Analyst & Investor presentation 3 months to 30 June 2014 24 - PowerPoint PPT Presentation

Q3 FY’14 IMS Analyst & Investor presentation 3 months to 30 June 2014 24 July 2014 1 1

Continued solid performance 1. Drive demand, conversion and yields across Europe • Passenger numbers up by 9.4%; load factors remain high at 90.4% • Revenue per seat up by 2.7% (1) 2. Maintain cost advantage • Acceleration of cost savings initiatives • Cost guidance for the half upgraded from c.+2% to c.+0.5% 3. Build strong number 1 and 2 network positions • Investment in capacity at London Gatwick, +16%, and Rome Fiumicino, +7% 4. Disciplined use of capital • Rolling 12 month ROCE continues to improve 2 2 (1) At constant currency

easyJet strengthens positions at key primary airports easyJet yJet is incr creasin easing g summer mer capacity ity by 6.4% 6% 6% 5% 5% 50% 50% 6% 6% Driven by purchase of the Flybe slots and allocation 6% 6% of new slots which became available Flybe slots c. 40% 8% 8% 9% 9% 10% Gatwick Hamburg Basel Geneva Naples Nice Rome Other easyJet et market ket No.1 .1 No.3 .3 No.1 .1 No.1 .1 No.1 .1 No.1 .1 No.2 .2 position Continuing to invest in No.1 and No.2 positions 3 3

Step change in position at Gatwick easyJet market share at • c.15% summer capacity growth at Gatwick Gatwick • 23 May 2013 acquired slot pairs from Flybe • 30 March 2014 started to operate the slots 57% • Secured additional slot pairs from Gatwick 55.8% 0.4% 56% 2.4% Airport runway efficiency programme 55% • Opportunity to optimise slot portfolio from 2015 onwards 54% 0.2% • Route maturity 52.8% 53% • Re-allocate 40% of slots to optimal routes 52% • easyJet’s future competitiveness at London 51% Gatwick underpinned by seven year deal 50% • Single terminal operation will deliver a step change FY13 H2 A320 Mix Flybe Slots Slot FY14 H2 allocation in customer experience and operational efficiency Source: OAG 4 4

Third quarter revenue per seat performance (1) Competitors on easyJet markets H2 2014 c.15% easyJet capacity H2 2014 Direction of easyJet Q3 RPS (2) 7.4% 5.6% 2.8% 2.2% -0.1% (3) Gatwick United Kingdom (less LGW) Rest of Europe Yield pressure at Gatwick driven by increased easyJet capacity (1) OAG, June 2014 5 5 (2) At constant currency (3) Includes Heathrow

Revenue growth in the quarter Q3 ‘14 Q3 ‘13 Change Passengers (m) 17.9 16.4 9.4% Load factor (%) 90.4 88.2 2.2ppt Seats flown (m) 19.8 18.6 6.8% Average sector length (km) 1,118 1,109 0.9% Seat revenue (£m) 1,223 1,122 9.0% Non-seat revenue (£m) 17 20 (12.1)% Total revenue (£m) 1,240 1,142 8.6% Total revenue per seat (£) 62.47 61.44 1.7% @ constant currency (£) 63.09 61.44 2.7% 6 6

Maintain cost advantage Q3 FY’14 Reported Constant currency 1.3% 1.0% Cost per seat excluding fuel decrease increase Drivers ers of cost perform rformance ance in Q3  Ground handling costs down × Increase in airport charges mainly in Italy  Disruption costs down × Higher maintenance costs due to • Pre-emptive cancellations planned ageing of the fleet and the controlling costs increase of leased aircraft in the fleet  Lower de-icing cost coming from milder weather Cost performance better than guidance 7 7

easyJet is well placed to succeed Customer focused Sustainable cost savings  Differentiated pricing model 2015 2016 2017 2018 2019  Significant focus on digital and data Engineering &  Friendly service Maintenance  End to end customer experience Airport deals  Growing brand affinity Engine selection  Convenient airports and schedule Up-gauging Investing in the network Strong balance sheet 56.9% 2011 market share 30.0% 48.9% 47.5% 2014 market share easyJet 25.0% 42.3% 21.5% 40.4% 40.6% 36.3% 20.0% 31.6% Adj. ROCE 1 Ryanair 26.0% 15.6% Lufthansa 15.0% 11.6% 21.3% IAG 8.3% 10.0% 9.3% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 6.8% Air France Norwegian 5.0% 2.5% 3.1% Gatwick Fiumicino Nice Malpensa Geneva Basel 0.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% No1 No2 No1 No1 No1 No1 Adj. Gearing 1 Strong balance sheet Source: OAG full year - Data based on 12 month period ending 31 March 2014 8 8 - Includes capitalised leases capitalised at 7.0x - Bubble represents size of EBIT

New base openings to drive growth and returns EZJ Amsterdam 46m seats Other LCC 51m seats • Opening in spring 2015 with 3 based aircraft Non-LCC transfer (est) 26m seats Non-LCC P2P • easyJet already has a No.2 position at (est) 86m seats Amsterdam with a 9% market share • Important primary airport in the easyJet network with 4 million seats of easyJet’s existing capacity touching Amsterdam • easyJet already flies 20 routes which touch Amsterdam Porto • Opening in spring 2015 with 2 based aircraft • Builds on existing presence in Portugal, easyJet already flies 6 routes to Porto • Porto base will provide additional network flexibility Pie chart data source: 9 9 Based on easyJet’s top 20 airports. Market size sourced from OAG based on easyJet definition of short-haul routes; estimates of transfer traffic obtained from airport and company external announcements. P2P = point to point,; LCC = Low cost carrier

Continued improvement in returns Capaci acity chan ange ge total al shor ort-hau aul market ket 4.3% 2.8% 1.3% 0.0% Returns 2011 2012 2013 2014 Source: OAG ROCE 12% Routes 12m to 12m to 30/6/20 2012 12 30/6/20 2014 14 12m to 12m to 30/6/20 2011 11 30/6/20 2013 13 easyJet’s strategy continues to deliver increasing returns Returns analysis defined as normalised profit after tax divided by average net debt plus average shareholders’ equity 10 10

Forward bookings ahead of prior year % Seats sold * 90% Summer 13 Summer 14 88% 77% 75% Q3 Jul Aug Sep H2 H2 (April 20‘14 to September 2014) 11 11 * As at 16-07-14

Hedging update Euro Fuel US Dollar requirement requirement surplus Three months to 30 September 2014 83% 91% 80% $968 metric Average rate $1.58 € 1.21 tonne Full year ending 30 September 2014 80% 89% 79% $980 metric Average rate $1.58 € 1.20 tonne Full year ending 30 September 2015 71% 80% 65% $951 metric Average rate $1.58 € 1.17 tonne Sensit itivit ivities ies FY14 • $10 per tonne movement in the price of jet fuel will impact the full year pre-tax result by +/-$1.0 million • 1 cent movement in the £:$ will impact the full year pre-tax result by +/-£0.2 million • 1 euro cent movement will impact the full year pre-tax result by +/-£0.2 million As at 22-07-14 12 12

Outlook Capacit city y (seats s flown) • H2: c.+6.4% (before disruption) Revenue per seat (constan ant currency) • H2: c.+1% (assuming normal disruption levels) Cost per seat ex fuel (constan ant currency) • H2: c.+0.5% (assuming normal disruption levels) FX FX • H2: FX to be up to £15 million favourable (1) Fuel H2: unit fuel cost to be up to £5 million adverse (2,3) • Full year result • easyJet expects to grow profit before tax from £478 million for the year to 30 September 2013 to a range of £545 million to £570 million for the year to 30 September 2014 assuming no further significant disruption • This range includes the impact from the situations in Israel, Egypt and Moscow Due to the strength of its network, customer proposition, low cost base and strong balance sheet the Board is confident of easyJet’s ability to continue to build profitable positions across Europe and deliver sustainable growth and returns for shareholders  (1) Based on spot rates:, US $ to £ sterling 1.7068, euro to £ sterling 1.2658 Jet cif $952 per metric tonne as at noon on 22.7.14  (2) Assuming fuel at around $1,000 per metric tonne 13 13  (3) Unit fuel calculated as the difference between latest estimate of FY’14 fuel costs less FY’13 fuel cost per seat multipl ied by FY’14 seat capacity

Summary • Solid revenue performance in the quarter despite a less benign capacity environment • Some short-term impact from step change in capacity at London Gatwick • Better than expected cost performance • Disciplined growth of network to deliver sustainable growth and returns 14 14

easyJet – upcoming events • 18 September 2014 – Capital Markets Day, 2pm London • 3 October 2014 – Pre-close statement • 18 November 2014 – Full Year Results 15 15

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