Half Year Results Analyst and Investor Presentation Tuesday 13 May - PowerPoint PPT Presentation

Half Year Results Analyst and Investor Presentation Tuesday 13 May 2014

Introduction Carolyn McCall Chief Executive Officer

Strategy is delivering  Revenue performance in line with expectations Improving loss per seat and margins  Relentless focus on maintaining 0 0% 2011 2012 2013 2014 cost advantage -2% -1 -2.04 -1.70  Continuing to develop customer PBT / seat -4% -2 -3.1% 1% PBT margin -3.8% offering -6% -3.87 -3 -8%  Focus on #1 and #2 network -4 -7.6% -5.47 -10% positions -5 -12%  Rigorous approach to capital -12.1% 1% -6 -14% discipline, £308 million returned Loss per seat PBT margin to shareholders in the period 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

Financial review Chris Kennedy Chief Financial Officer 4

Loss before tax reduced Loss per seat bridge 0.38 -1.70 0.07 -2.04 0.45 0.07 0.93 0.29 0.83 1.60 H1 2013 Easter Revenue Fuel Costs De-icing FX easyJet A320 Mix H1 2014 and Lean disruption Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 5 5

Financial results H1’14 H1’13 Change Total revenue 1,702 1,601 6.3% Fuel (537) (496) (8.3%) Operating costs excluding fuel (1,101) (1,042) (5.6%) EBITDAR 64 63 1.2% Ownership costs (117) (124) 6.1% Loss before tax (53) (61) 13.6% EBITDAR Margin 3.7% 3.9% (0.2ppt) Loss before tax margin (3.1%) (3.8%) 0.7ppt Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 6 6

Financial results: Loss after tax reduced £m £m H1’14 H1’13 Change Loss before tax (53) (61) 13.6% T ax charge 12 14 (20.2%) Loss after tax (41) (47) 11.5% Loss per share 10.4p 12.0p 13.3% Return on capital employed* (1.2%) (0.9%) (0.3ppt) Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold * Return on capital employed (ROCE) measure includes leases capitalised at 7 times 7 7 The NPV ROCE measure with target liquidity included is shown in the appendix

Continuing revenue per seat growth £m H1’14 H1’13 Change Passengers (m) 27.6 26.6 4.0% 89.0% 88.6% +0.4ppt Load factor (%) Seats (m) 31.1 30.0 3.6% Average sector length (km) 1,074 1,042 3.1% 1,702 1,601 6.3% T otal revenue (£m) T otal revenue per seat (£) 54.80 53.39 2.6% @ constant currency (£) 54.16 53.39 1.5% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 8 8

easyJet strategy delivers further revenue growth Year on year drivers of revenue per seat change (£/Seat) 0.64 54.80 0.28 1.32 • Disciplined capital allocation 53.39 0.83 • Revenue Management System initiatives • Longer sector length • Increased load factor • Business • Digital Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold H1 13 Easter Underlying Trading Allocated Seating FX H1 14 9 9

Neutral currency impact Currency split – total revenue Currency split – total costs Sterling Euro 26% 33% 34% 35% Euro 44% Sterling 44% 5% Swiss Franc 1% 1% Other 1% 3% 8% 25% 35% USD Swiss Franc USD Other H1’14 currency impact favourable / (adverse) £m £m EUR CHF USD Total Revenue 17 3 - 20 Fuel (1) - (14) (15) Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Costs excluding fuel (6) - 3 (3) Total 10 3 (11) 2 Average effective Euro rate for revenue for H1’14 was €1.19 (H1’13: € 1.22) 10 10 Average effective Euro rate for costs for H1’14 was €1.20 (H1’13: € 1.22)

Impact of fuel H1’14 H1’13 Change B/(W) Fuel $ per metric tonne Market rate 994 1,041 47 Effective price 993 988 (5) US dollar rate Market rate 1.64 1.59 5 cents Effective price 1.58 1.61 (3 cent) Actual cost of fuel £ per metric tonne 629 613 (16) Cost per metric tonne is broadly flat, however changes in exchange rates have driven an increase in the actual cost per tonne Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 11 11

Cost per seat excluding fuel - key drivers £ var at % var at Favourable/ £ Cost per constant constant Drivers (Adverse) seat ex fuel currency currency • Decrease in de-icing costs following the milder weather conditions Airports and Ground • 15.20 0.38 2.5% Lean initiatives savings Handling • Annualisation of airport charges in Italy • Cost impact of higher load factor • Increase in salaries • Crew 7.43 (0.23) (3.2%) Longer average sector lengths • Partially offset by lean initiative savings • Navigation Longer average sector lengths 4.23 (0.10) (2.4%) • Increase in leased aircraft Maintenance 3.34 (0.35) (11.8%) • Increase in average fleet age • Higher share price related employee costs • Overhead IT and business related development 5.25 (0.17) (3.4%) investment. • Increasing lease costs Ownership 3.75 0.27 6.4% • Offset by ‘other financing’ 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 39.20 (0.20) (0.5%) 12 12

Management actions taken to control costs Cost per seat bridge Airports & Ground Handling – £0.29 56.93 93 0.57 0.45 Fuel burn initiatives - £0.07 56.50 0.09 0.07 0.38 0.44 0.29 0.40 55.43 Fuel H1 2013 Regulated Inflation De-icing & FX Before easyJet Lean A320 Mix Other H1 2014 Market price Airports disruption Management Action Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Exter terna nal Mana nage gemen ment factor ors acti tion ons 13 13

Increasing proportion of A320’s H1’14 H1’13 Change 54 49 5 A319 (operating lease) A319 (owned / finance lease) 99 105 (6) A319 T otal 153 154 (1) A320 (operating lease) 18 14 4 49 42 7 A320 (owned / finance lease) A320 T otal 67 67 56 56 11 11 T otal fleet 220 220 210 10 10 Operating lease 33% 30% 3ppt 39% 40% (1ppt) Percentage unencumbered Percentage of A320s in fleet 30% 27% 3ppt Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 14 14

Flexibility in fleet planning Maximum, minimum and base case fleet size under new framework agreement Contracted Max Base Case Contracted Min 303 300 290 289 269 263 284 284 277 248 272 269 239 263 248 226 239 238 234 235 226 191 187 177 173 170 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Flexible fleet arrangements to respond to appropriately to market conditions 1. At the end of the relevant Financial Year 15 15 2. Based on fleet plan – base case 3. Maximum fleet does not include the purchase rights

Strong balance sheet, low gearing £m £m H1’14 H1’13 Property, plant and equipment 2,416 2,192 477 456 Goodwill and other intangible assets Other assets 399 554 (2,080) (1,968) Liabilities (excluding debt) 1,212 1,234 620 761 Debt Cash and money market deposits (1,069) (1,194) Net cash (449) (433) 3) Shareholders' equity 1,661 1,667 Capital employed yed 1,212 1,234 Gearing* 18% 11% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 16 16 *Gearing defined as (debt + 7 x annual lease payments – cash) divided by (shareholders’ equity + debt +7 x annual lease payments – cash)

Cashflow £m £m Self funding ordinary dividend and capex 457 42 133 218 175 57 1,237* 53 43 2 20 1,069* Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Sep 2013 Operating Depn & Net working Tax, net Ordinary CAPEX Special Borrowings Restricted FX Mar 2014 loss amort capital int & other dividend dividend Cash 17 17 * Includes money market deposits but excludes restricted cash

Fuel and foreign exchange hedging US dollar Fuel requirement Euro Surplus requirement Six months ending 30 80% @ $963 / 91% @ $1.58/£ 77% @ € 1.20/£ September 2014 metric tonne Full year ending 30 79% @ $980 / 89% @ $1.58/£ 78% @ € 1.20/£ September 2014 metric tonne Full year ending 30 67% @ $950 / 75% @ $1.58/£ 61% @ € 1.17/£ September 2015 metric tonne Sensitivities • $10 per tonne change in fuel price will impact the second half pre-tax result by +/- $1.8 million • One cent movement in the £/$ will impact the second half pre-tax result by +/- £0.3 million • One cent movement in the £/ € will impact the second half pre-tax result by +/- £0.5 million Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 18 18 Table data as of 9 May 2014

Business review Carolyn McCall Chief Executive Officer