Full Year Results Analyst and Investor Presentation Tuesday 19 November 2013
Introduction Carolyn McCall Chief Executive Officer
Continued strong performance Strong performance Platform for growth 17.4% Efficient, low cost model 17% 7% ROC OCE Strong network and market positions 11.3% 9.8% easyJet.com and pan-European brand Strong balance sheet Management innovation & execution 2011 2012 2013 Cash h retur turns ns to shar areh eholder olders £308m Special Ordinary £196m 175 Deliver returns to shareholders £85m 150 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 133 £308m to be returned to shareholders through 85 85 46 46 ordinary & special dividend (77.6p/share) 2011 2012 2013 3 3
Financial review Chris Kennedy Chief Financial Officer 4
Strong performance in the year External factors – largely favourable Strong performance Benign competitor capacity • 51% rise in PBT Buoyant demand in UK • £7/seat PBT • Weather 11% PBT margins • FX rate movements £1 EPS • Cost increases at regulated airports £616m operating cashflow • 17% ROCE Profit progression (PBT £/seat) Management action – step change Madrid base closure PBT margin PBT/seat £ PBT / seat £ Margin % Allocated seating 11.2% 8 12% easyJet.com & Digital 10% 8.2% 7.03 easyJet Lean 7.2% 6 8% A320 mix 6% 4.81 4 4% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 3.97 2% 2 - 2011 2012 2013 5 5
Financial results £m £m F ' '13 F ' '12 Change Change Total revenue 4,258 3,854 404 10.5% Fuel (1,182) (1,149) (33) (2.9%) Operating costs excluding fuel (2,365) (2,174) (191) (8.8%) EBITDAR 711 531 180 33.8% Ownership costs (233) (214) (19) (8.6%) Profit before tax 478 317 161 50.9% EBITDAR Margin 16.7% 13.7% 3.0ppt Profit before tax margin 11.2% 8.2% 3.0ppt 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: £1 EPS, 17% ROCE £m £m F '13 F '12 Change Profit before tax 478 317 50.9% T ax charge (80) (62) (28.4%) Profit after tax 398 255 56.1% Effective tax rate 16.7% 19.6% 2.9ppt Earnings per share 101.3p 62.5p 62.1% Ordinary dividend per share 33.5p 21.5p 55.8% Special dividend per share 44.1p - - Return on capital employed 17.4% 11.3% 6.1ppt Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 7 7
Strong unit revenue growth £m F '13 F '12 Change Passengers (m) 60.8 58.4 4.0% Load factor (%) 89.3% 88.7% +0.6ppt Seats (m) 68.0 65.9 3.3% Average sector length (km) 1,091 1,096 (0.5%) T otal revenue (£m) 4,258 3,854 10.5% T otal revenue per seat (£) 62.58 58.51 7.0% @ constant currency (£) 62.65 58.51 7.1% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Source: 8 8 Competitor capacity from OAG using an easyJet definition of overlapping markets. This excludes charter capacity.
RPS: strong growth in seat revenue £ per seat F '13 F '12 Change Gross seat revenue 68.66 64.37 6.7% Passenger taxes (7.02) (6.76) (3.9%) Net seat revenue 61.64 57.61 7.0% Non-seat revenue 0.94 0.90 3.8% Total revenue 62.58 58.51 7.0% 9.2% 8.5% 8.0% 7.7% 7.1% 7.0% 6.7% 6.3% 6.1% 3.9% Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Q1 Q2 Q3 Q4 FY RPS growth @ constant currency RPS Growth Reported 9 9
Timing of Euro: Sterling movement drove adverse fx GBP: Euro rates (spot) 1.30 FY13 FY12 Impact of € /£ rate on P&L £m H1 H2 1.25 Rev (36) 31 Fuel 3 (2) Cost ex. Fuel 3 (36) 1.20 Total (3 0) (7) P&L impact shown after 1.15 effects of hedging cashflows Key booking Peak period expenditure 1.10 1.05 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Sharp decline in value of Sterling to Euro in January 2013 High level of forward bookings posted at above 1.20, cost incurred at lower rate 10 10
Currency impact Currency split – total revenue Currency split – total costs USD Euro 34% 35% Euro 41% Sterling 48% 1% Other 5% 3% Swiss Franc 25% 8% Other Sterling Swiss Franc F '13 currency impact favorable / (adverse) £m £m EUR CHF USD Other Total Revenue (5) (3) 1 1 (6) Fuel Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 1 - (5) - (4) Costs excluding fuel (33) (2) - 1 (34) Total (37) (5) (4) 2 (44) Average effective Euro rate for revenue for FY13 was € 1.19 (FY12: € 1.19) 11 11 Average effective Euro rate for costs for FY13 was € 1.19 (FY12: € 1.22)
Impact of fuel F’13 F’12 Change B/(W) Fuel $ per metric tonne Market rate 992 1,020 28 Effective price 980 982 2 US dollar rate Market rate 1.55 1.58 (3 cents) Effective price 1.58 1.59 (1 cent) Actual cost of fuel £ per metric tonne 619 618 (1) Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Cost per metric tonne was broadly flat 12 12
Cost per seat excluding fuel - key drivers £ var at % var at Favourable/ £ Cost per constant constant Drivers (Adverse) seat ex fuel currency currency • Significant increases in airport charges in Airports and Ground 15.84 (1.14) (7.9%) Spain and Italy Handling • Increased de-icing related costs (1.1%) • Increase in salaries, offset by higher Crew 6.68 (0.08) proportion of A320s and shorter sector length 0.5% • Price increases more than offset by higher Navigation 4.33 0.02 proportion of A320s and shorter sector length • One-off items from last year not repeated, Maintenance 3.11 - 0.2% offset by above inflation price increases and increase in average fleet age • Higher disruption-related costs including EU261 claims, relating to prolonged winter Overhead 4.64 (0.08) (2.1%) conditions and strike action • Increase in performance related employee costs (108.2%) • As per the amended brand license Brand licence 0.16 (0.08) agreement, now fixed percentage of revenue • Increased proportion of leased aircraft, following new leases and sale and leaseback Ownership 3.41 (0.05) (1.4%) Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold transactions • Savings on interest cost from paying off high coupon debt (3.9%) Total CPS excluding fuel 38.17 (1.41) 13 13
Management action taken to offset headwinds Cost per seat bridge Airports & Ground Handling – £0.25 56.61 61 0.57 0.64 Fuel - £0.19 Maintenance - £0.12 0.08 0.31 0.14 0.29 0.11 55.55 0.39 1.44 Spain ain & Italy ly - £0.86 Other Airports - £0.58 53.70 2012 Airports Inflation Disruption Fuel Brand FX Before easyJet A320 Mix Other 2013 & de-icing licence Management Lean 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 t factor ors acti tion 14 14
Increasing proportion of A320’s F ' '13 F ' '12 Change A319 (operating lease) 54 49 5 A319 (owned / finance lease) 99 111 (12) A319 T otal 153 160 (7) A320 (operating lease) 18 6 12 A320 (owned / finance lease) 46 48 (2) A320 T otal 64 54 10 T otal fleet 217 214 3 Operating lease 33% 26% 7ppt Percentage unencumbered 36% 32% 4ppt Percentage of A320s in fleet 29% 25% 4ppt Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold 15 15
Strong balance sheet £m £m F '13 F '12 Property, plant and equipment 2,280 2,395 Goodwill and other intangible assets 467 456 Other assets 428 561 Liabilities (excluding debt) (1,716) (1,544) 1,459 1,868 68 Debt 679 957 Cash and money market deposits (1,237) (883) Net (cash) h) / debt (558) 74 74 Shareholders' equity 2,017 1,794 Capital employed yed 1,459 1,868 68 Gearing 7% 29% 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)
Flexibility in fleet planning Maximum, minimum and base case fleet size under new framework agreement 302 301 300 298 279 262 282 282 247 275 270 267 237 262 226 247 237 229 220 220 187 183 173 171 168 FY'14 FY'15 FY'16 FY'17 FY'18 FY'19 FY'20 FY'21 FY'22 Base case Max Min 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 17 17 2. Based on fleet plan – base case 3. Maximum fleet does not include the purchase rights
Cashflow £m Self funding ordinary dividend and capex 161 69 85 416 112 497 148 25 £m 2 1,237 316 283 883 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold Sep 2012 * Operating Depn & Net Tax, net Ordinary CAPEX Borrowings Sale & Restricted Other FX Sep 2013* Profit * amort Working int & other dividend Leaseback Cash Capital paid 18 18 * Includes money market deposits but excludes restricted cash
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