Slide 1: H1 2021 analyst & investor presentation
H1 2021 analyst & investor presentation 20 May 2021
Slide 2: Strength in difficult times
Strength in difficult times > The past year has been the most challenging time the airline industry has had to experience > easyJet has been decisive in delivering actions that have strengthened the business through these tough times > easyJet is positioned well to lead the post pandemic recovery >
Slide 3: Financial Review
FINANCIAL REVIEW Kenton Jarvis – CFO
Slide 4: Key performance indicators
Key performance indicators H1 2021 H1 2020 Change1 Seats flown (m) 6.4 42.7 (85.0%) Passengers (m) 4.1 38.6 (89.4%) Load factor (%) 63.7% 90.3% (26.6ppts) Average sector length (km) 1,261 1,095 15.2% Airline Revenue per seat2 - reported currency (£) 36.93 55.60 (33.6%) Airline Revenue per seat - con
Slide 5: Quarterly KPIs
Quarterly KPIS Airline revenue per seat (£) Seats flown (m) 40 37.27 36.21 36.93 7 6.4 35 6 30 5 4.3 25 4 20 3 2.1 15 2 10 1 5 0 0 Q1 Q2 H1 Q1 Q2 H1 Load factor (%) Headline cost per seat (£) 70% 65.7% 63.7% 180 168.66 59.5% 60% 145.00 150 133.78 50% 120 40% 90 30% 60 20% 10% 30 0% 0 Q1 Q2 H1 Q1 Q2
Slide 6: Financial performance
Financial performance H1 2021 H1 2020 Change* £m £m £m Total revenue 240 2,382 (2,142) Headline costs: Headline costs excluding fuel & balance sheet FX gain (868) (2,041) 1,173 Balance sheet foreign exchange gain 24 - 24 Fuel (97) (534) 437 Headline loss before tax (701) (193) (508) Headline loss be
Slide 7: Airline revenue performance
AIRLINE Revenue performance Revenue per seat bridge -33.6% -35.3% £55.60 (£2.11) (£2.44) (£15.05) (3.8%) (4.4%) £36.00 £0.93 £36.93 (27.1%) H1 2020 reported External events Ancillary (incl. impact Coronavirus H1 2021 @ CC FX H1 2021 reported during FY20 of coronavirus) 7
Slide 8: Airline costs
Airline costs Headline cost per seat bridge Reduction in absolute costs vs prior year -88% -44% -9% -45% -84% -43% -82% +148% (£12.45) £145.58 (£2.81) £148.39 £3.99 (£0.60) £145.00 (£18.55) (£0.12) (£33.60) (£24.96) £59.75 £3.85 H1 2020 Airports Crew Ownership Overheads and Navigation Maintenance H1
Slide 9: Impact of fuel & foreign exchange
Impact of fuel & foreign exchange Change* H1 2021 fuel impact H1 2021 H1 2020 $ % Fuel $ per metric tonne Market rate 382 563 181 32.1% Effective price 688 638 (50) (7.8%) US dollar rate Market rate 1.33 1.28 (0.05) (4.0%) Effective price 1.37 1.34 (0.03) (2.2%) Difference between market rate and ef
Slide 10: Decisive funding action underpins liquidity
Decisive funding action underpins liquidity UKEF £1.4bn Access to Bonds SLBs £1.0bn £1.4bn c£2.9bn unrestricted liquidity1 Over £5.5bn total liquidity RCF raised Equity placing £0.4bn £0.4bn Term Investment grade credit CCFF loans ratings maintained £0.6bn £0.4bn 10 1) As at 31 March 2021, including
Slide 11: Debt maturity profile
Debt maturity profile 1200 IFRS 16 Lease Liability CCFF Bonds UKEF 1000 800 600 400 200 0 FY'21 FY'22 FY'23 FY'24 FY'25 FY'26 FY'27 FY'28 Debt maturity profile optimised, further undrawn liquidity available 11
Slide 12: Strong cash management – Q1 / Q2
Strong cash management – Q1 / Q2 £m Q1 Q2 H1 Proceeds from Eurobond and UKEF - 1,804 1,804 Proceeds from sale and leasebacks 748 62 810 Repayment of debt - (1,043) (1,043) Net cash from Financing Activity 748 823 1,571 Refunds Paid1 (108) (146) (254) Working Capital movements2 (405) (18) (429) Opera
Slide 13: Strong cash management – H1
Strong cash management – H1 Net cash from financing activity: £1,571m Cash burn: (£1,438m) 810 1,804 (1,043) (254) (429) 215 2,316 2,335 (601) (245) (124) (114) Cash & MMDs at Proceeds from Proceeds from sale Repayment of Refunds paid Working capital Operating loss Capex incl. Depreciation Other mov
Slide 14: Strong balance sheet
Strong balance sheet 31 March 31 March 30 September £m 2021 2020 2020 Goodwill and other intangible assets 589 613 597 Property, plant and equipment 3,733 4,823 4,409 Right of use assets 1,078 468 644 Derivative financial instruments (58) (554) (327) Equity Investments 33 33 33 Other assets (excludi
Slide 15: Utilising flexibility in fleet
Utilising flexibility in Fleet 370 355 > Fleet size reduced by c.10% in 350 342 342 response to Covid-19 330 327 > Current plan allows the flexibility 330 to expand our contract 310 depending on expectations of 310 future demand 307 290 > This plan illustrates current 291 arrangements with Airbus an
Slide 16: Gross capital expenditure
Gross capital expenditure 1,400 Other Lease payments Maintenance Aircraft payments > Capex in FY‘21 comprised Total gross capex principally of safety/ 1,200 maintenance-related c.£1,000m expenditure and lease payments 1,000 c.£900m > Growth capex resumes from 800 £700m FY’22 600 > Capex projections
Slide 17: Fuel and foreign exchange hedging
Fuel and foreign exchange hedging Hedging and Fair Value Adjustment for Hedge Discontinuation > easyJet continues to hedge contractual exposures (such as leases & capex) but has decreased the amount of operational hedging that is taken out for future periods until there is greater clarity over deman
Slide 18: Outlook
outlook > Based on current travel restrictions in the markets in which we operate, easyJet expects to fly c.15% of 2019 capacity levels in Q3, with an expectation that capacity levels will start to increase from June onwards • Late announcements of changes to travel restrictions will impact load fac
Slide 19: CEO update
ceo update Johan Lundgren – CEO
Slide 20: Driving the business forward
Driving the business forward > £5.5bn liquidity raised quickly and efficiently as the COVID19 pandemic hit Raising liquidity > From various sources, including aircraft sale and lease backs (£1.5bn), highly successful bond issue (£1bn), equity raise (£400m), government CCFF (£600m) and UKEF bond (£1.
Slide 21: Safety is always our #1 priority
Safety is always our #1 priority Safety for our crew & customers Have implemented a number of Bio-security measures: • Daily disinfection process which provides surface protection from viruses that lasts for at least 24 hours • All passengers and crew required to wear masks onboard at all times • Ag
Slide 22: Scientific data supports an easing of restrictions
Scientific data supports an easing of restrictions Research by Yale School of Public Health: • The impact of travel on hospitalisation is very limited • Quarantine is not required for several key EU destinations • Under the UK policy Spain and a number of other countries should also be included in G
Slide 23: What's happening in Europe?
What’s happening in Europe? Sensible restrictions and positive vaccination momentum across many countries in the EU Country Travel Open? System? Testing? Netherlands Yes Traffic light system PCR test only required from an Orange country (not Green or Yellow) Germany Yes Risk area classification Anti
Slide 24: easyJet - ready to lead recovery
easyJet - ready to lead recovery People want to travel Competing on value and leading on values • 57% of us have saved money to spend on holidays in the sun – on • easyJet’s main competitors are legacy carries who can not average nearly £5000 compete with the low cost base of easyJet • The average B
Slide 25: Strategy update
strategy update
Slide 26: Structural advantages
structural advantages Network Business Our Trusted Strong relative positions model people brand cost position > Leading positions in > Low cost more > Strong employer > Value for money > Significant cost key markets and attractive as the attracting the best advantage vs main primary airports economy
Slide 27: easyJet's strategic initiatives
Easyjets strategic initiatives Network Customer Product Strategy Excellence Portfolio Evolution easyJet Cost Reduction Sustainability Holidays Programme Underpinned by our People & Operational and Digital Safety 27
Slide 28: Network strategy – Significant opportunities
Network strategy – Significant opportunities > Prioritise #1 & #2, primary, slot constrained airport positions 1. > Preserve scale and cost leadership Lead in our > Provide a balanced network portfolio across domestic, city and leisure destinations Core Markets > Maintain our focus on country leader
Slide 29: Contribution per block hour FY'19
Network strategy – prioritise strengths Pre-COVID19 Profitability by base > Focus on higher yielding Decrease capacity / Base Closure bases: Build / maintain capacity ▪ Process has begun and is highlighted with changes made in FY’20 Contribution per block hour FY’19 ▪ Continue to build strength in p
Slide 30: Dynamic network / schedule development
Dynamic network / schedule development Well balanced actions delivered over past 6 Areas of future focus months > Summer ‘22 schedule on sale earlier than ever > Continue to focus on our core markets – e.g. LGW, MXP, PAR & AMS. > Proactively shifting capacity onto domestics in UK, France & Italy ▪ C
Slide 31: Product portfolio evolution – driving ancillaries
Product portfolio Evolution – driving ancillaries Standard Plus Fare > New fare class > Includes Up front seating, Speedy Boarding, cabin bag > Launched in January Cabin Bags > Sold as a bundle with premium seating > 42-63 premium seats available per flight > Improve boarding efficiency and OTP > Dy
Slide 32: Customer excellence
Customer excellence > Book with confidence this summer: ▪ Covid-19 tests at negotiated rates & Documentation verification ▪ Market leading Protection Promise: ▪ Freedom to Change: Transfer your flight, fee free, up to 2 hours before departure ▪ Travel Restriction Protection: If restrictions change,
Slide 33: easyJet Holidays – leading the way
Easyjet holidays – leading the way > Business model enabling agile response ▪ Able to restart and scale rapidly due to low-cost flexible business model ▪ Already launched holidays to all European ‘green’ list destinations ▪ Early launch of W21 and S22 significantly ahead of expectations > Flexibilit
Slide 34: Cost reduction programme
Cost reduction programme Largest ever Cost Reduction Programme ✓ Culture of low cost – £0.05 per pax saving worth £5 million ✓ Significant work done across the business already: On target to deliver • H1 cost programme delivered savings that were ahead of internal expectations c.£500m in savings in
Slide 35: Crew efficiency
Crew efficiency ✓ Union agreements up to date everywhere (Italy negotiations start May) ✓ 30% reduction in FTE crew (ex. Italy) with 7% reduction in aircraft ✓ 20% improvement in productivity with adjusted FTE ✓ 16% saving on the FY20 crew budget of £880m ✓ Up to 8% pay reductions in some high cost
Slide 36: Airports & Ground Handling
Airports & Ground Handling ✓Short term airport deals covering 80% traffic First wave OTP FY’21 YTD ✓20+ aircraft available to redeploy for 2022 where airports discount 96% ✓Permanent Savings delivered in Ground Ops and contact centres Vs 89% in 2019 & 91% in 2020 ✓132 major handling contracts renego
Slide 37: Engineering and maintenance
Engineering and maintenance ✓Reducing spare aircraft by 5 = adding 1.7% seat capacity with no capex ✓100% line maintenance insource for lower cost & better quality at LGW, BER, GLA, EDI, BRS ✓Heavy Maint: Extended Luft. Tech (2025) and SRT Malta (2023) which included cost savings ✓Engine shop: Exten
Slide 38: Sustainability
Sustainability The world’s first major airline to operate carbon neutral flights > First major international airline to offset all carbon emissions Industry leading on behalf of customers Differentiated position > On all flights across the network > Began in November 2019 > Offset schemes accredited
Slide 39: Sustainability
Sustainability Partnerships to pioneer technology for Engaging customers on carbon future zero-emissions aircraft offsetting WEBSITE press Email • Intention to launch the ZEROe aircraft programme with a full-scale prototype by late 2020s – for service by 2035 Social media > Intends to conduct ground
Slide 40: In a strong position & ready to ramp up
In a strong position & ready to ramp up > Strong liquidity position, a cost reduction programme that is delivering, cash burn under control and an investment grade balance sheet > Flexibility to react to changes in conditions and adapt to demand movements across the network ▪ Able to ramp up to 90%
Slide 41: Q&A
Q&A
Slide 42: Appendix
Appendix
Slide 43: Loss after tax
Loss after tax £m H1 2021 H1 2020 Change1 Headline loss before tax (701) (193) (263.2%) Headline tax credit/(charge) 126 (1) 12,700.0% Headline loss after tax (575) (194) (196.4%) Total loss before tax (645) (353) (82.7%) Total tax credit 96 29 231.0% Total loss after tax (549) (324) (69.4%) Total e
Slide 44: Airline Revenue per seat
Airline Revenue per seat Total Group reported H1 2021 H1 2020 Change1 Passenger revenue 170 1,833 (91%) Ancillary revenue 70 549 (87%) Total revenue 240 2,382 (90%) Airline revenue per seat, £ Airline H1 2021 H1 2020 Change1 Passenger revenue 26.47 42.93 (38%) Ancillary revenue 10.46 12.67 (17%) Tot
Slide 45: Increasing proportion of A320s
Increasing proportion of A320’s H1 2021 FY 2020 Change A319 (Leased) 67 70 (3) A319 (owned) 45 52 (7) A319 Total 112 122 (10) A320 (Leased) 69 50 19 A320 (owned) 135 156 (21) A320 Total 204 206 (2) A321 (Leased) 11 7 4 A321 (owned) 3 7 (4) A321 Total 14 14 0 Total fleet 330 342 (12) Leased 147 127 2
Slide 46: Airline Headline cost per seat
Airline Headline cost per seat Variance at Variance at Weighted variance at Cost per seat constant constant currency1 constant currency1 Drivers £ currency1 % % £ • Reduced flying volumes Airports and ground handling 13.14 3.85 23.2% 8.1% • Structural cost initiatives savings • Missed volume incenti
Slide 47: Return On Capital Employed
Return On Capital Employed H1 2021 H1 2020 Headline loss before tax (701) (193) Headline loss before interest and tax (686) (174) UK corporation tax rate 19% 19% Normalised headline operating loss after tax (NOPAT) (556) (141) Average shareholders’ equity 1,733 2,539 Average net debt 1,570 397 Avera
Slide 48: Non-headline items
Non-headline items H1 2021 H1 2020 Change1 Description £m £m £m A £60 million gain as a result of the sale and leaseback of 35 aircraft Sale and leaseback gain 60 1 59 in the period (H1 2020: £1 million gain as a result of the sale and leaseback of 10 aircraft) A £25 million credit in relation to th
Slide 49: Currency impact
Currency impact Revenue Costs H1 2021 H1 2020 H1 2021 H1 2020 Sterling 30% 42% 67% 33% Euro 54% 48% 5% 32% US dollar 0% 1% 22% 28% Other (principally Swiss franc) 16% 9% 6% 7% 49 Average effective Euro rate for revenue for H1 2021 was €1.10 (H1 2020: €1.14). Average effective Euro rate for costs for