Slide 1: Interim results
Interim results 7 May 2008 easyJet pic
Slide 2: Introduction
Introduction Andy Harrison Chief Executive Officer 2
Slide 3: Winning in a tough environment
Winning in a tough environment 4 Underlying business strong and performing as expected • Good revenue growth, underlying cost per seat down 1% • GB acquisition; smooth integration and synergies ahead of plan • Forward bookings remain on track 4 High fuel price will prune the weaklings • Un-relenting
Slide 4: Finance review
Finance review Jeff Carr Group Finance Director 4
Slide 5: Good underlying H1 results
Good underlying H1 results 4 Pre-tax loss in line with expectations: £m • easyJet margins decline 2.4% (41) • GB Airways impact (February / March) (7) (48) 4 Underlying performance excludes one-off integration costs of £9.1m* 4 Revenue and unit cost measures affected by: • Increased GB Airways secto
Slide 6: Underlying profit performance
Underlying profit performance £m H1 ‘08 H1 ‘07 Change Total revenue 892 719 24% Operating costs (881) (680) 30% EBITDAR * 11 40 (72)% Finance and ownership (59) (57) (5)% Pre-tax loss * (48) (17) (182)% Margin * (5.4)% (2.4)% (3.0)pp Loss per seat £ * (2.08) (0.85) (1.23) Impact from GB Airways (£7.
Slide 7: Pre-tax change per seat build up
Pre-tax change per seat build up Pence per seat 10 £0.52 (£0.85) (90) £0.75 (£2.49) (£2.09) (190) (£0.27) (85)p 53p 24p 19p (218)p (1)p (208)p (290) el ) e fx l at at ue el u fu se se cl fu en .f in c x ex r r ev ex pe pe (e el R t Fu s os ct it it ay of of pa C rw pr pr im Ai 07 08 FX B 20 20 G 1 1
Slide 8: Passenger revenue
Passenger revenue H1 ‘08 H1 ‘07 Change Passengers (m) 18.9 16.4 14.7% Load factor (%) 81.2 81.2 - Seats (m) 23.2 20.2 14.7% Passenger revenue (£m) 751 642 17.0% Passenger revenue per seat £32.32 £31.70 2% ex GB impact £31.63 £31.70 (0.2)% @ constant exchange and ex GB £30.15 £31.70 (4.9)% Total reve
Slide 9: Ancillary revenues – continued growth
Ancillary revenues – continued growth H1 ‘08 H1 ‘07 Change Ancillary revenue (£m) 141 77 83% Per seat £6.07 £3.81 59% Change per seat vs 2007 Baggage / sporting goods 282% Card fees 7% Partner revenues 0% Speedy boarding and other discretionary 24% charges Inflight 31% 9
Slide 10: Cost per seat – progress excluding fuel
Cost per seat – progress excluding fuel Change vs H1 ‘07 H1 ‘08 Reported ex GB Constant currency * Overheads £4.14 2% (2)% (19)% Ownership £2.56 (9)% (19)% (13)% Navigation £3.50 15% 12% 2% Airports / handling £11.14 9% 9% 3% Maintenance £2.53 10% 7% 8% Crew £5.25 11% 9% 8% Fuel £11.36 24% 21% 28% T
Slide 11: Cost per seat – key drivers
Cost per seat – key drivers change vs H1 ’07 Constant Drivers currency * Overheads (19)% Continue to leverage increasing scale Ownership (13)% Mix benefit from higher proportion of lower cost A319 in fleet Navigation 2% Longer sector lengths, (3% reduction per ASK) Airports / handling 3% Airport pri
Slide 12: Jet hedging position for FY '08
Jet hedging position for FY ‘08 US$ per tonne Jet Hedging Position Oct 07 - Sep 08 Forward curve* 1220 4 Put forward curve on 1160 this charts 1100 1040 980 920 860 12% Call Options $855 800 740 680 28% Forwards $704 620 560 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 4 Average ef
Slide 13: US$ hedging position for FY '08
US$ hedging position for FY ‘08 US$:£ Forex Hedging Position Oct 07 - Sep 08 2.10 4 Put forward curve on this charts 2.00 66% Forwards @ 1.97 1.90 14% Collars @ 1.74 - 1.83 1.80 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 4 Average effective USD rate was $1.96 in H1 ’08; up from $1.87 in
Slide 14: Net income, EPS, ROE
Net income, EPS, ROE £m H1 ‘08 H1 ‘07 Change Pre-tax loss (underlying) (48) (17) (182)% easyJet (41) - - GB Airways (7) - - One-off acquisition costs (9) - - Pre-tax loss (reported) (57) (17) (236)% Tax 14 4 223% Net loss (43) (13) (241)% EPS (basic) underlying (8.8)p (3.1)p (5.7)p ROE (rolling 12 m
Slide 15: Modern, fuel efficient fleet
Modern, fuel efficient fleet Mar ‘08 Sep ‘07 Change B 737-700 (operating lease) 30 30 - A 319 (operating lease) 46 46 - A 319 (finance lease) 6 6 - A 319 (owned) 60 55 5 112 107 5 GB Airways A320 (operating lease) 9 - 9 GB Airways A321 (operating lease) 1 - 1 GB A321 (owned) 5 - 5 15 - 15 Total flee
Slide 16: Good cash generation
Good cash generation £m £220m £45m (£46m) 1,100 (£96m) (£135m) 1,000 £913m (£72m) £21m 900 £850m 800 700 600 er l 8 s g t. x ta ss 7 ay '0 cin pe or th '0 pi lo am O rw ar ca p ca n g Se na M & Ai tin et ng & Fi h t. B h ra N n in as ki as G ep pe or et C C D O w N et x, N Ta H2 capex circa £180m, $
Slide 17: Strong balance sheet
Strong balance sheet £m Mar ‘08 Sep ‘07 Fixed assets 1,133 936 Cash & money market deposits 850 913 Goodwill and other intangible assets 432 311 Other assets 540 355 Total assets 2,956 2,516 Debt 566 519 Other liabilities 1,227 845 Shareholders’ funds 1,163 1,152 Total equity and liabilities 2,956 2
Slide 18: Business review
Business review Andy Harrison CEO
Slide 19: Painting Europe orange
Painting Europe orange 4 Fleet • Accelerate return of high cost Boeing and GB sub-fleets • Focus on flexible, low cost dual gauge fleet 4 European network development • Low fares • Convenient airports • Quality schedule 4 Focus on margins • Maximise revenue opportunities whilst maintaining low fares
Slide 20: Fleet – accelerated rationalisation
Fleet – accelerated rationalisation 4 Accelerated fleet rationalisation to reduce costs • Tender underway for sale of expensive GB A321 • Exit high cost 30 Boeing 737’s at earliest opportunity 4 Decision taken in principle to discuss with Airbus the conversion of some A319 orders to A320 aircraft •
Slide 21: Growing in mainland Europe
Growing in mainland Europe 4 Substantial valuable opportunities Average fare H108 • Italy - Legacy incumbent crumbling • Spain – weak fragmented domestic players • France – high fares, lack of France Swit zerland London Germany UK regions It aly / Spain competition, little LCC penetration 4 Strong g
Slide 22: France – an opportunity to grow the market
France – an opportunity to grow the market 4 Exciting opportunity • LCC penetration 50% of European average • Industry structure has suffocated market with high costs and high fares • easyJet no.2 short haul airline in France 4 Picture of base opening 4 Growth focused on Paris • Departing pax. up by
Slide 23: Italy – weak legacy incumbent
Italy – weak legacy incumbent 4 Growth focused on Milan Malpensa 4 Picture 4 Picture • Departing pax. up by 58% 4 Insert pictures • 10th aircraft announced for Summer ‘08 4 21 routes, new with load factors above 80% over Winter ’07 / ‘08 4 Domestic routes particularly strong Milan Malpensa market sh
Slide 24: Spain – market will consolidate
Spain – market will consolidate 4 Capacity in Madrid increased by 79% to 6 aircraft 4 Improving load factors >80% in March • Euro city and island routes particularly successful 4 Weak domestic players struggling Madrid market share* 2008 2007 Deployed capacity summer • Vueling Iberia – No.1 46% 43%
Slide 25: UK – easyJet is No.1 airline
UK – easyJet is No.1 airline 4 UK market share is 18%* 4 Growth focused on London • Development of Gatwick and Luton catchments • Departing pax. up by 7% in H1 2008 4 New North West base at Manchester with 6 routes 4 Belfast capacity increased in face London market share* 2008 2007 of competitive en
Slide 26: Focus on margins – network
Focus on margins – network Rigorous performance management 4 29 routes added • GB Airways destinations • French regionals • Greek Islands • Italian domestics 4 11 non-performing routes culled • Gdansk • Liverpool and East Midlands to Cologne 4 Schedule and frequency optimisation • Capacity reduction
Slide 27: Focus on margins – revenue initiatives
Focus on margins – revenue initiatives 4 New launches • Speedy Boarding plus Dedicated check-in at 30 major airports • easyJet plus Unlimited Speedy Boarding for annual charge • Checked bag charge introduced 4 Drive existing initiatives harder • Partner revenues Drive conversion rates • In-flight Im
Slide 28: Focus on margins – costs
Focus on margins – costs Continue to improve efficiency and squeeze costs 4 Accelerated fleet rationalisation • Return leased Boeings and GB A320’s; sale of GB A321’s • Ownership cost savings of c. £40m by 2011 4 Target improved crew efficiency • 10% productivity improvement by 2011 • Savings of c.
Slide 29: Focus on margins – deliver GB synergies
Focus on margins – deliver GB synergies 4 Timing of synergies Immediate Medium term (F’09) Longer term Overhead costs Engineering Aircraft ownership costs Franchise fee Crew cost Network optimisation Ancillary revenues Ground handling Insurance 4 Overhead reductions now complete (Beehive will be exi
Slide 30: Overall market capacity growth slowing
Overall market capacity growth slowing % growth versus the prior period 12% 12% 10% 10% 8% 8% 6% S'07 6% S'07 W'07/08 4% W'07/08 4% S'08 S'08 2% 2% 0% 0% Total market easyJet routes competitor growth -2% Total market easyJet routes competitor growth -2% excl. charter on easyJet routes excl. charter
Slide 31: Forward bookings remain on track
Forward bookings remain on track Forward bookings as 05/05/08 seats sold % 70 60 50 2008 40 2007 30 20 10 e st ly r ay be n Ju gu Ju M m Au e pt Se Bookings are robust across all customer segments 31 31
Slide 32: Outlook statement
Outlook statement easyJet’s underlying business remains strong with forward bookings for the summer slightly ahead of last year. Revenues will continue to benefit from a strong euro and the integration of the longer sector GB Airways routes. Pressure on costs will continue, not least from the unjust
Slide 33: Summary
Summary 4 easyJet continues to grow in size and strength • Relentless focus on cost and efficiency • Europe’s No.1 air transport network continues to develop • GB acquisition successfully completed and continued growth in mainland Europe • Cost opportunities in fleet, fuel burn and crew 4 In a susta
Slide 34: 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
Slide 35: Appendix
Appendix easyJet pic
Slide 36: Key measures per ASK
Key measures per ASK £m H1 ‘08 H1 ‘07 change Total revenue 3.81 3.76 1% Total cost excl. fuel 2.89 2.88 - Total cost 4.01 3.85 4% Loss (0.21) (0.09) 131% Average sector length (kilometres) 1,009 944 6.9% 36