easyJet plc · LSE:EZJ
easyJet — Investor Presentation (March 2013)
30 slides from easyJet's investor presentation, March 2013
Slide 1: Company background
COMPANY EYNG@NGINGIEN D)
Slide 2: Europe's leading short haul air travel network
Europe's leading short haul air travel network • 58.4m passengers, 65.9 m seats flown; load factors 88.7% • fleet of 214 aircraft with an average fleet age of 4.4 years • leading presence on Europe’s top 100 routes • operates on over 605 routes across more than 30 countries • strong position in key
Slide 3: Strong track record of delivery
Strong track record of delivery Industry leading on-time performance(1) Excellent customer satisfaction (2) 89% 87% 87% 87% 82% 82% 84% 85% 79% 80% 82% 83% 80% 80% 76% 77% 77% 76% FY'11 FY'12 FY'11 FY'12 FY'11 FY'12 FY'11 FY'12 KLM Lufthansa Air France British Airways Ryanair easyJet Overall Satisfa
Slide 4: Headwinds for European aviation – but growth expected
Headwinds for European aviation – but growth expected Headwinds Annual number of flights (m) Intra-European flying volume(1) • Austerity measures 9.0 • Slowing economic growth 8.5 • Industrial unrest 8.0 • High fuel costs • Increased taxation on 7.5 High Low aviation Base • Rising costs at regulated
Slide 5: Unique structural opportunity for easyJet
Unique structural opportunity for easyJet Capacity growth H1 ‘ F’13 (OAG) Competitors - on EZJ routes H1 capacity YOY Chg 11% easyJet change Competitors on -1.8% 9% EZJ routes 6% Competitors in -3.6% 4% 4% total market 3% easyJet +3.6% UK France Swiss Italy Spain Market -1% -1% -2% -6% -6% -8% Key t
Slide 6: Continued structural advantage against legacies
Continued structural advantage against legacies On-going cost advantage Market share – EZJ vs legacy carriers '05 vs'12 against legacies and charter Market share - EZJvs legacy carriers '05 vs'12 airlines UK vs. BA France vs. AF Switzerland vs. Swiss Italy vs. Alitalia • Seat density 61% • Load fact
Slide 7: Winning against low-cost competition
Winning against low-cost competition • Strength of network Presence in top 100 market pairs 60 • Pan-European network 50 3 Non primary airports and market presence Primary airports 40 14 2 • No. 1 or 2 positions at 30 2 primary airports 20 46 34 24 26 • 23 Peak slots 10 19 18 17 14 13 - 3 • Strong b
Slide 8: Strategy to drive growth and returns
Strategy to drive growth and returns Leverage easyJet’s cost advantage, leading market positions and brand to deliver point-to-point low fares with operational efficiency and friendly service for our customers 1. Build strong number 1 and • Sustainable growth 2 network positions • (slightly in exces
Slide 9: Build strong number 1 & 2 network positions
1. Network Build strong number 1 & 2 network positions positions Building strong number 1 or 2 positions at major airports(1) Airport Share Position London Gatwick 46% No.1 Geneva 38% No.1 Milan Malpensa 37% No.1 Paris Orly 13% No.2 Lisbon 13% No.2 Paris CDG 11% No.2 Amsterdam 10% No.2 • Highest ret
Slide 10: Slot position at key airports
1. Slot position at key airports Network positions Percentage of capacity in Level 3 Summer ‘12 Gatwick departures co-ordinated airports 0600-0855 80% 70% Others, 6% 70% easyJet, 45% Aer Lingus, 4% 60% 50% Flybe, 6% 41% 40% Thomas Cook, 30% 6% 20% Monarch, 7% 10% 0% Thomson, 11% British easyJet Ryan
Slide 11: Aircraft utilisation – hours flown per day
2. Efficient cost base Cost Advantage 9 Cost per ASK 8 easyJet building on cost position 7 • Cost advantage in the airports 6 5 we fly to 4 • High asset utilisation 3 2 • easyJet lean embedded 1 0 • Airbus framework agreement EZJ RYA IAG AF-KLM LHA delivers cost benefit Asset utilisation vs. sector
Slide 12: Maintain cost advantage: easyJet lean
2. Maintain cost advantage: easyJet lean Cost Advantage F’13 target areas Targeting an additional £35m in FY’13 c.£5m c.£135m • Optimise turn-time further c.£11m • Further optimise Ground Operations contracts and costs c.£6m • Opportunities from mini-base c.£13m openings • Merchant acquisition fees
Slide 13: Strength in digital Sales
3. Strength in digital Sales Drive Demand Attract Customers Improve Conversion & Make the most of Digital Reach existing Customers & • Create a brand that people • Focus on conversion Prospects know, like & understand • Optimise & Personalise • Customer segmentation • Increase likelihood to fly with
Slide 14: Progressing Business initiative
3. Drive Progressing Business initiative Drive Demand Demand Building blocks being put in place • Business routes added to network • Partnerships with Global Distribution System providers (GDS) • Agreements with Travel Management Companies (TMC) • Large scale customers signed • In-country Sales team
Slide 15: Clear set of financial objectives
4. Capital Clear set of financial objectives Discipline Objectives Measures Progress Return • Earn returns in excess of cost of • Improve PBT per seat to GBP5 PBT improved by 84p to £4.81 Targets capital through the cycle • Post tax ROCE of 12% through the ROCE of 14.5%(1) • Invest in growth opp
Slide 16: Rigorous capital allocation process
4. Capital Rigorous capital allocation process Discipline • Set strategic direction • Focus markets Strategic • Scenario planning Plan • Portfolio review of network performance • Asset allocation • ROCE performance by route vs. budget Weekly route Capital management • Competitor activity meeting • P
Slide 17: Flexibility in fleet plan
4. Flexibility in fleet plan Capital Discipline Current fleet flexibility • Significant increase in age of fleet post 2018 without a new fleet order • Key objective is to retain flexibility in new framework order Maximum fleet - Lease extensions; options exercised Minimum fleet - Early termination o
Slide 18: Disciplined use of capital
4. Disciplined use of capital Capital Discipline Routes > 3yrs FY12 route performance Routes < 3yrs ROCE 12% Improved returns year on year Returns FY11 FY12 12% ROCE Routes Rigorous approach to capital allocation embedded throughout easyJet ROCE for this analysis defined as normalised profit after t
Slide 19: Investing in returns and growth
4. Investing in returns and growth Capital Discipline Relative attractiveness vs. returns of major network points Liv’pool Attractiveness rating Madrid FY Returns (Network touching)* Framework for evaluating network • Reallocated capacity to higher returns and growth opportunities e.g. France and It
Slide 20: Recent financial information
Recent financial information 20
Slide 21: FY'12: P&L
FY’12: P&L £m F ’12 F ’11 Change Total revenue 3,854 3,452 11.6% Fuel (1,149) (917) (25.3)% Operating costs excluding fuel (2,174) (2,067) (5.1)% EBITDAR 531 468 13.5% Ownership costs (214) (220) 2.7% Profit before tax 317 248 27.9% PBT margin 8.2% 7.2% 1.0 ppt 21
Slide 22: FY'12: Financial results
FY’12: Financial results £m F ’12 F ’11 Change Profit before tax 317 248 27.9% Tax charge (62) (23) (169.6)% Profit after tax 255 225 13.3% Effective tax rate 19.6% 9.3% (10.4) ppt Earnings per share 62.5p 52.5p 19.0% Ordinary dividend per share 21.5p 10.5p 104.8% Special dividend per share - 34.9p
Slide 23: FY'12: Cost per seat excluding fuel - key drivers
FY’12: Cost per seat excluding fuel - key drivers Cost per Reported Constant Movement versus F‘11 Drivers seat (£) currency Ground Operations 14.49 -2.1% +1.6% • Significant increases in charges in Spain and Italy partially offset by relatively benign winter. Crew 6.55 +0.6% +2.8% • Average 2% incre
Slide 24: FY'12: Strong balance sheet
FY’12: Strong balance sheet £m Sep ‘12 Sep ‘11 Property, plant and equipment 2,395 2,149 Goodwill and other intangible assets 456 451 Other assets 561 469 Liabilities (excluding debt) (1,544) (1,464) 1,868 1,605 Debt 957 1,300 Cash and money market deposits (883) (1,400) Net debt / (cash) 74 (100) S
Slide 25: FY'12: Cashflow
FY’12: Cashflow 45 28 109 46 389 331 £m 1,400 364 150 25 883 Sep 2011 * Operating Depn & Net Working Tax, net Ordinary CAPEX Financing Special FX Sep 2012 * Profit amort Capital int & other dividend dividend paid paid * Includes money market deposits but excludes restricted cash 25
Slide 26: Outlook and recent trends
Outlook and recent trends 26
Slide 27: Q1 IMS: Hedging update
Q1 IMS: Hedging update Fuel US dollar Euro requirement requirement surplus Half year ending 31 March 2013 86% at $986/tonne 86% at $1.61/£ 80% at €1.18/£ Full year ending 30 September 2013 78% at $985/tonne 82% at $1.60/£ 75% at €1.18/£ Full year ending 30 September 2014 55% at $993/tonne 62% at $1.
Slide 28: Q1 IMS: Outlook
Q1 IMS: Outlook Capacity (seats flown) • FY c.+3.5% (before disruption) • H1 c.+3.5% (before disruption) Revenue per seat (constant currency) • H1 up 6-8% (assuming normal disruption levels) Cost per seat ex fuel (constant currency) • FY c.+3 to 4% (assuming normal disruption levels) • H1 c.+3.5 to
Slide 29: Investor relations contacts
Investor relations contacts Rachel Kentleton Director of Investor Relations, Strategy and Regulatory Affairs rachel.kentleton@easyjet.com +44 (0) 7961 754 458 Tom Oliver Group Investor Relations Manager tom.oliver@easyjet.com +44 (0) 7950 996 262 Will MacLaren Group Investor Relations Manager willia
Slide 30: 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