H1 2020 results presentation
introduction Joh ohan an Lundgr dgren en – CE CEO
easyJet - Positioned to win easyJ syJet et has been en decisiv cisive e in meeti eting ng the challe lenge nges s of Coronavi viru rus s to ensur ure e we can manage ge a a prolo longe nged d groundin nding g by: 1. Cutting costs 2. Delivering vastly reduced capex while retaining excellent fleet flexibility 3. Securing c.£2bn additional funding, in addition to the equity raise announced today Strong ong liquid uidity ity positi ition, on, test stim imon ony y to the streng ength th of easyJet yJet + its investmen estment t grade ade balan ance ce shee eet easyJ syJet et will be leadi ading ng the recovery: ry: 1. Strong H1 performance prior to COVID impact 2. Trusted easyJet brand outperforms competitors in value for money and drives customer confidence 3. easyJet’s industry leading network of European primary airports 4. Cost-out programme to deliver sustainable cost savings Competitively positioned as a more efficient airline to take advantage of opportunities in the European short haul market 3 3
Financial review Andr drew ew Findlay dlay – CF CFO
response to coronavirus Current cash position (as @ 22 June) Maximise £2.4 bn liquidity Does not t include lude fun unding ding from om: : • equity raise + £400m to £450m • SLB tran ansactio actions still to comp omplet ete e + c.£3 £300m Cost t Redu duction tions & Addi ditional tional fund nding ing Pay aymen ment t Terms rms Fleet eet Defer eferrals ls • Delivered c.£300m from SLB • c. 70% decrease in operating cost • Deferred 24 aircraft deliveries to transactions so far, with final cash burn during grounding post 2025 transactions to leave us at the top end of the £500m-£650m range • Payment term extensions • Increased short term flexibility negotiated with many of our major • Accessed a further £1.4bn in funding • Drove re-timing of pre delivery suppliers through; CCFF , RCF & term loans payments 5
Scenario planning - Updated T otal cash burn scenarios* 6 months 3 months Scenario io assumptio ions: grounding grounding • Refunds vs voucher/rebook ratios continue at a similar rate as those seen £1.0 bn £2.1 bn bn bn to date FX and fuel rates based on spot price as at 25 th May ’20 • • Assumes no material change to card acquirer arrangements Highli lights: s: Revenue/refunds • Cash burn slightly better than April forecast: • 3mth by c.£0.2bn, 6mth by c.£0.1bn, 9mth unchanged AP/AR unwind • Cash contributing flying programme resumed after 11 weeks, ahead of our 3 month Total Capex 9 months Capital (Inc fleet, other , IFRS16 & grounding base case scenario grounding maintenance ) £3.0 bn bn • Additional sources of funds continue to be explored to further boost liquidity Operating costs • Additional management actions being undertaken including business wide cost out programme to improve free cashflow generation * Starting point of 1 st April 2020 6
proposed equity placing > Firm placing of up to 9.99% of issued share capital > Additional placing of up to 5% of issued share capital, conditional on shareholder approval (ordinary resolution) EQUITY PLACING > Allocations expected to be split proportionally between the two placings > Expected gross proceeds c.£400m - £450m > Transaction launched 24 June after market close, settlement of firm placing 29 June (T+2) TIMING > General meeting to be held 14 July, settlement of conditional placing 15 July (T+14) > BNP Paribas JOINT GLOBAL COORDINATORS & JOINT BOOKRUNNERS > Credit Suisse Securities (Europe) Limited EASYJET PLC SHARE LOCK-UP > 180 day post-admission share lock-up for the Company, subject to customary exceptions • Proceeds will further enhance easyJet’s liquidity position and credit metrics, underpinning our balance sheet which is one of the strongest in the industry • Expected cash balance following the equity placing and final SLB proceeds to be in excess of c.£3bn, providing significant liquidity buffer to navigate further grounding or protracted recovery scenarios 7
Key performance indicators H1 2020 H1 2019 Chang ange* e* Seats flown (m) 42.7 46.2 (7.6)% Passengers (m) 38.6 41.6 (7.4)% Load factor (%) 90.3% 90.1% +0.2ppt Average sector length (km) 1,095 1,068 2.5% Revenue per seat - reported currency (£) 55.60 50.71 9.6% Revenue per seat - constant currency (£) 55.87 50.71 10.2% Headline cost per seat incl fuel - reported currency (£) 59.75 56.66 (5.5)% Headline cost per seat incl fuel - constant currency (£) 60.75 56.66 (7.2)% Headline cost per seat excl fuel - reported currency (£) 47.24 43.64 (8.2)% Headline cost per seat excl fuel - constant currency (£) 47.80 43.64 (9.5)% *Favourable/(adverse) 8 Per seat metrics exclude easyJet Holidays
Financial performance H1 2020 H1 2019 Chang ange* £ m £ m £m £m Total revenue 2,382 2,343 39 Headline costs: Headline costs excluding fuel (2,041) (2,016) (25) Fuel (534) (602) 68 Headline adline loss befor ore tax ax (193 93) (275) 75) 82 82 Headline loss before tax at constant currency (224) (275) 51 Non-headline items: Sale and leaseback gain 1 2 (1) Brexit-related costs - (4) 4 Commercial IT platform - 2 (2) Balance sheet foreign exchange gain 3 3 - Fair value adjustment (164) - (164) Total tal loss befo fore e tax (353 (3 53) (272 72) (81 81) 9 *Favourable/(adverse)
Revenue performance Reported ported RPS S +9.6 .6% RPS PS @ CC +10. 0.2% +8.3% -1.2% (£0.61) -0.6% £55.87 £55.60 (£0.27) c. 18k Flights cancelled in March due to £4.20 Coronavirus c. £0.2bn +2.0% Impact on total £1.01 revenue +1.1% £0.56 £50.71 H1 2019 Reported Thomas Cook Ancillary Underlying Trading Coronavirus H1 2020 @ CC FX H1 2020 Reported Administration 10 Excludes easyJet Holidays
HEADLINE cost PER SEAT Head adlin ine CPS S ex fuel el @ cc +9.5%, .5%, of which ich: Headline adline CPS S @ CC = 7.2% Headline adline CPS S ex fuel el @ CC = 9.5% 5% c.5.0% underlying £0.11 £0.15 £0.66 • £60.8 .81 £0.06 In line with guidance £60.75 .75 £1.00 • £0.99 Lower capacity growth £59.75 .75 for the half £1.22 • Ongoing, regulatory and inflationary pressure • Ownership costs £1.32 • Crew pay higher retention levels £56.6 .66 c.4.5% Coronavirus: H1 2019 Overheads Maintenance Ownership Crew Airports, Navigation H1 2020 Fuel H1 2020 P&L FX H1 2020 headline ne and Other ground headline ne headline ne headline ne • Cancellations cost per Income handling cost per cost per cost per seat and other seat @ CC seat @ CC seat • Full pilot & crew rosters operating before re fuel through March costs varianc nce * Operational price increases including unregulated airports, ground handling, navigation and crew costs 11 Excludes easyJet Holidays
Impact of fuel & currency H1 2020 fuel l impac act H1 2020 H1 2019 Chang ange* e* Fuel el $ per metric ic tonn nne Market rate 563 650 87 Effective price 638 645 7 US dolla lar rate te Market rate 1.28 1.29 1 cents Effective price 1.34 1.31 (3 cents) Difference between market rate and effective rate 0.06 0.02 Actual cost of fuel £ per metric tonne 476 493 17 H1 2020 curren ency y impac act t on headline adline PBT* EUR UR CHF USD Othe her Total tal £m £m Revenue (2) (1) - (10) (13) Fuel 2 - 17 - 19 Headline costs excluding fuel 25 (3) 2 1 25 Total 25 (4) 19 (9) 31 *Favourable /(adverse) 12
Cash FLOW bridge Net debt: bt: £467m 7m (H1 1 19: : £201m) 01m) 18 365 114 20 1,854 854 174 262 1,576 576 452 2 1,388 388 173 111 19 Cash h & MMC C at Operating loss Depn & amort Net working Other operating Tax paid Ordinary Cash Ca h & MMDs Sale & leaseback Cash Capex Repayment of Restricted case, FX 30 0 Septe tembe mber r capital Dividend (FY19) post t div & tax x proceeds capital element own shares and Cash h & MMD at 201 019 paid of leases net interest 31 March rch 202 020 Cash generated from operations Investing and financing (excl. dividends): £472m 13
balance sheet 31 March h 31 March h 30 Sept ptember mber £m £m 2020 2020 2019 2019 Goodwill and other intangible assets 613 551 561 Property, plant and equipment 4,823 4,286 4,661 Right of use assets 468 572 502 Derivative financial instruments (554) 48 63 Equity Investments 33 54 48 Other assets (excluding cash and money market deposits) 662 484 542 Unearned revenue** (974) (1,726) (1,069) Trade and other payables (1,660) (817) (1,050) Other liabilities (excluding debt) (852) (735) (947) Capital employed 2,559 2,717 3,311 Cash and money market deposits* 1,388 1,280 1,576 Debt (excluding lease liabilities) (1,319) (858) (1,324) Lease Liabilities (536) (623) (578) Net debt (467) (201) (326) 6) Net assets 2,092 2,516 2,985 *Excludes restricted cash 14 **Unearned revenue relating to departing flights in April and May has been reclassified as trade and other payables
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