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

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Continued solid performance

(1) At constant currency

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

3 3 50% 50% 10% 9% 9% 8% 8% 6% 6% 6% 6% 5% 5% 6% 6%

Gatwick Hamburg Basel Geneva Naples Nice Rome Other

easyJet strengthens positions at key primary airports

easyJet et market ket position

No.1 .1 No.3 .3 No.1 .1 No.1 .1 No.1 .1 No.1 .1 No.2 .2

Continuing to invest in No.1 and No.2 positions

Flybe slots

• c. 40%

easyJet yJet is incr creasin easing g summer mer capacity ity by 6.4%

Driven by purchase of the Flybe slots and allocation

• f new slots which

became available

4 4

Step change in position at Gatwick

• c.15% summer capacity growth at Gatwick
• 23 May 2013 acquired slot pairs from Flybe
• 30 March 2014 started to operate the slots
• Secured additional slot pairs from Gatwick

Airport runway efficiency programme

• Opportunity to optimise slot portfolio from 2015
• nwards
• Route maturity
• Re-allocate 40% of slots to optimal routes
• easyJet’s future competitiveness at London

Gatwick underpinned by seven year deal

• Single terminal operation will deliver a step change

in customer experience and operational efficiency

easyJet market share at Gatwick

Source: OAG

52.8% 0.2% 2.4% 0.4% 55.8% 50% 51% 52% 53% 54% 55% 56% 57% FY13 H2 A320 Mix Flybe Slots Slot allocation FY14 H2

5 5 2.2% 2.8% 5.6%

• 0.1%

7.4%

Gatwick United Kingdom (less LGW) Rest of Europe Competitors on easyJet markets H2 2014 easyJet capacity H2 2014 Direction of easyJet Q3 RPS(2)

(1)

(3)

c.15%

Third quarter revenue per seat performance

(1) OAG, June 2014 (2) At constant currency (3) Includes Heathrow

Yield pressure at Gatwick driven by increased easyJet capacity

6 6

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%

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Maintain cost advantage

 Ground handling costs down  Disruption costs down

• Pre-emptive cancellations

controlling costs  Lower de-icing cost coming from milder weather Q3 FY’14 Reported Constant currency

Cost per seat excluding fuel 1.3% decrease 1.0% increase

Drivers ers of cost perform rformance ance in Q3

× Increase in airport charges mainly in Italy × Higher maintenance costs due to planned ageing of the fleet and the increase of leased aircraft in the fleet

Cost performance better than guidance

8 8 Footer box on intersect of lines line h=8.03 9 and v=8.75 with font 10pt Arial not bold

easyJet is well placed to succeed

42.3% 6.8% 21.3% 31.6% 36.3% 47.5% 48.9% 9.3% 26.0% 40.4% 40.6% 56.9%

Gatwick No1 Fiumicino No2 Nice No1 Malpensa No1 Geneva No1 Basel No1

2011 market share 2014 market share

 Differentiated pricing model  Significant focus on digital and data  Friendly service  End to end customer experience  Growing brand affinity  Convenient airports and schedule

Customer focused Sustainable cost savings Investing in the network Strong balance sheet

Engine selection Engineering & Maintenance Up-gauging Airport deals

2015 2016 2017 2018 2019

easyJet 21.5% Ryanair 15.6% Norwegian 3.1% IAG 8.3% Lufthansa 11.6% Air France 2.5% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

• Adj. ROCE 1
• Adj. Gearing 1

Strong balance sheet

• Data based on 12 month period ending 31 March 2014
• Includes capitalised leases capitalised at 7.0x
• Bubble represents size of EBIT

Source: OAG full year

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New base openings to drive growth and returns

• Opening in spring 2015 with 3 based aircraft
• easyJet already has a No.2 position at

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

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

EZJ 46m seats Non-LCC P2P (est) 86m seats Non-LCC transfer (est) 26m seats Other LCC 51m seats

Pie chart data source: Based on easyJet’s top 20 airports. Market size sourced from OAG based on easyJet definition of short-haul routes; estimates of transfer traffic

• btained from airport and company external announcements. P2P = point to point,; LCC = Low cost carrier

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Continued improvement in returns

Returns Routes

ROCE 12% 12m to 30/6/20 2011 11

2.8% 0.0% 1.3% 4.3% 2011 2012 2013 2014

Capaci acity chan ange ge total al shor

• rt-hau

aul market ket 12m to 30/6/20 2012 12 12m to 30/6/20 2013 13 12m to 30/6/20 2014 14

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

Source: OAG

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Forward bookings ahead of prior year

% Seats sold *

H2 (April 20‘14 to September 2014) * As at 16-07-14

88% 75% 90% 77% Q3 Jul Aug Sep H2

Summer 13 Summer 14

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Hedging update

Fuel requirement US Dollar requirement Euro surplus

Three months to 30 September 2014 83% 91% 80% Average rate $968 metric tonne $1.58 €1.21 Full year ending 30 September 2014 80% 89% 79% Average rate $980 metric tonne $1.58 €1.20 Full year ending 30 September 2015 71% 80% 65% Average rate $951 metric tonne $1.58 €1.17 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

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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 (3) Unit fuel calculated as the difference between latest estimate of FY’14 fuel costs less FY’13 fuel cost per seat multiplied by FY’14 seat capacity

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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

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

easyJet – upcoming events

appendix

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easyJet generates industry-leading returns

(1) Local Currency Unit Source: Company filings, data as of the last twelve months ending 31 March 2014 Note: Local corporate tax rates for 2014 sourced from KPMG corporate tax rate tables

easyJet Ryanair Norwegian IAG Air France Lufthansa LCU(1) LCU(1) LCU(1) LCU(1) LCU(1) LCU(1) EBIT 484 659 124 898 217 1,155 Interest on leases (33%) 38 34 478 171 300 21 Adjusted EBIT 522 692 602 1,069 517 1,176 Tax (at marginal rate)

• 104
• 87
• 163
• 224
• 172
• 348

NOPAT 418 606 439 845 344 828 Marginal tax rate % 20% 13% 27% 20% 33% 30%

• Ave. equity

1,664 3,279 2,211 5,677 1,692 4,901

• Ave. net debt / (cash)
• 441
• 90

3,497 1,393 5,443 1,667

• Ave. capitalised leases (7.0x)

725 699 8,652 3,294 6,489 581 Average capital employed 1,948 3,888 14,360 10,363 13,624 7,149 ROCE 21% 16% 3% 8% 3% 12% Capitalised leases at 7.0x and local tax rate ROCE - using 20% Tax rate 21% 14% 3% 8% 3% 13%

• Adj. Asset Turnover

2.2 x 1.3 x 1.1 x 1.8 x 1.9 x 4.2 x

• Adj. NOPAT Margin

10% 12% 3% 5% 1% 3%

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Disclaimer

This communication is directed only at (i) persons having professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001; or (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001. Persons within the United Kingdom who receive this communication (other than those falling within (i) and (ii) above) should not rely on or act upon the contents of this communication. Nothing in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion contained in the Financial Services and Markets Act 2000. This presentation has been furnished to you solely for information and may not be reproduced, redistributed or passed on to any other person, nor may it be published in whole or in part, for any other purpose. This presentation does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities of easyJet plc (“easyJet”) in any jurisdiction nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. This presentation does not constitute a recommendation regarding the securities of

• easyJet. Without limitation to the foregoing, these materials do not constitute an offer of securities for sale in the

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