Slide 1: 2007 Interim Results
2007 Interim Results 09 May 2007 1
Slide 2: Highlights
Highlights 4 Margin improved by 4.0pp as loss before tax reduced from £40m to £17m 4 Total revenue grew by 14% to £719m 4 Passenger revenues up 0.8% or £0.26 to £31.70 per seat 4 Ancillary revenues up 18% or £0.58 to £3.81 per seat 4 Costs ex-fuel down 2.1% or £0.57 to £27.18 per seat 4 12 month rol
Slide 3: Highlights
Highlights 4 11% increase in passenger numbers to 16.4 million 4 Madrid base opened February 2007 with 4 A319 aircraft 4 16 new routes launched - network on sale is now 292 routes serving 75 airports across 20 countries 4 100th Airbus delivered in April 2007 4 1 new A319 taken every 12 days since Se
Slide 4: Profit and loss account
Profit and loss account £m H1 2007 H1 2006 Change Total revenue 719 630 + 14% Operating costs (679) (603) + 13% EBITDAR 40 27 + 45% Finance and ownership (57) (67) - 16% Pre-tax loss (17) (40) - 58% Margin (2.4%) (6.4%) +4.0pp Loss per seat (pence) (85p) (222p) + 137p Margin improved by 4.0pp with s
Slide 5: Return on equity and profit per seat progression
Return on equity and profit per seat progression 16% £3.72 £4 14% £3.32 £4 12% £3 PBT per seat 11.9% £2.38 1 0% £2.16 £3 10.1% 8% £2 6% 7.1% £2 5.3% 4% £1 Return on equity 2% £1 0% £0 Sep 04 Sep-04 Sep 05 Sep-05 Sep 06 Sep-06 Mar 07 Mar-07 12 month rolling 5
Slide 6: Passenger revenue
Passenger revenue H1 2007 H1 2006 Change Passengers (m) 16.4 14.9 + 11% Load factor 81.2% 81.8% -0.6pp Seats (m) 20.2 18.2 + 12% Pax revenue (£m) 642 571 + 12% Per seat £31.70 £31.44 + 0.8% 6
Slide 7: Ancillary revenues
Ancillary revenues H1 2007 H1 2006 Change Ancillary revenue (£m) 77 59 +32% Per seat £3.81 £3.23 +18% Change per seat H1 2007 Card fees + 2% Change / Rescue / Speedy boarding fees + 15% Partner + 56% Excess baggage / Sporting goods + 40% In-flight - 8% Ancillary revenue per seat in order of revenue
Slide 8: Cost per seat
Cost per seat Cost/seat Change vs Change vs H1 2007 H1 2006 H1 2006 Ownership £ 2.81 - 25% - £0.91 Better Maintenance £ 2.31 - 18% - £0.52 Airports / handling £ 10.25 - 0% - £0.05 Navigation £ 3.05 + 1% + £0.04 Worse Fuel £ 9.18 + 1% + £0.05 Overheads £4.06 + 8% + £0.30 Crew £ 4.71 + 14% + £0.57 Tot
Slide 9: Aircraft ownership
Aircraft ownership Change in aircraft ownership cost per seat £1.50 £0.75 £- -£0.75 - 91p -£1.50 2003 2004 2005 2006 H1 2007 4 Improved fleet mix and financing 4 A319s represent 76% of fleet up from 60% in March 2006 4 Owned aircraft increased from 23% to 41% of fleet 4 Benefit from weaker USD (effe
Slide 10: Maintenance
Maintenance Change in maintenance cost per seat £1.50 £0.75 £- -£0.75 - 52p -£1.50 2003 2004 2005 2006 H1 2007 4 Benefit from the elimination of B737-300s from fleet and mix change to owned A319s 4 Benefit from weaker USD 4 Reduction in unscheduled one-off maintenance 4 Tender for engine maintenance
Slide 11: Airports and ground handling
Airports and ground handling Change in airport / handling cost per seat £1.50 £0.75 £- - 5p -£0.75 -£1.50 2003 2004 2005 2006 H1 2007 4 Reduction in Spanish ground handling costs with benefits from Madrid and Barcelona still to come 4 Weaker Euro and Swiss franc offsetting mix effect 4 Reduction in
Slide 12: Overheads
Overheads Change in overhead cost per seat £1.50 + 30p £0.75 £- -£0.75 -£1.50 2003 2004 2005 2006 H1 2007 4 Increase in legal and IT related costs 4 Increased share based payments & timing of bonus provisions 4 Full year forecast in line with expectations of reduced unit overhead costs 4 Options for
Slide 13: Crew
Crew Change in crew / training cost per seat £1.50 + 57p £0.75 £- -£0.75 -£1.50 2003 2004 2005 2006 H1 2007 4 Effect of salary inflation circa 17 pence per seat 4 Successful winter recruitment programme has impacted average efficiency (+400 pilots and +900 cabin crew recruited) 4 Higher retention ra
Slide 14: Net income, EPS and ROE
Net income, EPS and ROE £m H1 2007 H1 2006 Change Pre-tax loss (17) (40) - 58% Tax 4 11 - 60% Net loss (13) (29) - 56% EPS (fully diluted) (3.0p) (7.2p) - 57% Return on Equity 11.9% 5.6% + 6.3pp (rolling 12 month) 4 Full year effective tax rate around 26% 14
Slide 15: Strong balance sheet
Strong balance sheet £m Mar 07 Sep 06 Aircraft (incl. deposits) 795 699 Cash 905 861 Goodwill 310 310 Other assets 333 254 Total assets 2,343 2,124 Debt 493 480 Other liabilities 859 661 Shareholders’ funds 991 983 Total equity and liabilities 2,343 2,124 Gearing* 21% 31% *Gearing defined as (debt +
Slide 16: Good cash generation
Good cash generation £m 1100 £14m £162m £4m 1000 £905m 900 £861m £17m (£128m) (£25m) 800 700 IT ex 07 06 t. t l g ta or in in EB ap 3/ 9/ pi m nc et ca /a tc h h /n na as s k Ne Ca n Fi W C x ep Ta D 16
Slide 17: US$ forward hedging
US$ forward hedging US$:£ weighted average values 2.00 20% fwd @ $1.91 1.90 $1.88 60% collars 1.80 $1.77 1.70 H2 80% 1.60 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 4 80% exposure hedged for H2 FY07 17
Slide 18: Fuel forward hedging
Fuel forward hedging Jet A1 price per tonne (US$) weighted average values 800 $776 750 22% collars $699 700 650 36% fwd @ $659 600 550 H2 58% 500 Sep 05 Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 4 58% exposure hedged for H2 FY07 18
Slide 19: Business Review
Business Review 19
Slide 20: Business review
Business review 4 Priorities and focus 4 Fleet and growth 4 Network development 4 Business product Revenue Costs 4 Competitive landscape 4 Environmental issues 4 People People Network 20
Slide 21: Focus, growth and margin improvement
Focus, growth and margin improvement 4 Continued focus on our targets 4 15% growth 4 15% ROE 4 Yield improvement 4 Network development 4 Yield mix (e.g. business traveller) 4 Ancillary revenue 4 Car hire, hotels, In-flight 4 Operational efficiency 4 Aircraft ownership 4 Fleet mix 21
Slide 22: Fleet and order book
Fleet and order book 4 31 March fleet of 127 Aircraft 4 97 Airbus A319s 4 30 Boeing 737-700s 4 Order book: 4 95 Airbus A319s on order for delivery 2007 – 2010 4 123 further Airbus A320 family options available through 2015 4 Rapid growth of Airbus fleet 4 100th A319 April 2007 4 1 new A319 added eve
Slide 23: 15% annual capacity growth planned
15% annual capacity growth planned Committed aircraft owned / leased at end of financial year 122 137 149 174 Planned seat growth + 15% + 15% + 15% Actual Expected Expected Expected FY 2006 FY 2007 FY 2008 FY 2009 23
Slide 24: Base expansion concentrated in Europe
Base expansion concentrated in Europe Base 9/06 9/07 Base 9/06 9/07 Gatwick 18 +2 Madrid +4 Luton 17 Belfast 5 Stansted 13 +1 Paris Orly 5 +1 Bristol 9 +1 Basel 4 Berlin 8 Dortmund 4 Liverpool 8 Glasgow 4 Geneva 6 +2 Edinburgh 3 +1 Newcastle 6 +1 E Midlands 3 Malpensa 3 +4 Tactical 6 -2 Total 122 13
Slide 25: Revenue growth greatest in continental Europe
Revenue growth greatest in continental Europe % of total Growth in revenue by location revenue of route versus prior year Europe – H1 FY 06 + £41m Europe 30% H1 FY 07 + £62m UK – + £17m Europe 55% + £10m UK - £1m Domestic 15% - £1m -£10 £0 £10 £20 £30 £40 £50 £60 £70 25
Slide 26: Madrid base launch & network
Madrid base launch & network 4 Madrid base launched Feb 2007 4 4 aircraft 4 18 routes total 4 9 new routes 4 3 domestics 4 6 countries 4 Load factor to date over 80% 4 Complements existing Spanish network 4 72 routes 4 11 airports 4 8m pax last 12m 26
Slide 27: Strategic network development
Strategic network development Primary Secondary Tertiary Heartland Increased Frequency London - Geneva - Newcastle - Madrid Lisbon Faro Join the London - Bristol - London - Dots Glasgow Pisa Krakow New Frontier New London - Madrid - Bristol – Airports Zurich La Rochelle Casablanca 4 Balanced network
Slide 28: Network development in the winter schedule
Network development in the winter schedule 4 16 new routes 4 14 routes culled 4 Frequency increases on 35 routes* 4 Timing improvements on 18 routes * Capacity increases over 15% year on year 28
Slide 29: Improving product attractiveness
Improving product attractiveness 4 Product improvements through network development 4Frequency increases e.g. Newcastle - Belfast 4Timing improvements e.g. Berlin - Bristol 4 Speedy boarding introduction 4 High brand awareness 4 60% - 99% brand awareness in core countries 4 Strong customer satisfact
Slide 30: Competitive landscape: competition overlap analysis
Competitive landscape: competition overlap analysis 70% Monarch Airlines - 12 (# of market pairs overlapping) 60% British Airways - 48 bmi british midland - 11 50% Swiss - 20 bmibaby - 20 How important we are to them 40% Jet2.com - 15 flyglobespan - 4 Air Berlin - 22 30% Air France - 18 Wizz - 5 KLM
Slide 31: Revenue environment
Revenue environment 4 Tough comparatives from summer 2006 4 Passenger rev / seat up over 11% year on year in summer 2006 4 H2 growth rate (seats) approximately 18% versus 11% in H2 FY06 4 Competition – some shift in emphasis but generally remains intense 4 1+ competing airline on 170 / 217 market pa
Slide 32: Ancillary Revenue Growth +18% to £3.81 per seat
Ancillary Revenue Growth +18% to £3.81 per seat 4 Partner revenues continue to drive unit growth 4 New contracts with hotel and car partners 4 In-flight challenges 4 Speedy boarding in place across network 4 Dynamic packaging roll out on more languages and products 4 Continuing opportunity for impro
Slide 33: The environment
The environment The easyJet Environmental Code 4 Efficient in the air 4 Efficient on the ground 4 Leading the way in developing a greener future easyJet’s Environmental Credentials: 4 Modern fleet: average age 2.3 years 4 High load factors averaging >80% 4 Point to point direct services 4 Reduced ou
Slide 34: People
People 4 Recruiting for growth 4 Recruitment for summer 07 complete 4 Over 400 pilots recruited since Sept 4 Over 900 cabin crew recruited 4 Increasing crew retention 4 European expansion 4 Madrid base opened, crew on local contracts 4 Ground handling employees in Spain 4 Hangar 89 move March 2007 4
Slide 35: Outlook
Outlook 4 Growth measured in available seats will accelerate during the summer months leading to approximately 15% growth for the full year to September 2007. 4 As we stated last winter, we continue to see pressure on yields in the summer against high comparatives from last year and due to continued
Slide 36: Focus, growth and margin improvement
Focus, growth and margin improvement 4 Continued focus on our targets 4 15% growth 4 15% ROE 4 Yield improvement 4 Network development 4 Yield mix (e.g. business traveller) 4 Ancillary revenue 4 Car hire, hotels, In-flight 4 Operational efficiency 4 Aircraft ownership 4 Fleet mix 36
Slide 37: Appendix
Appendix
Slide 38: Operating statistics
Operating statistics H1 2007 H1 2006 Change Seats (m) 20.2 18.2 + 12% Load Factor (%) 81.2 81.8 - 0.6pp Passengers (m) 16.4 14.9 + 11% ASKs (m) 19,108 16,672 + 15% RPKs (m) 15,790 13,642 + 16% Stage Length (km) 944 918 + 3% Sectors 131,167 118,782 + 10% 38
Slide 39: Calculated amounts
Calculated amounts H1 2007 H1 2006 Change Average Fare (£) 39.03 38.45 + 2% Total Revenue per pax (£) 43.73 42.39 + 3% Cost / ASK (p) 3.85 4.02 - 4% Cost / ASK (ex fuel) (p) 2.88 3.02 - 5% RASK 3.76 3.78 - 0% 39
Slide 40: Profit per seat build up
Profit per seat build up £m 0 £19m -10 91p -20 £12m (£1m) (£17m) 58p (5p) (85p) -30 £5m (£1m) 26p (3p) (£6m) -40 (£40m) (30p) (£5m) -50 (222p) -60 07 06 v d st ev p el e re ea m hi Fu co 20 20 lr lu rs rh x ci Pa ps Vo 1 1 ne ve An H H O w O O 40
Slide 41: This communication is directed only at
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 net worth b