Easyjet Plc · LSE:EZJ
Easyjet — FY2020 Earnings Presentation
41 slides from Easyjet's earnings presentation, 2020
Slide 1: easyJet FY 2020 Results Presentation
Slide 2: Introduction
introduction Johan Lundgren – CEO
Slide 3: Positioned to win
Positioned to win Raised £3.1bn in liquidity since April 2020 Strong liquidity position Year end liquidity position increased by c.£900m compared to end March 2020 Retain ownership of 55% of our fleet with 37% unencumbered Launched the largest Cost Efficiency Programme in easyJet’s history Cost cont
Slide 4: Financial review
Financial review Andrew Findlay – CFO
Slide 5: Key performance indicators FY'2020
Key performance indicators FY’2020 FY 2020 FY 2019 Change* Seats flown (m) 55.1 105.0 (47.5%) Passengers (m) 48.1 96.1 (50.0%) Load factor (%) 87.2% 91.5% (4.3)ppt Average sector length (km) 1,132 1,105 2.4% Revenue per seat - reported currency (£) 54.35 60.81 (10.6%) Revenue per seat - constant cur
Slide 6: FY'2020 KPIs
FY’2020 kpi’s Seats flown (m) Passengers (m) 50 50 42.7 38.6 40 40 30 30 20 20 12.2 9.4 10 10 0.1 0.1 0 0 H1 Q3 Q4 H1 Q3 Q4 Load factor (%) Revenue per seat (£) 100% 90.3% 88.9% 55.6 60 53.4 76.3% 50.0 80% 50 60% 40 30 40% 20 20% 10 0% 0 H1 Q3 Q4 H1 Q3 Q4 6 6
Slide 7: Financial performance
Financial performance FY 2020 FY 2019 Change* £m £m Total revenue 3,009 6,385 (3,376) Headline costs: Headline costs excluding fuel (3,123) (4,542) 1,419 Fuel (721) (1,416) 695 Headline (loss)/profit before tax (835) 427 (1,262) Headline ROCE (19.9)% 11.4% (31.3)ppts. Headline (loss)/earnings per sh
Slide 8: Revenue per seat
Revenue per seat > Trading in H1 was strongly positive > H2 trading Disciplined approach to deployment of capacity Flexible schedule planning based on changing demand environment Focused on flying which generated positive contribution Optimised pricing * H1 Underlying Trading includes underl
Slide 9: Headline cost per seat
Headline cost per seat > Higher CPS as a result of: Decreased capacity One-off maintenance provision catch-up in H1 > Offset by: Short-term cost-out action Furlough schemes Initial savings from cost reduction programme 9 * Favourable/(adverse) 9
Slide 10: Headline impact of fuel & currency
Headline Impact of fuel & currency FY 2020 headline fuel impact FY 2020 FY 2019 Change* Fuel $ per metric tonne Market price 575 652 77 Effective price 650 604 (46) US dollar rate Market price 1.29 1.27 0.02 cents Effective price 1.33 1.32 0.01 cents Difference 0.04 0.05 Actual cost of fuel £ per me
Slide 11: Cashflow – H1 & H2
Cashflow – h1 & h2 H1 net change in cash & MMD: H2 cash generated from H2 total cash burn: (£187)m financing: £2,396m (£1,425)m 588 409 306 1,399 (863) 241 2,316 472 (726) (21) (44) (362) 1,576 (174) 78 1,389 (563) Cash & MMD H1 Cash Dividend paid Capex H1 Other Cash & H2 Debt H2 proceeds Net H2 Ref
Slide 12: Balance sheet
balance sheet £m 30 September 2020 30 September 2019 Goodwill and other intangible assets 597 561 Property, plant and equipment 5,053 5,163 Derivative financial instruments (327) 63 Equity Investments 33 48 Other assets (excluding cash and money market deposits) 364 542 Unearned revenue** (614) (1,0
Slide 13: Utilising flexibility in fleet
Utilising flexibility in Fleet Current contractual Max > Current plan allows the flexibility to expand or contract depending on the demand picture at the time > This plan excludes any potential FY21 Base Plan opportunistic fleet additions, which are not included in the 302 base plan for 2021 > c.31%
Slide 14: Gross capital expenditure
Gross capital expenditure 1,400 Pre delivery New Aircraft Maintenance Guidance range payments 1,200 Lease payments Other £1,000m 1,000 £800m 800 600 £600m £600m £600m 400 200 0 FY'21 FY'22 FY'23 14
Slide 15: Fuel and foreign exchange hedging
Fuel and foreign exchange hedging Fuel Hedging and Ineffectiveness > Pre COVID-19 fuel was 71% hedged @ $654/MT for FY20 and 51% hedged for FY21 @ $638/MT > FY20 hedge ineffectiveness charge of £311m, largely driven by overhedged amounts on jet fuel and foreign exchange, due to lower than planned ca
Slide 16: CEO update
ceo update Johan Lundgren – CEO
Slide 17: Decisive action delivered
Decisive action delivered £3.1bn of liquidity raised Largest Cost Efficiency programme in easyJet’s history Restructuring programme with Union / work council agreements in the UK, Germany, Netherlands and Portugal to date Strong control of cash burn throughout H2 2020 Disciplined flying schedule dri
Slide 18: Agile response to market changes
Agile response to market changes Announcement of Canary Islands quarantine lifted on 22nd October. 876% sales increase over the next 5 days: > Added 180,000 seats within 24 hours from all UK bases > Operated additional seats within 48 hours of announcement > Updated digital assets (homepage, app ban
Slide 19: Structural advantages
structural advantages Network Business Our Trusted Strong relative positions model people brand cost position > High yielding > Low cost more > Strong employer > Value for money > Significant cost network attractive as the attracting the best advantage vs main economy recovers people > First choice
Slide 20: Network: strong positions in key European catchments
Network: strong positions in key European CATCHMENTS POPULATION AND WEALTH OF MAJOR EUROPEAN CITIES 2019 Top 50 European cities by GDP/capita1. Bubble size represent easyJet touching capacity within bases2. 160 1 2 Unserved Other Basel 140 120 Paris Dublin GDP/capita ($ 000s) Frankfurt 100 Belfast A
Slide 21: Network strategy – significant opportunities
Network strategy – significant opportunities > Primary airport #1 and #2 positions Lead in our > Provide a balanced network portfolio across domestic, city Core and leisure destinations Markets > Scale of offering provides market leadership in product offer > Maintain our focus on country leadership
Slide 22: Leading business model
Leading business model Short haul will recover first1 Leading leisure offer1 Business will seek value2 % of CY 2019 capacity by month Capacity share in top 20 leisure airports Buyers trading up/down 2005-2008 % of category buyers 110 13.6% 100 90 - 7% 80 Trade 13% 22% 20% Up 26% 70 YoY Short Haul Ne
Slide 23: Unique / strong position (easyJet holidays)
unique / strong position Demand expected to recover ahead of airlines > Summer 21 booking position significantly ahead of last year at this point Competitors under pressure > Traditional tour operators struggling due to large fixed cost base and high commitments/ prepayments > OTAs struggling with t
Slide 24: Our people
Our people Best place to work overall Our People Strategy 4.1 2.9 2.9 Building passion Drive around Our productivity Purpose easyJet BA Ryanair Glassdoor ratings out of 5 as at October 2020 Industry experts Deliver People Support tools to support joining the team a changed Well-being of our people K
Slide 25: Trusted brand – leading customer offer
Trusted brand – leading customer offer easyJet easyJet first % of respondents Nearest LCC 80% of seats booked by returning customers 42% (up 2% from FY19) choice brand vs 25% 25% 37% nearest LCC1 16% 21% CSAT of 83% in Q4, improvement of 14ppts vs 11% 8% 9% Q4 2019 1% UK FR CH IT DE Positive movemen
Slide 26: Largest ever Cost Efficiency Programme
Largest ever Cost Efficiency Programme Rapid cost out Right-sizing & Seasonality Structural efficiencies > Furlough schemes across Europe > Up to 30% FTE reduction across 6 > Simpler ground handling contracts > Renegotiated fleet deal countries delivering greater value and focus on > 2 year pay free
Slide 27: Sustainability – carbon neutral
Sustainability – carbon neutral Strategic Tackling Carbon Emissions Stimulating Carbon Innovation Going Beyond Carbon Pillars Progress > World’s first major airline to be > Partnership with Airbus to inform > Launched Sustainability Strategy & carbon neutral their electric, hybrid & hydrogen strengt
Slide 28: Sustainability – important to customers
Sustainability – important to customers of consumers say that the sustainable behaviour 72% of a company is now a more important factor in a purchase decision post-COVID19 Only major international airline 55% Likelihood to choose easyJet over another flying carbon neutral airline due to carbon offse
Slide 29: Outlook
outlook > Based on current travel restrictions in the markets in which we operate, easyJet expects to fly no more than c.20% of planned capacity for Q1 2021 The European slot waiver mechanism put in place for this winter will enable easyJet to best match our capacity against the lower demand that
Slide 30: Positioned to bounce back strongly
positioned to bounce back strongly Robust and decisive response to the pandemic Launched largest Cost Out programme in easyJet’s history Unmatched network, value and trusted brand will attract customers easyJet People form the base on which we build easyJet holidays in a strong position Flexibility
Slide 31: Q&A
Q&a
Slide 32: Appendix
appendix
Slide 33: (Loss)/profit after tax
(Loss)/profit after tax £m FY 2020 FY 2019 Change* Headline (loss)/profit before tax (835) 427 (1,262) Headline tax credit/(charge) 110 (78) 188 Non-Headline items (438) 3 (441) Non-Headline tax credit/(charge) 84 (3) 87 Total (loss)/profit after tax (1,079) 349 (1,428) Total (loss)/profit before ta
Slide 34: EPS, dividends and ROCE
EPS, Dividends and ROCE FY 2020 FY 2019 Change* Headline basic (loss)/earnings per share (pence) (178.1) 88.7 (301%) Headline diluted (loss)/earnings per share (pence) (178.1) 87.8 (303%) Total basic (loss)/earnings per share (pence) (264.9) 88.6 (399%) Total diluted (loss)/earnings per share (pence
Slide 35: Revenue breakdown
Revenue breakdown Total Group revenue, £m FY 2020 FY 2019 Change* Passenger revenue 2,303 5,009 (54.0%) Ancillary revenue 706 1,376 (48.7%) Total revenue 3,009 6,385 (52.9%) Airline revenue per seat, £ FY 2020 FY 2019 Change* Passenger revenue 41.78 47.71 (12.4%) Ancillary revenue 12.57 13.10 (4.1%)
Slide 36: Headline cost per seat
Headline cost per seat Weighted Variance at Variance at Cost per seat variance at constant constant Drivers excluding fuel constant currency* currency* currency* £ £ % % • Reduced volumes Airports and ground handling 16.88 0.52 3.0% 1.2% • Reduced load factors • Ramp up deals post lockdown • Reduced
Slide 37: Fleet profile
Fleet profile FY 2020 FY 2019 Change A319 (leased) 70 56 14 A319 (owned) 52 69 (17) A319 Total 122 125 (3) A320 (leased) 50 43 7 A320 (owned) 156 157 (1) A320 Total 206 200 6 A321 (leased) 7 0 7 A321 (owned) 7 6 1 A321 Total 14 6 8 Total fleet 342 331 11 Leased 127 99 28 Number unencumbered 165 232
Slide 38: Non-headline items
Non-headline items FY 2020 FY 2019 Change* Description £m £m £m During 2019, only £2 million of the close down accrual of £4 million for our FCP commercial Commercial IT platform credit - 2 (2) platform was utilised, mainly due to staff being redeployed and anticipated compromise agreements not bein
Slide 39: Currency impact
Currency impact Revenue Costs FY 2020 FY 2019 FY 2020 FY 2019 Sterling 42% 43% 50% 30% Euro 47% 46% 31% 38% US dollar* 1% 1% 13% 26% Other (principally Swiss franc) 10% 10% 6% 6% * The 13ppt year on year reduction in USD costs reflects the reduction in fuel purchased in 2020 Average effective Euro r
Slide 40: Return on capital employed
Return on capital employed Reported £m FY 2020 FY 2019 Headline (loss)/earnings before interest and tax – reported (777) 466 UK corporation tax rate 19% 19% Normalised headline operating (loss)/profit after tax (NOPAT) (629) 377 Average shareholders’ equity – reported 2,442 3,083 Average net cash –
Slide 41: Q4 Passenger Statistics
Q4 Passenger Statistics July 2020 2019 Change Passengers 2,183,279 9,469,781 -76.9% Load Factor 83.9% 94.3% -10.4 ppt August 2020 2019 Change Passengers 4,312,805 9,578,600 -55.0% Load Factor 76.1% 94.3% -18.2 ppt September 2020 2019 Change Passengers 2,872,785 8,972,901 -68.0% Load Factor 71.6% 91.