H1 2017 analyst & investor presentation Tuesday 16 th May 2017 - PowerPoint PPT Presentation

H1 2017 analyst & investor presentation Tuesday 16 th May 2017

Introduction Carolyn McCall Chief Executive Officer

easyJet is in a strong position Purposeful and disciplined growth; strengthening our market positions Network Improving revenue trend Strong cost control in H1 delivering flat headline CPS ex fuel (@cc) Cost T op ranked LCC in UK, Switzerland and France offering great value and Customer quality service Digital al and Continuous investment in customer proposition and lean initiatives data Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Balan ance Investment grade balance sheet provides flexibility and secures lower Sheet funding costs 3 3 3

Financial review Andrew Findlay Chief Financial Officer

Key performance indicators H1 2017 H1 2016 Change* Seats flown (m) 37.5 34.5 8.4% Passengers (m) 33.8 31.0 9.0% Load factor (%) 90.2% 89.7% +0.5ppt Average sector length (km) 1,058 1,054 0.4% Revenue per seat - reported currency (£) 48.80 51.29 (4.9%) Revenue per seat - constant currency (£) 46.32 51.29 (9.7%) Headline cost per seat incl fuel - reported currency (£) 54.45 51.91 (4.9%) Headline cost per seat incl fuel - constant currency (£) 49.79 51.91 4.1% Headline cost per seat excl fuel - reported currency (£) 42.18 38.54 9.5% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Headline cost per seat excl fuel - constant currency (£) 38.54 38.54 0.0% * Favourable /(adverse) 5 5 5

Financial performance H1 2017 17 H1 2016* 6* Chang nge** e** £ m m £ m m T otal revenue 1,827 1,771 3.2 % Headline costs: Headline costs excluding fuel (1,580) (1,330) (18.7) % Fuel (459) (462) 0.5 % Headline ne loss before e tax (212) (21) £(191) m Headline ne loss before e tax at c constant curren ency cy (130) (21) £(109) 9) m Non-headline items: Sale and leaseback charge (16) - £(16) m Organisational review (2) - £(2) m EU Air Operator Certificate (‘AOC’) (1) - £(1) m Balance sheet foreign exchange (loss)/gain (1) 2 £(3) m Fair value adjustment (4) 1 £(5) m Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Total loss before e tax (236) (18) £( £(218) ) m * Restated 6 6 ** Favourable/(adverse) 6

H1 Revenue performance Revenue per seat bridge (2.4%) £1.23 (7.3%) (4.9%) %) 4.8% £51.29 29 £3.74 £2.48 £48.80 (9.7%) %) Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold £46. 6.32 H1 2016 Easter Underlying Before ore FX FX H1 2017 market conditions 7 7 7

A strong focus on costs Headline cost per seat bridge • T otal headline cost per seat at constant currency: 4.1% decrease • Headline cost per seat ex fuel at constant currency: Remains flat Flat headline cost per seat ex fuel variance at constant currency 4.66 54.45 45 0.30 0.12 1.13 0.30 0.24 0.41 51.91 51.91 2.12 H1 2016 Disruption Ownership Regulated Inflation* A320 mix Lean H1 Fuel P&L Fx H1 2017 headline costs airports headline headline Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold cost per seat inflation cost per seat cost per seat (restated) at constant currency before fuel variance 8 8 * Operational price increases including unregulated airports, ground handling, navigation and crew costs 8

Impact of fuel & currency H1 2017 7 fuel l impac act H1 2017 H1 2016 Chang ange* e* Fuel el $ per metric ic tonn nne Market rate 500 409 (91) Effective price 662 786 124 US dolla lar rate te Market rate 1.24 1.48 (24 cents) Effective price 1.47 1.61 (14 cent) Difference between market rate and effective rate 0.23 0.13 Actual cost of fuel £ per metric tonne 449 489 40 H1 2017 7 currenc ncy impact pact on headlin dline PBT* EUR UR CHF USD Othe her Total tal £m £m Revenue 71 14 3 5 93 Fuel (1) - (37) - (38) Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Headline costs excluding fuel (96) (19) (16) (6) (137) Total (26) (5) (50) (1) (82) * Favourable /(adverse) 9 9 9

Strong cash generation Cash flow bridge • Net cash: £353m (FY16: £213m) • Adjusted net debt: £333m (FY16 restated: £424m) Cash generated from operations (excluding dividends): £560m Investing and financing 229 21 667 28 115 1,308 9 1,287 302 6 24 214 969 92 220 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Cash & Operating Depn & Net working Other Tax paid Ordinary Cash & Sale & Increased CAPEX Own shares Net FX * Cash & MMDs at loss amort capital operating dividend MMDs leaseback borrowings interest MMDs at 1 October (FY’16) post div & proceeds 31 March 2016* tax paid 2017 * *Includes money market deposits but excludes restricted cash 10 10 10

Strong balance sheet 30 Sept ptember mber 31 March h £m £m 2016 2017 (res estat tated ed) Goodwill and other intangible assets 533 517 Property, plant and equipment 3,314 3,252 Derivative financial instruments 123 98 Other assets (excluding cash and money market deposits) 367 324 Unearned revenue (1,298) (568) Other liabilities (excluding debt) (1,052) (1,142) Capital employed 1,987 2,481 Cash and money market deposits 1,308 969 Debt (955) (756) Net cash 353 213 Net assets 2,340 2,694 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Liquidity ity is support rted by the 5 500 millio ion US dollar ar Revolving ing Credit Facility ity that has no financial al covenants or draw-stops ops 11 11 11

Capital A321 – delivering cost & revenue benefits Discipline 30 A321 NEO’s added to fleet plan • Provides further structural advantage A319 CEO – 156 seats • Maximises constrained high value, peak-day flying • Will deliver an 8-9%* cost per seat A320 CEO – 186 seats benefit and incremental contribution per annum compared with A320 NEOs A320 NEO – 186 seats operating on easyJet’s network • Maintains a neutral capex commitment A321 NEO – 235 seats via increased flexibility within the Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold contract 12 12 *Based on current fuel price 12

Capital Discipline / Up-gauging delivering CPS savings Tough on cost Fleet up-gauging Delivering CPS savings easyJet fleet mix 100% 1% 1% 3% 6% A319 9 CEO O – 156 6 seats ts 9% 9% 11% 90% 28% 12% 21% 80% 7% % -8% % saving ing 31% Mix of fleet (%) 70% 73% A320 & A320 0 CEO – 180 0 seats ts 20% 49% A321 60% 45% 19% 50% 43% 6% % -7% % saving ing 40% A320 0 NEO O – 186 6 seats ts 30% 51% 43% 20% 37% 34% 8% % -9% % saving ing 27% 10% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold A321 NEO O – 235 5 seats 0% FY2017 FY2018 FY2019 FY2020 FY2021 A319CEO-156 A320CEO-180 A320CEO-186 A320NEO-186 A321NEO-235 1. At the end of the relevant Financial Year 13 13 2. Based on fleet plan – base case 13 3. Maximum fleet does not include the purchase rights

Utilising flexibility in fleet planning Revised base case fleet numbers Up and down side flexibility 370 370 364 360 360 Current max plan Prior base plan 357 350 350 338 343 343 340 340 Aircraft numbers 335 Current base plan Current base plan 330 330 327 327 320 316 320 312 310 310 301 298 304 304 300 300 296 296 Current min plan* 290 290 286 279 280 280 279 279 281 270 270 FY2017 FY2018 FY2019 FY2020 FY2021 FY2017 FY2018 FY2019 FY2020 FY2021 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold * With exercise of deferral options and all operating leases returned at maturity 14 14 14

Gross capital expenditure Prior ior cape apex x plan an: £1,0 ,050 50m c. £250m 0m reduct duction ion in CAPEX PEX in next xt 3 years £1,100 ,100m £650 50m • Revised Capex spend post £1,0 ,050 50m £950 50m £800 00m capacity review process • Profile represents new £700 00m schedule based on latest agreement with Airbus which includes A321 purchases • Maintenance capex is projected to remain stable over the next 3 years FY '17 FY '18 FY '19 FY '20 Maintenance & Other Replacement Growth Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold - Assumes base case fleet plan 15 15 15

Business Review Carolyn McCall Chief Executive Officer

Driving strategic delivery & Purposeful network strategy Differentiated proposition + Capital Discipline + T ough on cost Supported by Strong balance sheet = 50% dividend payout Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold & Long term shareholder returns 17 17 17