Slide 1: Q1 IMS roadshow presentation
Q1 IMS roadshow presentation FEBRUARY 2013 1 1
Slide 2: Contents
Contents 1. Q1 IMS 2. Strategic overview 3. Fleet order objectives 2
Slide 3: Q1 IMS
Q1 IMS 3
Slide 4: Progress against strategic objectives
Progress against strategic objectives 1. Drive demand, conversion and yields across Europe • Passenger numbers up by 6.2% • Load factors increased by 1 percentage point • Revenue per seat up by 8% (1) • Operational roll-out of allocated seating successfully completed 2. Maintain cost advantage • Cos
Slide 5: Next Generation evaluation progressing well
Next Generation evaluation progressing well Technical evaluation completed • Clear cost advantage from moving to next generation and continuing to replace 156 seat aircraft with 180 seater aircraft Commercial evaluation progressing well • Engaging with Boeing, Airbus and Bombardier, Pratt and Whitne
Slide 6: Outlook
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 4.5% (as
Slide 7: Strategic overview
Strategic overview 7
Slide 8: Strategic process
Strategic process 2012 2013 Pre - June June July November January - Strategy • Introduced tools to • Board agreement • Decision to close • Review of capital evaluate network ROCE to continue Madrid announced structure and capital allocation flexible growth of • Increase in ordinary • Reviewed networ
Slide 9: Maintain easyJet's sources of competitive advantage
Maintain easyJet’s sources of competitive advantage easyJet is best placed to create value in European short-haul markets if it adheres to the following guiding principles: • Be number 1 or 2 in the market with a significant market share • Cost advantage against the competitor in a market • High ass
Slide 10: Investing in returns and growth
Investing in returns and growth 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 Italy • Network validate
Slide 11: Structural change creating growth opportunities for easyJet
Structural change creating growth opportunities for easyJet OAG capacity change FY13 H1 easyJet change YOY Chg 11% Competitors on easyJet markets H1 capacity Chg since 9% Total on easyJet markets Winter Nov’12 6% 5% 5% Competitors on 3% 4% 4% -2.5% -0.7% easyJet routes easyJet +3.6% No chg 0% -1% -2
Slide 12: Modest growth consistent with increasing returns
Modest growth consistent with increasing returns FY12 route performance Routes > 3yrs Routes < 3yrs ROCE 12% Improved returns year on year Returns FY11 FY12 12% ROCE ROCE for this analysis defined as normalised profit after tax divided by average net debt plus average shareholders’ equity Routes 12
Slide 13: Fleet order objectives
Fleet order objectives 13
Slide 14: easyJet's fleet strategy
easyJet’s fleet strategy Integrated approach required to deliver lowest fleet cost across the lifecycle Fleet plan flexibility Lowest life cycle cost • Network requirements • Business case driven decisions define capacity needs • Negotiate fleet transactions • Short lead times for • with range of su
Slide 15: Fleet order objectives
Fleet order objectives The objective of any new fleet order will be to ensure that easyJet is able to: 1. Introduce more cost efficient 180 plus seater aircraft to replace the 156 seat A319s 2. Improve on its current cost advantage over competitors on its routes through the introduction of the next
Slide 16: Meaningful cost advantage
1. Cost Meaningful cost advantage Advantage Move to ‘180 plus seater’ aircraft enhances easyJet’s cost per seat advantage 7-8% Current Fuel Maintenance Crew Ground Ownership Other 180 plus small gauge ops and seater (156 seats) navigation ‘180 plus seater’ aircraft deliver meaningful cost advantage
Slide 17: Introduce fuel efficient aircraft
2. Cost Introduce fuel efficient aircraft Efficiency Further move to new generation will allow easyJet to continue its cost advantage 4-5% 180 plus Fuel Ownership Other New 180 plus seater seater It is anticipated that from 2018 suppliers will only be producing new generation aircraft Chart assumes
Slide 18: Fleet replacement and growth
3. Fleet Fleet replacement and growth age Bridge period Next generation Total 2015 – 2017 2018 – 2022 2015 -2022 Replacement Growth 3 - 5% Replacement Growth 3 - 5% Replacement Growth 3 - 5% • Minimise expenditure in the bridge period on current generation aircraft in order to maximise cost benefit
Slide 19: Flexibility in fleet plan
4. Flexibility Flexibility in fleet plan Current fleet flexibility Contracted Fleet Plan 275 258 258 • Significant increase in 254 252 age of fleet post 2018 250 243 without a new fleet 233 order Fleet Count 227 225 220 217 208 • Key objective is to 217 214 216 215 202 retain flexibility in new 210
Slide 20: The addressable market for easyJet
5. Prudent capacity The addressable market for easyJet plan High level overview of the European short haul market by pax numbers (2011 estimated data) European short-haul market estimated at 600M PAX (2011) 100 % Thin point-to-point routes Below 100 one-way pax per day 80 easyJet's share of pax 60 (
Slide 21: Next steps
Next steps Complete commercial evaluation Best and Final offers Determine whether / size of new generation fleet order Select supplier Fleet order announced Circular sent to shareholders General meeting to approve transaction Fleet order is focused on cost saving and replacement while allowing but n
Slide 22: Conclusion
Conclusion • easyJet intends to generate returns in excess of the cost of capital • easyJet intends to fund replacement, growth and maintenance capital expenditure and returns to shareholders from the cash generated by operations • A framework order on the right terms would enable easyJet to maintai
Slide 23: Appendix
APPENDIX 23
Slide 24: Fleet order is consistent with financial objectives
Fleet order is consistent with financial objectives 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 opportu
Slide 25: The addressable market for easyJet
The addressable market for easyJet Page 20 - Assumptions and methodology • Number includes scheduled as well as charter passengers • Total includes EU27 total traffic (domestic and intra EU 27), traffic to Norway, Switzerland, Russia, Morocco, Egypt, Tunisia and Turkey and the Norwegian and Swiss do
Slide 26: 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