Slide 1: Q3 2016 Update
Q3 2016 Update July 2016
Slide 2: Q3 2016 – Trading
Q3 2016 – Trading o Challenging operating environment for all airlines o Continuation of external events o Uncertain consumer environment o Increased exchange rate volatility o Yield deterioration through Q3 o Low oil price sustaining inefficient capacity leading to weaker yields o easyJet is contin
Slide 3: Third Quarter – Key Financial Information
Third Quarter – Key Financial Information Q3 ’16 Q3 ’15 Change Passengers (m) 20.2 19.1 5.8% Load factor (%) 92.0% 91.7% 0.3ppt Seats (m) 21.9 20.8 5.5% Seat revenue (£m) 1,174 1,209 (2.8%) Non-seat revenue (£m) 22 19 12.3% Total revenue (£m) 1,196 1,228 (2.6%) Total revenue per seat (£) 54.54 59.08
Slide 4: Third quarter - Significant impact from disruption
Third quarter - Significant impact from disruption April May June Q3 Q3 Cancellations 196 173 852 1,221 Disruptive operating environment • ATC strikes (14 days) and other general strikes across the network (Italy, France, Portugal) in the quarter • Increase of 152 cancellations since 26 June, Profit
Slide 5: Severe impact from external events through the year
Severe impact from external events through the year YTD Q3 profit before tax impact Events £m Sharm El Sheikh (disruption, demand, cancelled flying ) 30 Paris 50 Brussels / EgyptAir / wider network impact of post-terrorism 25 events Disruption (strikes, weather, runway closures) 20 Total PBT impact
Slide 6: 65% of Q4 seats sold
65% of Q4 seats sold % Seats sold * 91.7% 92.0% Summer '15 Summer '16 77.9% 77.8% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Q3 Jul Aug Sep H2 * H2 (1 April 2016 to 30 September 2016) 6 As at 19-07-16 6
Slide 7: Revenue trading profile
Revenue trading profile Q4 Booked Revenue vs. LY • Until late June Q4 booked revenues were above the prior year • Since then Q4 booked revenues have fallen behind despite increased capacity • Historically easyJet has seen an uptick in yields in the final quarter through strong summer demand Pre EU v
Slide 8: easyJet response to current operating environment
easyJet response to current operating environment Immediate actions • Extra cost challenges implemented • Ensure CPS ex fuel (@cc) decreases by 1% for FY Cost ’16 (despite abnormal impact from disruption in Q3) Fleet & Financial • Strong focus on cash flexibility • Fleet allocation planning • Sale a
Slide 9: Driving our long term strategy
Driving our long term strategy 2017 / 18 actions • Strong focus on cash Fleet & Financial • Fleet allocation planning flexibility • Prioritise new A320 aircraft (12%-14% CPS saving) • Flat CPS ex-fuel, 2019 vs. 2015 Cost • Fleet up-gauging • easyJet Lean Customer & • Gatwick North Terminal Operation
Slide 10: easyJet well positioned – Balance sheet strength
easyJet well positioned – Balance sheet strength Balance sheet strength 130% 120% AF-KLM 110% Air Berlin 100% 90% Norwegian 80% IAG Gearing 70% 60% 50% Wizz 40% Lufthansa easyJet 30% Ryanair 20% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 10% 0% -5% 0% 5%
Slide 11: Fuel and foreign exchange hedging
Fuel and foreign exchange hedging Fuel US dollar Euro surplus CHF surplus requirement requirement Three months ending 88% at $780/ 30 September 2016 78% at $1.60/£ 85% at €1.26/£ 80% at CHF1.46/£ metric tonne Full year ending 88% at $811/ 30 September 2016 84% at $1.61/£ 95% at €1.23/£ 84% at CHF1.4
Slide 12: Outlook in 2016
Outlook in 2016 Capacity (seats flown) • H2 c.+6.1% (before disruption) • FY c.+6.6% (before disruption) Revenue per seat at constant currency • Q4: current run rate revenue per seat reduction of 7.5% • Each 1ppt of Q4 RPS worth c£20m PBT • Q4: RPS trajectory uncertain Cost per seat at constant curr
Slide 13: Summary
Summary • Q3 2016 has been a difficult operating environment • easyJet responding - clear actions underway • easyJet’s model is robust • Fundamentals have not changed • Active focus on opportunities this environment provides • Well positioned: network, advantaged balance sheet, cost control, financi
Slide 14: Q&A
Q&A
Slide 15: 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