H1 2015 Results Analyst and Investor Presentation Tuesday 12 May 2015
Introduction Carolyn McCall Chief Executive Officer
Proven strategy, execution and returns Good revenue performance in Continued improv ovement in w winter perform orman ance the first half, benefitted from 20 2.0% 7 Easter in the second quarter 0 0.0% -61 -53 -153 -113 0.2% Loss or profit before tax -20 Disciplined approach to PBT margin -2.0% -40 capacity allocation -4.0% -60 -3.1% -3.8% Performance benefitted from -80 -6.0% -100 fuel and foreign exchange -8.0% -120 -7.6% -10.0% Focus on building strong -140 -12.0% network positions with new -160 -12.1% -180 -14.0% base openings 2011 2012 2013 2014 2015 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Improved winter performance 3 3 3
A business model which is hard to replicate Digital leadership Unique network 53% 2011 market share 50% 47% 2015 H1 market share 43% 42% 40% 36% 32% 29% 27% 25% 21% Gatwick Edinburgh Nice Malpensa Geneva Basel No1 No1 No1 No1 No1 No1 Cost advantage Financial strength 5.0% 25% 4.9% easyJet 21.6% 4.0% 4.5% 20% 19.9% 15% 3.0% IAG 3.3% 3.3% Ryanair 12.0% ROCE 10% 2.0% 2.4% 8.5% Lufthansa 5% Group 1.0% 0.9% AF-KLM Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 0% Norwegian -1.4% 0.0% -0.7% Air Berlin 1 -5% easyJet ea et Ryanair Ry air Nor orwegian egian Vuel eling* g* -5% 15% 35% 55% 75% 95% 115% Sector-length adjusted CASK incl-fuel (CAGR Sep 2011-2014) Source: Airline Analyst / easyJet analysis * Vueling CASK CAGR is over the period Dec-10 to Dec-13 Gearing Source: Unique network data from OAG scheduled data, as at 6 April2015 4 4 4
Financial review Chris Kennedy Chief Financial Officer
Result before tax increased Profit/(loss) per seat bridge 3 (0.61) 0.17 0.63 2 (1.28) 0.34 1.07 1 0.21 0 -1 0.55 -2 1.04 (1.70) H1 2014 Fuel ex FX Revenue Easter easyJet A320 Mix Crew Other H1 2015 A320 mix ex Easter revenue lean resilience, costs de-icing and disruption Extern rnal al factors rs Manage gement actions Robust demand Increased capacity easyJet lean initiatives Capital allocation Fuel price Engine selection Revenue management Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Foreign exchange system A320 mix x Winter weather Digital and data Managing disruption x Regulated airport charges Allocated seating Airport deals x Disruption 6 6 6
Financial results: Result before tax increased £m £m H1 2015 H1 2014 Change Change Total revenue 1,767 1,702 65 3.8% Fuel (516) (537) 21 3.9% Operating costs excluding fuel (1,121) (1,101) (20) (1.8%) EBITDAR 130 64 66 103.8% Ownership costs (123) (117) (6) (5.5%) Profit/loss before tax 7 (53) 60 n/a EBITDAR Margin 7.3% 3.7% 3.6ppt Profit/(loss) before tax margin 0.4% (3.1%) 3.5ppt Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 7 7 7
Financial results: Increase in EPS £m £m H1 2015 H1 2014 Change Profit/(loss) before tax 7 (53) 60 Tax credit/(charge) (2) 12 (14) Profit/(loss) after tax 5 (41) 46 Earnings/(loss) per share 1.3p (10.4p) 11.7p Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 8 8 8
Revenue per seat growth in the first half £m £m H1 2015 H1 2014 Change Passengers (m) 28.9 27.6 4.4% Load factor (%) 89.7% 89.0% +0.7ppt Seats (m) 32.2 31.1 3.6% Average sector length (km) 1,072 1,074 (0.2%) Total revenue (£m) 1,767 1,702 3.8% Total revenue per seat (£) 54.91 54.80 0.2% @ constant currency (£) 56.21 54.80 2.6% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 9 9 9
easyJet strategy delivers further revenue growth Year on year drivers of revenue per seat change (£/Seat) 0.27 1.30 0.34 0.80 • Yield management of bags • Performance of allocated seating 54.91 54.80 • Disciplined management of capacity • Digital and Revenue Management System developments • Increased load factor Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold H1 2014 Underlying Easter Initiatives FX H1 2015 trading 10 10 10
Growth in RPS vs. capacity At c constant £ p per seat H1 2015 H1 2014 Chang nge currency ency Gross seat revenue 61.12 61.00 0.2% 2.7% Passenger taxes (7.07) (7.12) 0.7% (3.4%) Net seat revenue 54.05 53.88 88 0.3% 2.6% Non-seat revenue 0.86 0.92 6.2% (1.9%) Total l revenue 54.91 54.80 80 0.2% 2.6% 4.3% 3.7% 3.6% 2.9% 2.6% RPS growth at constant currency easyJet capacity growth 1.4% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Q1 Q2 H1 11 11 11
Revenue per passenger increase At £ per passenge ger H1 2015 H1 2014 Change constant currency Gross seat revenue 68.13 68.54 (0.6%) 1.9% Passenger taxes (7.88) (8.00) 1.4% (2.6%) Net seat revenue 60.25 60.54 (0.5%) 5%) 1.8% Non-seat revenue 0.96 1.03 (7.0%) (2.7%) Total l revenue 61.21 61.57 (0.6%) %) 1.8% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 12 12 12
Currency impact Currency split – total revenue Currency split – total costs Euro, 31% Sterling, Euro, 43% 46% Sterling, 27% USD, 35% Swiss Franc, 8% USD, 1% Other, 1% Swiss Franc, Other, 2% 6% H1 2015 currency impact favourab able le / ( (advers rse) EUR CHF US USD Other Total Revenue (35) (4) 1 (3) (41) Fuel (1) - 6 - 5 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Costs excluding fuel 50 - 2 2 54 Total 14 14 (4) (4) 9 (1) 18 18 13 13 Average effective Euro rate for revenue for H1’15 was €1.24 (H1’14: € 1.19) 13 Average effective Euro rate for costs for H1’15 was €1.30 (H1’14: € 1.20)
Weakening of the euro GBP: euro rates (spot) 1.45 Key booking period FY 2014 1.40 FY 2015 1.35 Impact act of € /£ rate e on P&L £m £m Q1 Q1 Q2 Q2 H1 H1 1.30 Revenue (22) (13) (35) Fuel 1.25 1 (2) (1) Costs excluding fuel 19 31 50 1.20 Total (2) 16 14 1.15 1.10 Oct Nov Dec Jan Feb March Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Continued weakening of the Euro versus Sterling during H1 2015 with bookings posted at a lower rate than the cost incurred 14 14 Table data as of 7 April 2015 14
Impact of fuel Chan ange ge H1 2015 H1 2014 B/(W) /(W) Fuel $ p $ per metric tonne Market rate 707 994 287 Effective price 925 993 68 US dollar ar rate Market rate 1.55 1.64 -9 cents Effective price 1.59 1.58 1 cents Actual cost of fuel £ per metric tonne 581 629 48 Significant market fuel price reductions have not been fully reflected in the Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold effective (post- hedge) price due to the operation of easyJet’s hedging 15 15 15
Cost per seat excluding fuel - key drivers Cost Variance Variance per seat at at Weighting excluding Constant Constant of variance Drivers fuel Currency Currency £ £ % % Charges at regulated airports increased as anticipated, • primarily in Germany and Italy Increase in de-icing costs following the more adverse • Airports and Ground handling 14.88 (0.49) (3.2%) (1.2%) weather conditions compared to prior year Offset by savings of new airport and ground handling • contracts and lean initiative savings • Pay increase broadly in line with inflation Increase in salaries due to the early recruitment of crew to • Crew 7.40 (0.18) (2.4%) (0.4%) build a resilient operation ahead of the three new crew base openings • Navigation 3.99 (0.11) (2.6%) (0.3%) Inflationary increases • Benefit of the revised engine contract Maintenance 3.22 0.07 2.1% 3.7% Offset by increase in average age of the fleet, ahead of • delivery of the new generation aircraft from 2017 • Overhead 5.34 (0.19) (3.6%) (17.2%) Higher disruption costs • Depreciation on new aircraft purchased Ownership 3.96 (0.07) (1.8%) (3.3%) • Offset against decreasing lease costs The effect of movements in foreign exchange rates on • Net Exchange gains/(losses) (0.13) (0.16) (100.0%) (0.4%) Balance sheet revaluation Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Total CPS excluding fuel 38.66 (1.13) (2.9%) (2.9%) Total CPS including fuel 56.54 (0.04) (0.1%) (0.1%) 16 16 NB: This year’s net exchange gain/loss at constant currency is, by definition, always zero. Therefore, the variance at consta nt currency represents the prior year exchange gain/loss, and the percentage variance will always be 100%. 16
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