easyJet plc · LSE:EZJ
easyJet — H1 2005 Earnings Presentation
19 slides from easyJet's earnings presentation, May 24, 2005
Slide 1: 2005 interim results
2005 interim results 24 May 2005 1 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) O
Slide 2: Financial highlights
Ray Webster Chief Executive Financial highlights Total revenue up 26% to £553m, per ASK down 5% 4 Total cost per ASK down 5% – Ex-fuel down 8% 4 Pre-tax loss before goodwill 21% higher at £22m 4 Pre-tax loss margin of 4% – In line with last year 4 Gross cash up £127m to £637m 4 42
Slide 3: Business highlights
Business highlights Business continues to develop 4 Growth of pan-European network continues 4 Consumer offering further enhanced 4 Strong ancillary contribution 4 Reducing costs to offset fuel 5 Jeff Carr Finance Director 43
Slide 4: Profit and loss account
Profit and loss account £m H1 2005 H1 2004 Change Total revenue 553 440 + 26% Operating costs (516) (406) + 27% EBITDAR 37 34 + 11% Finance & ownership (60) (52) + 15% Pre-tax loss (ex goodwill) (22) (19) + 21% Margin - 4.0% - 4.2% Pre-tax loss (reported) (31) (27) + 14% 7 Available seat kilometres
Slide 5: Revenue performance and ancillary contribution
Revenue - performance H1 2005 H1 2004 Change Total revenue per pax (£) 41.03 40.59 + 1.1% Total revenue per seat (£) 34.38 33.81 + 1.7% Passengers (m) 13.5 10.8 + 25% £m Passenger revenue 513.6 412.3 + 25% Ancillary contribution 39.7 27.4 + 45% Total revenue 553.3 439.7 + 26% 9 Revenue – ancillary c
Slide 6: Unit cost development and fuel cost impact
Unit cost development Cost per Change Contribution to ASK (p) vs. last yr. CASK % change Airports / handling 1.16 - 8% - 2.4% Crew 0.46 - 13% - 1.7% Better Ownership costs 0.41 - 13% -1.5% Maintenance 0.40 - 7% - 0.8% Other 0.33 - 6% - 0.5% Selling 0.18 - 3% - 0.1% Navigation 0.34 - - Worse Fuel 0.6
Slide 7: Ownership costs and net income and EPS
Ownership costs H1 2005 H1 2004 Change Average no. of aircraft 96 78 + 24% £m Depreciation (11) (14) - 19% Leases (59) (43) + 38% Net interest 10 4 + 127% Net ownership cost (60) (52) + 15% Cost per ASK 0.41p 0.47p - 13% Cost per aircraft (0.62) (0.67) - 7% 13 Net income and EPS £m H1 2005 H1 2004 C
Slide 8: Cash flow movement and balance sheet
Cash flow movement Financing 2005 Tax and interim £15m total cash interest £14m £637m Working Net capex capital £149m (£29m) 2004 year end total cash £510m EBIT Depreciation / (£41m) amortisation £20m 15 Balance sheet £m Mar 05 Sep 04 Aircraft (inc. deposits) 330 325 Cash 637 510 Goodwill 301 310 Ot
Slide 9: Hedging – US$ and fuel
Hedging – US$ 2.00 US$:£ 1.90 (Range $1.78 to $2.05) Avg: $1.85 1.80 1.70 Avg: $1.70 (Range $1.65 to $1.82) Q3 65% Q4 71% 1.60 Oct 03 Jan 04 Apr 04 Jul 04 Oct 04 Jan 05 Apr 05 Jul 05 17 Hedging - fuel 650 Jet A1 metric tonne (US$) H2 39% capped at avg: $609 600 550 500 450 400 Avg: $362 350 (Range $
Slide 10: Potential fuel impact on PBT; International accounting standards
Potential fuel impact on PBT vs last year H1 05 H2 05 Avg. market: $466pmt Post hedging: $415pmt Current spot: $500pmt (£18m) US$ per £: 1.83 (£41m) $10 movement per metric tonne = £2.3m impact on 2005 PBT 19 International accounting standards 4 Finance systems work largely complete – Currently para
Slide 11: Business highlights
Ray Webster Chief Executive Business highlights Business continues to develop 4 Growth of pan-European network continues 4 Consumer offering further enhanced 4 Strong ancillary contribution 4 Reducing costs to offset fuel 22 411
Slide 12: Fleet plan and capacity growth
Fleet plan 4 98% new* aircraft by Sep 06, average age just 2.2 years Owned/leased aircraft at financial year end 147 121 108 92 115 21 A319 55 86 33 737-700 32 38 737-300 32 21 3 32 Actual Expected Expected Expected Sep 2004 Sep 2005 Sep 2006 Sep 2007 * meaning either a A319 or 737-700 23 Capacity g
Slide 13: Revenue environment and network development
Revenue environment 4 Competition – manageable but remains intense – European capacity higher than last summer, despite airline failures – Competition from other airlines on 115 out of 147 market pairs – At least one low-cost competitor on 80 out of 147 market pairs 4 Own growth naturally dilutes ye
Slide 14: Network development and customer focus
Network development 4 40 routes to/from Germany by Sep 05 – New route has been added every 2 weeks – Active management of route portfolio 4 Awareness still building – Dedicated country manager – 100th aircraft celebrated in Berlin (not UK) 4 Adapting business to local market – e.g. Additional paymen
Slide 15: Customer focus and business traveller
Customer focus 4 New website live – Improved booking functionality – More payment methods and currencies – 15 languages – Dynamic packaging introduced – Promotes a wider variety of partners 4 Customer friendly pricing – Group booking for up to 40 – Transparent pricing imminent 4 More coming soon 29
Slide 16: Ancillary contribution; reducing costs
Ancillary contribution 4 Better execution delivering results – Higher contribution from inflight – Excess baggage payment collection much improved 4 Infant and sporting goods charges introduced 4 Change fee increased to £15 (from £10) 4 Dynamic packaging of insurance now live – Other services to fol
Slide 17: Reducing costs – maintenance; current trading and outlook
Reducing costs – maintenance 4 Fifth largest cost area (11% of cost base) 4 Currently outsourced to SR Technics – Boeing fleet: long-term contract until 2011 – Airbus fleet: short-term contract until Sep 05 4 Competitive tender for long-term Airbus contract – Nearing conclusion – Finalists: SRT and
Slide 18: Summary
Summary 4 Strong passenger and ancillary revenue growth 4 Profit in line with expectations 4 Unit costs reduced despite fuel cost increases 4 Strong cash generation 4 Well positioned for continued balanced growth 35 Appendix 418
Slide 19: Goodwill and accelerated depreciation; fleet financing
Goodwill and accelerated depreciation £m 2005 2004 PBT (underlying) (20) (15) Accelerated depreciation (3) (3) PBT (ex goodwill) (22) (19) Goodwill amortisation (9) (9) PBT (reported) (31) (27) 37 Fleet financing 4 Additional financing in place 4 Long-term (post 2007) at least a third of fleet will