Slide 1: Full Year 2019 Results Presentation
easyJet FULL YEAR 2019 RESULTS PRESENTATION
Slide 2: Introduction
introduction Johan Lundgren - CEO
Slide 3: Strong Summer performance
Strong Summer performance 2019 Customer / Industry awards > FY 2019 headline PBT of £427m, upper end of guidance > Delivered a record H2 headline profit > H2 RPS, out performance vs guidance 2019 Best short-haul airline 2019 Best business airline > FY CPS ex fuel in line with guidance > Self help in
Slide 4: Financial review
Financial review Andrew Findlay - CFO
Slide 5: FY 2019 performance highlights
FY 2019 performance HIGHLIGHTS FY 2019 FY 2018 Change* Seats flown (m) 105.0 95.2 10.3% Passengers (m) 96.1 88.5 8.6% Load factor (%) 91.5% 92.9% (1.4)ppt Average sector length (km) 1,105 1,101 0.4% Revenue per seat - reported currency (£) 60.81 61.94 (1.8%) Revenue per seat - constant currency (£)
Slide 6: H2 2019 performance highlights
H2 2019 performance HIGHLIGHTS H2 2019 H2 2018 Change* Seats flown (m) 58.8 54.9 7.2% Passengers (m) 54.4 51.7 5.2% Load factor (%) 92.5% 94.2% (1.7)ppt Average sector length (km) 1,134 1,123 1.0% Revenue per seat - reported currency (£) 68.74 67.71 1.5% Revenue per seat - constant currency (£) 68.2
Slide 7: Financial performance
Financial performance FY 2019 FY 2018 Change* £m £m Total revenue 6,385 5,898 487 Headline costs: Headline costs excluding fuel (4,542) (4,136) (406) Fuel (1,416) (1,184) (232) Headline profit before tax 427 578 (151) Headline ROCE** 11.4% 14.6% (3.2)ppt Headline diluted EPS (pence) 87.8p 117.4p (29
Slide 8: Revenue performance
Revenue performance Revenue per seat bridge Reported RPS = (1.8%) (2.4%) RPS @ CC =(2.7%) (£1.49) (1.06) £61.94 £60.81 £0.53 (0.4%) (0.98) (£0.22) (0.5%) +0.5% £60.28 +0.1% £0.05 (£0.33) £0.33 FY 2018 Monarch/ Ryanair Impact from Seasonality Underlying H1 Underlying H2 FY 2019 @ CC FX FY 2019 Report
Slide 9: Costs
costs Headline cost per seat bridge Reported CPS = (1.5%) Headline CPS ex fuel @ CC = 0.8% (£0.36) £0.32 (£0.66) £56.74 £0.52 (£0.23) (£0.21) (£0.22) £0.39 (£0.53) £56.08 £55.87 £0.11 £55.55 Movement before IFRS impact FY 2018 Airports & Ownership Crew Maintenance Navigation Disruption Overheads Imp
Slide 10: Impact of fuel & currency
Impact of fuel & currency FY 2019 fuel impact FY 2019 FY 2018 Change* Fuel $ per metric tonne Market price 652 664 12 Effective price 604 590 (14) US dollar rate Market price 1.27 1.34 (7) cents Effective price 1.32 1.36 (4) cents Difference 0.05 0.02 Actual cost of fuel £ per metric tonne 458 434 (
Slide 11: Strong cash generation
Strong cash generation Cash flow bridge > Net (debt)/ cash: £(326)m (FY’18: £396m) > Adjusted net debt:** £326m (FY’18: £738m) Cash generated from operations Investing and financing (excluding dividends): £1,098m 443 118 15 499 121 58 2,180 233 466 984 45 1,576 174 1,373 55 Cash & MMDs Operating Dep
Slide 12: Strong balance sheet BAA1 / BBB+
Strong balance sheet BAA1 / BBB+ 30 September 2018 £m 30 September 2019 (restated) Change Goodwill and other intangible assets 561 546 15 Property, plant and equipment (excluding RoU assets) 4,661 4,140 521 RoU assets under IFRS 16 502 - 502 Derivative financial instruments 63 364 (301) Equity inves
Slide 13: Utilising flexibility in fleet planning
Utilising flexibility in fleet planning Updated fleet plan 400 Max fleet plan > Deferral of contracted delivery months for 12 aircraft: 383 Moving from expected delivery in 2021 to dates in 380 2023+ 365 > The exercise of 12 purchase options, guaranteeing our 361 firm delivery positions in 2024 360
Slide 14: Gross capital cashflows
Gross capital cashflows Growth Replacement & Owned Maintenance £1,350m New IFRS Stds Other £1,200m £1,100m £950m FY'20 FY'21 FY'22 FY'23 14
Slide 15: H1 capacity outlook
H1 capacity outlook 14.5% H1 FY19 H1 FY20 6.9% 5.4% 3.6% 1.7% 0.7% 0.8% 0.4% Capacity change total short Competitors on Capacity change easyJet capacity change haul market easyJet markets easyJet markets 15 H1 2020 (Oct 2019 to Mar 2020) as at 15 Nov 2019
Slide 16: Forward bookings
forward bookings 91% 92% 2018 2019 82% 80% 76% 77% 53% 55% 49% 51% 21% 23% Oct Nov Dec Q1 Q2 H1 16 H1 2020 (Oct 2019 to Mar 2020) as at 15 Nov 2019
Slide 17: Fuel and foreign exchange hedging
Fuel and foreign exchange hedging Fuel requirement US dollar requirement Euro Surplus Six months to 31 March 2020 74% @ $632/MT 70% @ 1.36 68% @ 1.11 Full year ending 30 September 2020 68% @ $655/MT 66% @ 1.36 67% @ 1.11 Full year ending 30 September 2021 45% @ $643/MT 46% @ 1.31 52% @ 1.10 17 Opera
Slide 18: Outlook
Outlook Capacity (seats flown) FX / Fuel* > H1 c. 1.7% increase > FY: c.£40 million positive movement from > FY c. 3% increase foreign exchange rates on headline PBT > £10m of this positive movement is part of the total fuel Revenue per seat at constant currency bill > H1 revenue per seat performanc
Slide 19: CEO update
Ceo update Johan Lundgren
Slide 20: EU airline industry first mover
EU airline industry First mover FIRST MOVER - The next phase Data driven easyJet holidays Investing in operational resilience Net zero carbon 20
Slide 21: Our plan – delivering our strategy
Our plan – delivering our strategy Seamlessly connecting Europe with the warmest welcome in the sky #1 or #2 in Winning our Value by Innovating The right primary customers’ efficiency with data people airports loyalty Maximise Maximise Generate sustainable positive PBT/ seat ROCE cash flows 21
Slide 22: #1 or #2 in primary airports
#1 or #2 in primary airports Increasing No #1 and #2 positions Delivering higher returns – AMS airport across the network No. 2 Seats RPS No. 1 Capacity (seats) Revenue per seat Seats flown (mils) Base Increased by launch 55% since 2012 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 2012 2013 2014 2015 201
Slide 23: Winning our customers' loyalty
Winning our customers’ loyalty easyJet brand getting stronger First choice Brand brand* Affinity* +4ppts +5ppts +2ppts +4ppts +3ppts +3ppts +3ppts +5ppts +1ppts +1ppts +2ppts +3ppts Highest score ever * FY 2019 vs FY 2018 23 Source: Millward Brown
Slide 24: Value by efficiency
Value by efficiency Functioning programmes across the entire operation Strategic cost Operational Fleet reduction resilience programme programme programme Efficiency and cost Standby aircraft reduction projects Fleet up-gauging Schedule refinement efficiency for each cost line Strategic FX and fuel
Slide 25: Operational resilience – delivering results in 2019
Operational resilience – delivering results in 2019 Disruption events decline Disruption costs decline 200.0 Welfare FY’19 vs FY’18 180.0 Comp £178m ATC Delay Minutes 160.0 Cancelations 46% reduction £141m 140.0 120.0 £117m 3 hour delays 24% reduction 100.0 80.0 £76m Total events 30% reduction 60.0
Slide 26: Innovating with data – operational resilience
Innovating with data – operational resilience 1 OTP SIMULATOR > On-the-day simulation of each line of flying, to predict issues before they occur and enable proactive action to be taken 2 CREWING ANALYSER > Assessment of crew allocations that frequently cause problems, proactively re- planning to av
Slide 27: Innovating with data - late yield initiatives
Innovating with data - late yield initiatives YoY change in late yield curve YoY change in yield in final 7 days to departure, (example of a UK outbound flight in September) August and September by market (2019 vs 2018) August – 7 days to departure 2019 September – 7 days to departure Average daily
Slide 28: The right people
The right people Industry experts strengthen the team The right place to work Overall engagement Garry Wilson score High retention CEO easyJet holidays 8/10 6% - total turnover eNPS* 5% - Cabin crew turnover Sam Kini Chief Data & Information Officer 23 6% - pilot turnover Key skills acquired for hol
Slide 29: Announcements
Announcements
Slide 30: The Opportunity Investing in easyJet holidays
The Opportunity Investing in easyJet holidays > Set up a separate business and reporting 20m structure People who flew with easyJet for leisure and booked accommodation elsewhere > Attracted market leading, top end industry experience Market leading Brand Loyalty Leading network for beach > Clarity
Slide 31: Famously flexible
Famously flexible > Across entire easyJet network > More flexible holiday durations and times > More weekend flying than any other airline 31
Slide 32: Europe's most loved hotels
EUROPE’S MOST LOVED HOTELS > Handpicked hotels including over 500 direct hotel contracts > Curated by local industry experts > With a focus on quality 32
Slide 33: Innovating through tech
Innovating through tech > Best in class technology, easily and quickly scaleable > Newest website on the market, focusing on ease of use and inspiration > Single customer log-in for easyJet and easyJet holidays 33
Slide 34: Holidays for everyone (value)
HOLIDAYS FOR EVERYONE (VALUE) > Leveraging easyJet’s cost base > Focus on customer value > Maximising easyJet customer base and trusted brand 34
Slide 35: What's coming
WHAT’s Coming > Before Christmas Website launch in UK, followed by marketing campaign > 6th Jan First holiday customers depart > Spring 2020 Winter 20/21 holidays on sale > Spring 2020 Summer 21 holidays on sale > 2020 Rollout to next market > Ongoing digital, data and yield improvements 35
Slide 36: Play short video
Play Short video – which runs through: • Website look and feel • Booking process • The end to end customer journey with easyJet Holidays 36
Slide 37: Aviation impact on the environment
Aviation impact on the environment Carbon emissions by industry* easyJet One of the most efficient in Europe Electricity and heat -33.7% production 2% 0% 1% 120 2% Industrial 110 2.8% CO2 per RPK 100 Residential 90 7% Commercial and public 80 77.07 services 70 Passenger road 60 11% 41% vehicles 50 R
Slide 38: The world's first major airline to operate net-zero carbon flights
The world’s first major airline to operate net-zero carbon flights * > First major international airline to offset all carbon emissions Industry leading on behalf of customers Differentiated position > On all flights across the network > Beginning 19 November 2019 > Offset schemes accredited to high
Slide 39: De-carbonising aviation
De-carbonising aviation Conventional Advanced Hybrid Full Carbon Carbon Electric Electric Offsets Offsets Aircraft Aircraft Forestry, energy Improved SAFs and Direct ~200 seat ~200 seat efficiency and clean Air Carbon Capture narrowbody with narrowbody with energy generation (DACCS) commercially up
Slide 40: Delivering shareholder value
delivering shareholder value #1 or #2 in Winning our customers’ Value by Innovating The right primary loyalty efficiency with data people airports Delivering shareholder value Maximise Maximise Generate sustainable positive PBT/ seat ROCE cash flows 40
Slide 41: Q&A
Q&A
Slide 42: Appendix
Appendix
Slide 43: Brexit ready
Brexit ready > Structure and flying rights: > Ownership: > Operations – Robust solutions: • c. 50% EEA ownership at present • Safety and regulatory – grace period on safety > Consumer demand: certificates and spare parts • UK demand remains strong – H1 2020 bookings • People: ahead of last year Pi
Slide 44: Profit after tax
PROFIT after tax 2019 pre IFRS 2019 as IFRS Impact 2018 Change* Changes reported £m £m £m £m £m Headline profit before tax 424 3 427 578 (151) Headline tax charge (78) - (78) (112) 34 Non-Headline items 18 (15) 3 (133) 136 Non-Headline tax (charge)/ credit (3) - (3) 25 (28) Total profit after tax 36
Slide 45: EPS, dividends and ROCE
EPS, DIVIDENDS AND ROCE FY 2019 FY 2018 (restated) Change* Headline basic earnings per share (pence) 88.7 118.3 (25%) Headline diluted earnings per share (pence) 87.8 117.4 (25%) Total basic earnings per share (pence) 88.6 90.9 (3%) Total diluted earnings per share (pence) 87.8 90.2 (3%) Dividend pe
Slide 46: Revenue total and per seat
Revenue Total and Per Seat Total Total reported 2019 2018 Change* Passenger revenue 5,009 4,688 6.9% Ancillary revenue 1,376 1,210 13.7% Total revenue 6,385 5,898 8.3% Total £ per seat reported 2019 2018 Change* Passenger revenue 47.71 49.23 (3.1)% Ancillary revenue 13.10 12.71 3.1% Total revenue 60
Slide 47: Headline cost per seat
headline COST PER SEATCost per seat Variance at Variance at Weighted variance at Pre-IFRS variance at excluding constant constant constant constant currency Drivers fuel currency* currency* currency* £ £ £ % % > Structural cost programme savings offset by price increases in regulated and non-regulat
Slide 48: Non-headline items
Non-headline items 2019 2018 Description £m £m The sale and leaseback of 10 A319 aircraft in FY’19 resulted in a gain on disposal of the assets of £2 million. In FY’18 there was an £11m loss on disposal plus an £8 Sale and leaseback 2 (19) million maintenance provision catch up (under the pre-IFRS 1
Slide 49: Currency impact
Currency impact Revenue Costs FY 2019 FY 2018 FY 2019 FY 2018 Sterling 43% 45% 30% 29% Euro 46% 44% 38% 39% US dollar 1% 1% 26% 26% Other (principally Swiss franc) 10% 10% 6% 6% 49 Average effective Euro rate for revenue for FY 2019 was €1.13 (FY 2018: €1.15) Average effective Euro rate for costs fo
Slide 50: Impact of IFRS 15&16 on income statement
Impact of IFRS 15&16 on income statement 2019* Description £m IFRS 15: Deferral of revenue to FY’20 and compensation payments offset against revenue (23) IFRS 15: Reclassification of compensation costs 18 Total IFRS 15 pre tax profit impact on FY’19 (5) IFRS 16: Reduction of airports and ground hand
Slide 51: Increasing proportion of A320's
Increasing proportion of A320’s 2019 2018 Change A319 (Leased) 56 53 3 A319 (owned) 69 79 (10) A319 Total 125 132 (7) A320 (Leased) 43 42 1 A320 (owned) 157 139 18 A320 Total 200 181 19 A321 (owned/Total) 6 2 4 Total fleet 331 315 16 Leased 99 95 4 Number unencumbered 232 220 12 Percentage of A320's
Slide 52: Return on capital employed
Return on capital employed 2019 2019 as 2018 (restated) £m Pre-IFRS adoption reported Headline profit before interest and tax 440 466 595 Interest element of operating lease payments 62 - 51 Headline profit before interest and tax – adjusted 502 466 646 UK corporation tax rate 19% 19% 19% Normalised
Slide 53: 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 54: 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. Operating lease costs previously recognised within the Income St
Slide 55: Adoption of IFRS 9
Adoption of IFRS 9 Change in accounting: > Some changes have been applied to the classification and measurement of financial instruments. Equity investments are required to be fair valued. > easyJet does not have a material impact from changes to hedge accounting requirements or impairment due to th
Slide 56: Q4 Passenger statistics
Q4 Passenger statistics July 2019 2018 Change Passengers 9,469,781 9,122,137 3.8% Load Factor 94.3% 96.4% -2.1ppt August 2019 2018 Change Passengers 9,578,600 9,327,582 2.7% Load Factor 94.3% 95.8% -1.5ppt September 2019 2018 Change Passengers 8,972,901 8,816,427 1.8% Load Factor 91.4% 92.8% -1.4ppt