Slide 1: Half Year Results Analyst and Investor presentation
Half Year Results Analyst and Investor presentation Wednesday 9th May 2012 1 1
Slide 2: Introduction
Introduction Carolyn McCall Chief Executive 2 2
Slide 3: Strong operational and financial performance
Strong operational and financial performance Highlights: • Results ahead of guidance issued November 2011 and January 2012 • Pre tax loss reduced by £41m to £112m despite £87m increase in unit fuel • Continued strong operational performance and improved customer satisfaction • £196m distributed to s
Slide 4: Finance review
Finance review Chris Kennedy Chief Financial Officer 4 4
Slide 5: Financial Results
Financial Results £m H1'12 H1'11 Change B/(W) Total revenue 1,465 1,266 15.7% Fuel (483) (383) (26.1)% Operating costs excluding fuel (982) (928) (5.8)% EBITDAR 0 (45) - Ownership costs (112) (108) (3.7)% Loss before tax (112) (153) 26.8% EBITDAR margin 0.0% (3.6)% 3.6ppt Loss before tax margin (7.6
Slide 6: Financial Results
Financial Results £m H1'12 H1'11 Change B/(W) Loss before tax (112) (153) 26.8% Tax credit 22 39 (43.6)% Loss after tax (90) (114) 21.1% Loss per share 21.2 pence 26.6 pence 20.3% Return on capital employed - Reported (5.0)% (7.5)% 2.5ppt - Lease Adjusted Multiple* (2.8)% (4.3)% 1.5ppt - Lease Adjus
Slide 7: Unit revenue more than offsetting fuel costs
Unit revenue more than offsetting fuel costs £0.00 -£0.50 -£1.00 -£1.50 -£2.00 -£2.50 -£3.00 -£3.50 --3.00 -£4.00 -0.56 -3.87 -£4.50 -£5.00 -£5.50 +5.05 -5.47 +0.11 -£6.00 -£6.50 H1 2011 Fx (ex fuel) Revenue Fuel (inc Fx) Other costs H1 2012 ex Fuel 7
Slide 8: Currency impact
Currency impact Currency split - Total Revenue Currency split - Total Costs Other Swiss Franc Other Swiss Franc 2% 5% 8% Sterling 1% 25% 44% Sterling US Dollar 35% 46% Euro 34% Euro H1 2012 Currency Impact Favourable / (Adverse) EUR USD CHF Revenue - - 10 Fuel 1 - - Costs excluding fuel 4 (5) (5) To
Slide 9: Strong passenger and revenue per seat growth
Strong passenger and revenue per seat growth H1'12 H1'11 Change Passengers (m) 25.2 23.9 5.4% Load factor (%) 86.9% 85.4% 1.5 ppt Seats (m) 29.0 28.1 3.5% Sector length (km) 1,061 1,069 (0.8%) Total revenue (£m) 1,465 1,266 15.7% Total revenue per seat (£) 50.47 45.11 11.9% @ constant currency (£) 5
Slide 10: Strong recovery in H1 revenue per seat
Strong recovery in H1 revenue per seat RPS and Capacity changes Seats flown RPS 14.6% 14.6% 11.8% 9.2% 8.5% 7.7% 6.9% 0.0% 0.2% -5.2% Q1'11 Q2'11 H2'11 Q1'12 Q2'12 Competitor capacity 1.6% 0.4% 3.0% 0.2% -0.2% change1) Note: 1) Source OAG. Competitor capacity changes for European short haul market 1
Slide 11: Impact of fuel
Impact of fuel H1'12 H1'11 Change B/(W) Fuel $ per metric tonne market price 1,028 850 (178) effective price 972 769 (203) US dollar rate market rate 1.59 1.59 - effective rate 1.60 1.60 - Actual cost of fuel £ per metric tonne 608 481 (127) • £127 per metric tonne increase equal to £87m cost, • Vol
Slide 12: Cost per seat – key drivers H1 12 vs H1 11
Cost per seat – key drivers H1 12 vs H1 11 £ cost £ var at % var at Favourable/ per seat Constant Constant Drivers (Adverse) ex fuel Currency Currency • Renegotiation of ground handling contracts Ground Operations 14.23 0.16 1.1% • De-icing benefits from mild winter • Impact of higher load factor on
Slide 13: Fuel and foreign exchange hedging
Fuel and foreign exchange hedging US dollar Euro Fuel requirement requirement surplus Six months ending 30 September 2012 77% @ $976/tonne 79% @ $1.59/£ 76% @ €1.15/£ Full year ending 30 September 2012 78% @ $964/tonne 80% @ $1.59/£ 76% @ €1.14/£ Full year ending 30 September 2013 63% @ $995/tonne 7
Slide 14: Fleet
Fleet Mar '12 Sep '11 Change A319 (operating lease) 55 56 (1) A319 (finance lease) 6 6 - A319 (owned) 105 105 - A320 (operating lease) 6 6 - A320 (finance lease) 5 5 - A320 (owned) 27 24 3 Main fleet 204 202 2 Boeing 737 0 2 (2) Total fleet 204 204 - Owned or finance lease 70% 69% 1ppt Operating lea
Slide 15: Cash returns to shareholders
Cash returns to shareholders £m 1,750 355 78 1,700 1,650 109 1,600 1,550 111 1,500 1,450 1,437 1,400 99 1,407 196 1,400 49 1,350 1,300 1,250 1,211 1,200 1,150 1,100 1,050 1,000 March Sep 2011 Operating Depn & Net Tax, Financing CAPEX March Dividends March 2011 Profit amort Working net int, 2012 (pre
Slide 16: Prudent yet flexible balance sheet management
Prudent yet flexible balance sheet management £m H1'12 H1'11 Property, plant and equipment 2,193 1,932 Goodwill and other intangible assets 452 451 Other assets 591 568 Liabilities (excluding debt) (1,772) (1,662) Capital employed 1,464 1,289 Debt 1,169 1,217 Cash and money market deposits (1,211) (
Slide 17: Business Review
Business Review Carolyn McCall Chief Executive 17 17
Slide 18: Strategy delivering
Strategy delivering 1 Deliver strong • Operational resilience foundations • Customer satisfaction 2 Deliver returns to • Dividend policy shareholder • Optimising network returns through framework for capital allocation • Improve returns through driving revenue and easyJet lean 3 Deliver sustainable
Slide 19: Operational resilience
Strong Operational resilience foundations On-time performance - arrivals within 15 minutes1) 2011 2012 94% 88% 91% 86% 91% 80% 86% 83% 89% • Further improvement in 76% 79% 70% 73% OTP in the first half 47% Oct Nov Dec Jan Feb Mar H1 OTP - rolling 12 months flights stats.com2) 83% 86% 80% 87% 8 8 % •
Slide 20: Customer satisfaction
Strong Customer satisfaction foundations Winter 2011/12 vs Winter 2010/11 • Overall satisfaction for the half has improved by 7 ppt to 85% • Likelihood to recommend is comparable to BA and double that of Ryanair Customer satisfaction scores 88% 86% 86% 85% 82% 78% 75% 43% H1 FY'11 H1 FY'12 H1 FY'11
Slide 21: Absolute focus on driving network returns
Deliver Absolute focus on driving network returns returns Overall rolling 12 months network ROCE improving despite higher fuel costs Key principles: • Routes below 12% must perform a role in the portfolio: • Support corporate strategy and provide product range • Competitive battles • Retain strategi
Slide 22: Building our business in France
Deliver Building our business in France returns • Regional bases in Nice and Toulouse opened Nice routes in March 2012 • Attractive markets – good inbound/ outbound • easyJet has built a cost and network advantage Nice Toulouse Operation launch 1996 2003 Toulouse routes No. Routes 23 17 Mkt. share /
Slide 23: Driving unit revenue
Deliver Driving unit revenue returns 1 2 3 Drive website visits Improve conversion Maximise yield • Introduced “Europe • easyJet.com • Demand driven by easyJet” improvements pricing model campaign: • Digital strategy rolled • Development of • Improved volumes out continuous pricing • Likelihood to •
Slide 24: Building on our strength in leisure
Deliver Building on our strength in leisure returns Improving demand • Strong year on year ski performance • More choice - leisure routes added including Iceland • Strong demand returning to Egypt and North Africa Improving for customers • Making it easy for families – a pre-travel checklist and inf
Slide 25: Progress on business traveller proposition
Deliver Progress on business traveller proposition returns GDS in place • deals signed with all GDS providers TMCs and corporate deals being added • vNett programme launched making payment easier for TMCs • TMCs signed include: Amex (pan-European), FCM, Hillgate, Portman Travel, OVP, 3Mundi, Amplitu
Slide 26: easyJet lean: crew
Deliver easyJet lean: crew returns Pilots • Progress made with flexibility in new Lisbon base • Beginning to roll out lifestyle and pay proposals to European pilots • UK four year lifestyle and pay deal recommended by BALPA but rejected by pilots Cabin crew • 39 month deal agreed with UK cabin crew
Slide 27: easyJet lean: airports and ground handling
Deliver easyJet lean: airports and ground handling returns Ground handling: • Renegotiating a third of Ground Handling contracts, Focus on: • the supply base to drive operational efficiencies • simplifying our product • introducing competition to remaining markets • Deals concluded across France, UK
Slide 28: easyJet turn driving savings
Deliver easyJet turn driving savings returns To improve OTP; easyJet turn was launched in November Aims Results • Remove inefficiencies in • Network OTP & programme stability handling whilst improving has significantly improved safety, OTP and the • Improved turn times leading to customer experience
Slide 29: Deliver sustainable returns and growth
Deliver sustainable Deliver sustainable returns and growth returns and growth • Clear strategy to maximise returns by market: maintain, invest or reduce • Efficiency review of current aircraft deployment • Ensure continued flexibility in fleet planning • Maintain competitive advantage • Low cost ope
Slide 30: Outlook
Outlook 30 30
Slide 31: Forward bookings in line with last year
Forward bookings in line with last year Forward bookings as at 6 May '12 FY'11 FY'12 47% 47% M ay Jun Jul Aug Sep H2 % Seats sold * 31
Slide 32: Outlook
Outlook Capacity (seats flown) • H2: +7% (assuming no disruption) • FY: +5% (assuming no disruption) Revenue per seat (constant currency) • H2: low to mid single digit Underlying cost per seat ex fuel (constant currency) • H2: up 2% (assuming no disruption) • FY: up 2% (assuming no disruption) Secon
Slide 33: Summary
Summary • Strong results against backdrop of uncertain economic conditions • Exceptionally low levels of disruption • Capacity discipline • Strong foundations • Market leading OTP • Improved customer satisfaction • Delivering returns and growth • £196m distributed to shareholders • Programme to driv
Slide 34: Appendix
Appendix 34 34
Slide 35: ROCE
ROCE Reported Multiple NPV 2011 2012 2011 2012 2011 2012 -2.8% -3.3% -4.3% -5.0% -5.2% -7.5% Reported Multiple (1) NPV (2) ROCE calculations (£m) Mar‟11 Mar '12 Mar‟11 Mar '12 Mar‟11 Mar '12 EBIT– reported -144 -99 -144 -99 -144 -99 Interest element of operating lease payments 18 17 18 17 Adjusted E
Slide 36: RASK and CASK
RASK and CASK £ H1'12 H1'11 Change B/(W) Total revenue per seat 50.47 45.11 11.9% at constant currency 50.16 45.11 11.2% RASK at constant currency (pence) 4.73 4.22 12.1% Total cost per seat ex fuel (37.70) (36.94) (2.1)% at constant currency (37.50) (36.94) (1.5)% CASK ex fuel at constant currency
Slide 37: 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