYING COMMERCIALISED PERSONALISED PRODUCT CONNECTED DIGITAL / INFLIGHT EXPERIENCE CUSTOMER JOURNEY AND OFFERS PEOPLE EXPERIENCE • Recognising customer to • 23m app downloads • Allocated seat • Empowering our people • Worldwide tailor con
Slide 9: Strong ancillary revenue performance
strong ancillary revenue performance Partner Extending across the travel value chain Ancillary revenue performance Old FY14-17 (£m) “non-seat” Inflight definition World class retail offer with brands you love Product* £986m Targeted options aligned to customer needs Extended £837m “ancillary Tariff
Slide 10: Relentless focus on cost
Relentless focus on cost CPS ex fuel target: flat 2015 vs 2019* Lean delivers sustainable savings** 400 85 Lean programme offsets inflation 95 Efficient and effective cost base 46 32 43 2015 CPS 2019 CPS (ex Fuel @ cc)* (ex Fuel @ cc)* 41 58 2011 2012 2013 2014 2015 2016 2017 2011-17 * Flat headline
Slide 11: Delivering operational improvements
delivering operational improvements Focus on operational performance Delivering step change improvements FY 2017 Cancellations LGW H2 OTP Decreased +4.5 ppts by 19% FY 2017 EU261 H2 delays over 3hrs events Decreased Down by 238 3.4% "easyJet has been a real driving force, working with us to help cre
Slide 12: easyJet Europe
Easyjet Europe > easyJet Europe established in July > easyJet now has three airlines. One based in the UK, Switzerland and Austria • All owned by easyJet plc which itself will be EU owned and controlled, listed on the London Stock Exchange and based in the UK > Above 50% EU (non-UK) ownership requir
Slide 13: Sustainable business model
Sustainable business model 60 million £400m in returning easyJet Lean Focused on Our Customers passengers savings Winning Network Strategy 23 million app 279 aircraft downloads Relentless Focus on Cost Continuing to Innovate 97.6% touch 97% crew No1 or No2 attendance Strong Balance Sheet airports Co
Slide 14: Financial review
Financial review Andrew Findlay- Chief Financial Officer
Slide 15: Key performance indicators
Key performance indicators FY 2017 FY 2016* Change** Seats flown (m) 86.7 79.9 8.5% Passengers (m) 80.2 73.1 9.7% Load factor (%) 92.6% 91.6% +1ppt Average sector length (km) 1,105 1,098 0.6% Revenue per seat - reported currency (£) 58.23 58.46 (0.4%) Revenue per seat - constant currency (£) 55.83 5
Slide 16: Financial performance
Financial performance FY 2017 FY 2016* Change** £m £m Total revenue 5,047 4,669 8.1% Headline costs: Headline costs excluding fuel (3,577) (3,061) (16.9%) Fuel (1,062) (1,114) 4.7% Headline profit before tax 408 494 £(86) m Headline profit before tax at constant currency 509 494 £15 m Non-headline i
Slide 17: Revenue performance
Revenue performance -4.5% £58.46 (5.3%) £3.10 +0.3% +0.1% +0.4% £55.83 £0.16 £0.08 £0.23 FY16 Passenger First Bag Allocated Seating Other FY17 @ PYCC Improving trend in Passenger RPS Strong ancillary performamce in 2017 (adjusted for Easter) 4.5% Ancillary RPS -6.1% Total Passenger RPS RPS -9.5% -4.
Slide 18: A strong focus on costs
A strong focus on costs Headline cost per seat bridge • Total headline cost per seat at constant currency: 4.4% decrease • Headline cost per seat ex fuel at constant currency: 0.9% increase 3.56 53.52 0.22 0.23 0.26 0.95 0.34 0.26 52.64 2.68 52.28 0.46 51.92 FY 2016 Regulated Inflation Ownership A32
Slide 19: Impact of fuel & currency
Impact of fuel & currency FY 2017 fuel impact FY 2017 FY 2016 Change* Fuel $ per metric tonne Market rate 501 415 (86) Effective price 596 754 158 US dollar rate Market rate 1.27 1.41 (14 cents) Effective price 1.45 1.57 (12 cents) Difference between market rate and effective rate 0.18 0.16 Actual c
Slide 20: Strong cash generation
Strong cash generation Cash flow bridge • Net cash: £357m (FY16: £213m) • Adjusted net debt: £413m (FY16 restated: £424m)* Cash generated from operations (post tax): £898m Investing and financing 224 630 325 25 51 214 115 1,653 195 404 10 21 3 1,328 969 Cash & MMDs Operating Depn & amort Net working
Slide 21: Strong balance sheet
Strong balance sheet £m FY 2017 FY 2016* Goodwill and other intangible assets 544 517 Property, plant and equipment 3,525 3,252 Derivative financial instruments 92 98 Other assets (excluding cash and money market deposits) 348 324 Unearned revenue (727) (568) Other liabilities (excluding debt) (1,33
Slide 22: Utilising flexibility in fleet planning
Utilising flexibility in fleet planning Planned Fleet Size Maximum Fleet Size using existing assets Fleet plan as at 30 Sept 2017 Fleet Size with exercise of deferral options and all operating leases returned at maturity easyJet Orderbook Delivery Schedule (Amendment #5) Fleet Size with exercise of
Slide 23: Gross capital expenditure
Gross capital expenditure £1,200m • Incremental capex in FY18 £1,000m & FY19 driven by £900m replacement expenditure • Four A321 deliveries £630m moved into FY 18 • Maintenance capex is projected to remain relatively stable over the next 3 years FY’17 FY’18 FY’19 FY’20 • Revised Capex spend updated
Slide 24: H1 forward bookings
H1 forward bookings 93% 90% Last Year 86% 83% This Year 59% 59% 52% 50% 31% 32% 22% 18% 16% 12% Oct Nov Dec Jan Feb Mar H1 H1 2018 (October 2017 to March 2018) as at XX November 2017 24
Slide 25: Purposeful investment: Air Berlin asset acquisition
Purposeful investment Air Berlin asset acquisition
Slide 26: Deal highlights
DEAL HIGHLIGHTS > easyJet has reached a binding agreement to acquire part of Air Berlin operations at Berlin Tegel airport, subject to antitrust clearance and regulatory approval • easyJet will operate up to 25 A320 family aircraft > Consideration of €40m payable in cash upon completion • Completion
Slide 27: Tegel fleet plan
Tegel fleet plan Tegel fleet plan by month Wet lease easyJet (2018) Winter Summer Shoulder Summer Peak easyjet is a combination of existing fleet and crew to be reallocated to TXL and conversion of AB aircraft and crew Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov (steady state) 27
Slide 28: Delivering returns in strong market positions
Delivering returns in strong market positions Being number 1 delivers returns #1 positions Superior product #2 Returns > widest range of routes > best frequencies / times Other > strongest brand awareness Cost advantage > Leverage scale on airport fees > procurement of ground handling > economies of
Slide 29: Delivering superior market positions
DELIVERING SUPERIOR MARKET POSITIONS Total Berlin Capacity* (m seats) Eurowings 16.0 10.7 5.5 5.9 Seats at SXF 5.3 1.6 (5.8m) 1.1 0.8 0.7 easyJet Lufthansa Group Ryanair AF-KLM IAG Norwegian Turkish Airport Positions Total Berlin #1 #2 #3 #4 #5 #6 #7 • FY 2017 OAG data adjusted for transaction: • Ai
Slide 30: Expected timing
EXPECTED TIMING > Antitrust clearance, regulatory approval and closing expected in December 2017 > First flight out of Tegel planned for early January > Update on implementation at Q1 30
Slide 31: PBT accretive from 2019 onwards
PBT accretive from 2019 onwards Air Berlin perimeter Headline Impact 2018 • Flying a partial winter schedule Load factor: below average Revenue RPS: below average • Uncertain on competitors schedules • Lower load factor / build demand • Wet lease aircraft required to fly initial schedule as Cost Hig
Slide 32: Positive FY'18 underlying trading
Positive FY’18 Underlying trading Current easyJet PBT consensus FY’18 £465m Based on input from 27 analysts Includes one off benefits from capacity decreases H1 Trading vs consensus c. +£55m post Monarch / Air Berlin administration and operational issues at Ryanair Consensus post H1 trading upside £
Slide 33: Fuel and foreign exchange hedging
Fuel and foreign exchange hedging Fuel requirement US dollar requirement Euro Surplus Six months to 30 March 2018 82% @ $512/tonne 80% @ $1.36/£ 71% @ €1.25/£ Full year ending 30 September 75% @ $514/tonne 73% @ $1.36/£ 73% @ €1.24/£ 2018 Full year ending 30 September 45% @ $533/tonne 47% @ $1.30/£
Slide 34: 2018 headline outlook – excluding Air Berlin
2018 headline Outlook – excluding Air Berlin Capacity (seats flown) • FY c.+6% increase Revenue per seat at constant currency • Q1 / H1 2018 revenue per seat low to mid single digits positive Cost per seat at constant currency • FY headline cost per seat excluding fuel: up to 1% increase (assuming n
Slide 35: Summary
Summary > 2017 performance has been robust in a low yield environment > Positive revenue per seat momentum - easyJet is winning in the market > Leading the way in customer initiatives to drive loyalty and ancillary revenue > Strong cost performance delivered > Continued focus to improve On-time Perf
Slide 36: Q&A
Q&A easyJet
Slide 37: Appendix
appendix
Slide 38: Profit after tax
Profit after tax £m FY 2017 FY 2016* Change** Headline profit before tax 408 494 (17.3%) Headline tax charge (83) (67) (24.2%) Headline profit after tax 325 427 (23.9%) Total profit before tax 385 507 (24.0%) Total tax charge (80) (70) (14.8%) Total profit after tax 305 437 (30.2%) Effective tax rat
Slide 39: Revenue per seat
Revenue per seat £ per seat FY 2017 FY 2016 Change* Seat revenue includes all revenue except for commissions earned from goods and/or services sold on behalf of partners. Seat revenue 57.20 57.43 (0.4%) Non-seat revenue arises from commissions earned from goods and/or services sold on behalf of part
Slide 40: H2 performance
H2 Performance Reported £m H2 2017 H2 2016* Change** Total revenue 3,220 2,898 11.1% Fuel (603) (652) 7.6% Headline operating costs excluding fuel (1,830) (1,593) (15.0%) Headline EBITDAR 787 653 20.4% Headline ownership costs (167) (138) (20.6%) Headline profit before tax 620 515 20.4% Headline PBT
Slide 41: Headline CPS excluding fuel – key drivers
Headline CPS excluding fuel – key drivers Cost per seat Variance to prior Variance to prior Weighted variance excluding year at constant year at constant at constant Drivers fuel currency* currency* currency* £ £ % £ Navigation 4.40 0.16 4.0% 0.4% • Price benefits in France and Germany • Upgauging o
Slide 42: Increasing proportion of A320's
Increasing proportion of A320’s FY 2017 FY 2016 Change A319 (operating lease) 54 45 9 A319 (owned / finance lease) 89 99 (10) A319 Total 143 144 (1) A320 (operating lease) 18 18 - A320 (owned / finance lease) 118 95 23 A320 Total 136 113 23 Total fleet 279 257 22 Operating lease 26% 25% 1ppt Number
Slide 43: Non-headline items
Non-headline items FY 2017 FY 2016 Change* Description £m £m £m The sale and leaseback of the Group’s 10 oldest A319 aircraft resulted in Sale and leaseback charge (16) - (16) a loss on disposal of the assets of £10 million and a £6 million maintenance provision catch up. The programme involves redu
Slide 44: Currency impact
Currency impact Revenue Costs FY 2017 FY 2016 FY 2017 FY 2016 Sterling 46% 50% 30% 27% Euro 41% 39% 37% 35% US dollar 1% 1% 26% 32% Other (principally Swiss franc) 12% 10% 7% 6% Average effective Euro rate for revenue for FY 2017 was €1.19 (FY 2016: €1.28) Average effective Euro rate for costs for F
Slide 45: ROCE calculation
ROCE calculation Reported £m FY 2017 FY 2016* Earnings before interest and tax – reported 404 511 Interest element of operating lease payments 37 30 Earnings before interest and tax - adjusted 441 541 Tax 19% 20% Normalised operating profit after tax (NOPAT) 357 433 Average shareholders’ equity – re
Slide 46: Headline ROCE calculation
Headline ROCE calculation Reported £m FY 2017 FY 2016* Headline earnings before interest and tax – reported 428 504 Interest element of operating lease payments 37 30 Headline earnings before interest and tax - adjusted 465 534 Tax 19% 20% Normalised headline operating profit after tax (NOPAT) 376 4