H1 2019 Results presentation introduction Johan Lundgren - CEO - - PowerPoint PPT Presentation

easyJet

H1 2019

Results presentation

introduction

Johan Lundgren - CEO

Focusing on delivery

3

3

 H1 performance in line with expectations  Significant focus on H2 delivery

• Customer, revenue, operations & cost

 Continuing to invest in our strategy

• Investing in the network
• Winning our customers loyalty
• easyJet Holidays, Loyalty, Business making good

progress

• Investing in value by efficiency
• Investing in our people
• Underpinned by the efficient use of data

FY 2019 PBT expectations unchanged

Financial review

Andrew Findlay - CFO

Key performance indicators

H1 2019 H1 2018 Chang ange* e* Seats flown (m) 46.2 40.4 14.5% Passengers (m) 41.6 36.8 13.3% Load factor (%) 90.1% 91.1% (1.0ppt) Average sector length (km) 1,068 1,071 (0.2%) Revenue per seat - reported currency (£) 50.71 54.10 (6.3%) Revenue per seat - constant currency (£) 50.12 54.10 (7.4%) Headline cost per seat incl fuel - reported currency (£) 56.66 54.53 (3.9%) Headline cost per seat incl fuel - constant currency (£) 55.88 54.53 (2.5%) Headline cost per seat excl fuel - reported currency (£) 43.64 43.11 (1.2%) Headline cost per seat excl fuel - constant currency (£) 43.65 43.11 (1.3%)

*Favourable/(adverse)

5

Financial performance

*Favourable/(adverse)

6

H1 2019 9 pre IFRS Changes es IFRS Impact ct H1 2019 H1 2018 Change £ m m £ m m £ m m £ m m £ m Total revenue 2,400 (57) 2,343 2,183 160 Headline costs: Headline costs excluding fuel (2,024) 8 (2,016) (1,740) (276) Fuel (602) (602) (461) (141) Headlin dline profit fit/(lo /(loss ss) ) befo fore tax (226) 6) (49) 9) (275 75) (18) (257 57) Headline loss before tax at constant currency (212) (54) (266) (18) (248) Non-headline items: Sale and leaseback 4 (2) 2 (19) 21 Brexit-related costs (4) (4) (4)

• Commercial IT platform

2 (0) 2

• 2

Tegel integration

• (24)

24 Other 3

• 3

(3) 6 Total loss s before e tax (221) 1) (51) (272 72) (68) (204)

Revenue performance

Revenue per seat bridge

Note: Underlying market conditions include underlying trading and market capacity growth

7

£50.71 71

Tegel H1 2019 at CC H1 2018 reported

£0.70 £1.22

Impact from IFRS adoption

£50.12 12 £0.59

FX H1 2019 reported

£0.26 £54.10 10 £1.22

Monarch exit/ Ryanair cancellations

£1.54

Seasonality (including Easter) Ancillary Revenue H1 2019 at CC Post IFRS

£0.96

Underlying growth

£51.34 34

+0.5%

• 2.3%

+1.3%

RPS @ cc = (7.4%) %)

• 2.8%
• 1.8%
• 2.3%

+1.1%

Repo ported ed RPS = (6.3%) 3%)

£0.14 £0.43 £1.15 £0.67 £0.30 £0.21 £0.81 £0.78

costs

Headline cost per seat bridge

8

Ownership Airports and ground handling H1 2018 headline ne cost per seat Crew

£54.53 53 £56.6 .66

Maintenance H1 2019 headline ne cost per seat @ CC Navigation P&L FX Fuel H1 2019 headline ne cost per seat @CC before fuel varianc nce

£55.88 £55.07

H1 2019 headline ne cost per seat Overheads and Other Income

Headl dline e CPS @ cc = (2.5%) %) Headl dline e CPS ex fuel @ cc = (1.3%) %)

Impact of IFRS 15&16 on income statement

Descript iptio ion H1 H1 201 2019 £m £m IFRS 15: Deferral of revenue to H2 and compensation payments offset against revenue (57) IFRS 15: Reclassification of compensation costs to offset revenue 6 Total tal IFRS 15 pre tax profit impact on H1’19 (51) IFRS 16: Reclassification of maintenance expense (36) IFRS 16: Reduction of leasing expense (88) IFRS 16: Increase in depreciation expense 112 IFRS 16: Increase in interest expense 12 Total tal IFRS 16 pre tax profit impact on H1’19

• Total

tal H1’19 pre tax profit impact of new accounting standards* (51)

* The P&L impact of IFRS 9 is not material

9

Impact of fuel & currency

H1 2019 9 fuel l impact pact H1 2019 H1 2018 Chang ange* e* Fuel el $ per metric ic tonn nne Market rate 650 620 (30) Effective price 645 547 (98) US dolla lar rate te Market rate 1.29 1.36 7 cents Effective price 1.31 1.39 8 cents Difference between market rate and effective rate 0.02 0.03 Actual cost of fuel £ per metric tonne 493 393 (100) H1 2019 9 curr urren ency impac act t on headline dline PBT* EUR UR CHF USD Othe her Total tal £m £m Revenue 20 7 1 (1) 27 Fuel

• (37)
• (37)

Headline costs excluding fuel 7 (3) (4) 1 1 Total 27 4 (40)

• (9)

*Favourable /(adverse)

10

Strong cash generation

* Includes money market deposits but excludes restricted cash

Cash flow bridge

Cash generated from operations (excluding dividends): £581m Investing and financing 255 236 617 11 28 233 121 465 85 8 4

Ca Cash h & MMDs post t div & tax x paid

1,721 721

Sale & leaseback proceeds Cash Capex Payment of lease liabilities Cash h & MMD’s @ 31 Mar r 201 019

1,37 373

Depn & amort Restricted cash, own shares and net interest FX Operating loss Cash h & MMD’s @ 1 Oct 201 018 Other

• perating

1,280 80

Tax paid Ordinary dividend (FY’18) Net working capital

11 Liquid uidit ity of £3.7m .7m per 100 seats ts is suppor ported ted by two revolvin

• lving

g credit dit facil cilit itie ies (one ne $500 million lion facilit ility and d one £250 0 millio lion n faci acilit lity) y) and d a busin iness inte terrupt uption ion insur uranc nce polic icy

Strong balance sheet

* Excludes restricted cash

12

£m £m

31 March h 201 2019 31 March h 201 2018 (Resta tated) ted) 30 Sept ptember mber 201 2018 (Resta tated) ted)

Goodwill and other intangible assets 551 589 546 Property, plant and equipment (excluding RoU assets) 4,286 3,648 4,140 RoU assets under IFRS 16 572

• Derivative financial instruments

48 106 364 Equity investments 54

• Other assets (excluding cash and money market deposits)

484 469 539 Unearned revenue (1,726) (1,468) (877) Other liabilities (excluding debt) (1,552) (1,381) (1,875) Capital employed 2,717 1,963 2,837 Cash and money market deposits* 1,280 1,624 1,373 Debt (excluding lease liabilities) (858) (959) (977) Lease liabilities under IFRS 16 (623)

• Net (debt)/

)/cash ash (201) 665 665 396 Net assets 2,516 2,628 3,233

Fuel and foreign exchange hedging

Fuel r requirement US dollar ar requireme ment Euro Surplus lus Six months to 30 September 2019 73% @ $584/MT 77% @ 1.34/£ 74% @ 1.12/£ Full year ending 30 September 2019 72% @ $579/MT 83% @ 1.33/£ 68% @ 1.13/£ Full year ending 30 September 2020 58% @ $660/MT 61% @ 1.36/£ 61% @ 1.11/£

As at 31 March 2019

13

Utilising flexibility in fleet planning

14

Max fleet plan Min fleet plan

• Upside cases assume extension of leases and ownership beyond year 16
• Downside cases assume sale at 16 years of age

332 332 353 367 385 403 332 332 346 338 338 316 316 283

270 290 310 330 350 370 390 410 FY2019 FY2020 FY2021 FY2022 FY2023 No of aircra craft

Gross capital expenditure

15

FY19 FY20 FY21 FY22

New IFRS Std's Base

c.£900m

• c. £1,100m
• c. £900m
• c. £1,250m

H2 forward bookings

H2 2019 (Apr 2019 to Sep 2019) as at 10 May 2019

16

92% 93% 78% 56% 75% 34% 54% 90% 91% 72% 52% 72% 34% 52%

H1 Apr May Jun Q3 Q4 H2

FY18 FY19

H2 capacity outlook

H2 2019 (Apr 2019 to Sep 2019) as at 1 May 2019

17

5.2%

• 2.0%

2.5% 12.8% 2.4% 3.6% 4.6% 7.0%

Capacity change total short haul Market Competitors on easyJet markets Capacity Change easyJet markets easyJet capacity change

H2 FY18 H2 FY19

Capacity change total short haul market Competitors on easyJet markets Capacity change easyJet markets easyJet capacity change

H2 ea easy syJet et growth

H2 2019 (Apr 2019 to Sep 2019)

18

Manchester Up-gauging H2’19 capacity growth Tegel annualisation Nantes new base Annualisation & underlying growth

2.3% 1.3% 0.9% 1.1% 1.4% 7.0%

Outlook

19

FY 2019 headline profit before tax > Unchanged PBT expectations, in line with current market consensus# Capacity (seats flown) > H2 c.7% increase > FY c.+10% increase Revenue per seat at constant currency > H2 revenue per seat performance (updated for IFRS 15):

> Slightly down

Cost per seat at constant currency > FY headline cost per seat excluding fuel (updated for IFRS 15):

> Down (assuming normal levels of disruption)

FX / Fuel* > FY: c.£10 million positive movement from foreign exchange rates on headline PBT > FY: unit fuel costs £25 million to £60 million adverse > Expected total fuel cost c.£1.4 billion

* Based on fuel spot price range of $600 - $700 includes impact of ETS carbon scheme prices GBP; EUR: 1.15 GBP: USD 1.29 # Internally compiled market consensus as at 15 May 2019 is £435m - Based on the 21 estimates from post 1st April trading update

19

Ceo update

Johan Lundgren

Early Initiatives delivering results

21

Results delivered Initiatives delivered

> Contactless payment system to increase onboard sales > Rolling out Auto Bag Drop to 17 airports > Call centre improvements Customer > Enhanced algorithms > New customer bundles > Increased Bag & seat options Revenue > Operational Resilience programme > Standby aircraft > Schedule firebreaks Operations

Auto bag drop facilities for

34 34m

customers

Call centre processing times decrease significantly Easter operational performance

• 86%

% OTP P

• (up 4

4ppts vs 2 2018) 8)

• LGW - 87%

87%

• No Can

ancel ellations lations

Doubl

• uble

e

the number of standby aircraft

CSAT with crew;

Reac aching hing an all time me high

H1 underlying RPS

+1 +1.8% 8%

Operational Resilience & Strategic savings programme driving CPS ex-fuel down in H2

Structural Demand for travel remains resilient

17% 20% 47% 16%

It is a top priority It is a serious priority It is somewhat a priority It is not a priority

63 63%

+4ppts vs 2017

*Of the major purchases you are intending to make in the next 12 months, how much of a priority is travelling for leisure for you?

Desire for leisure travel continues to be important

22

Source: Millward Brown Travel Trends 2019 – UK market

Our priorities – delivering our strategy

23

Driving value in H1 2019

7% 7% Pilot and 5% 5% crew turnover High ghest ranked ked low cost carrier for custome

• mer

satisfact action

• n*

High employee satisfaction: eNPS score

• f 25 on Peakon

#1 or #2 in primary airports Winning our customers’ loyalty The right people Innovating with data Value by efficiency

39 data team members 20+ margin gin accret etive e projec

• jects currently being

developed: Delivering projects: Pricing and ancillaries; Disruption; Cost efficiency Better aligned with IT £45 million of cost programme savings. Delivering over £100m for FY’19 Resilience plan well set for summer er – 54% fewer cancellations in H1 vs 2018; Easter OTP P 86% Best value e airline e in Europe* Most prefe eferred ed and considered LCC in the UK, France, Switzerland.* 76% % of seats boo

• oked

ked by returning g customer ers Best Busines ess Airline e at Business Travel awards 2019 #1 in Berlin New base at Nantes 27 #1 networ

• rk

k positions across the network, up from 18 in FY’17 54% of easyJet et capa pacity is flown from a #1 position at a con

• nstrain

ained ed airpor

• rt,

, up 6ppts from FY’17

*Source: Millward Brown Brand Tracker

#1 or #2 in primary airports

24

Increasing No1 positions across the network Slot constrained – Primary Airports

Shar are e of 2018/19 19 Winter er capa pacity Airpor

• rt posit

itio ion Total #1 #2 Other Level 3 constrained 38% 17% 20% 75% Level 2 constrained 8% 1% 3% 12% Other 8% 3% 2% 13% Total 54% 21% 25% 100%

Legacy carriers are our main competitors

easyJet – 44% Legacy / Other – 36% Low cost carriers – 20%

Avg CPBH increased by c.20% over the cycle*

* Contribution per block hour. FY2014-FY2018 Level 3 constrained = Demand for airport infrastructure significantly exceeds the airport’s capacity during the relevant period Level 2 constrained = An airport where there is potential for congestion during some periods of the day, week or season

5 10 15 20 25 30 FY'15 FY'16 FY'17 FY'18 H1'19

No of airports ports

Winning our customers’ loyalty

25

Delivering results Investing in winning our customers loyalty

> Attractive fares in primary airports > Most preferred airline with highest perceived worth in EU Great offer > Over 1,000 routes to 157 airports in 34 countries Unrivalled network > Bag drop in 17 airports > Claims processed in 2 days at Easter Efficient

• peration

Strong ng Bran and d Scor

• res

 First choice UK brand scores at highest level in 5 years  Rated best value LCC in UK, France, Switzerland & Italy  Most preferred and considered Low cost carrier in the UK, France, Switzerland. Easter ter 2019: 9:  86% OTP  No cancellations CSAT scor

• res

es  Satisfaction with crew at all time high  4.5pts more satisfied with queue management

No1 digit gital al innova vation 2018

Good progress on easyJet Holidays, Loyalty and Business products

easyJet Holidays

Launching by the end of 2019 for summer 2020

26

The opportunity

Leading network for beach and city breaks Multiple frequencies by day and destination

20m

People who flew with easyJet for leisure and booked accommodation elsewhere

Cost advantage vs main competitors Curated hand picked hotels

Progress so far

 Highly experienced management team and board in place  500 direct hotel relationships in 2020  Technology and web partners confirmed

Value by efficiency

27

Investing in value by efficiency

> Efficiency and cost reduction projects for each cost line > Strategic FX and fuel hedging policy Strategic cost reduction programme > OTP SIM > Crew standby forecaster > Standby aircraft Operational resilience programme > 26 A320 / 321 neo aircraft expected to be delivered in 2019 Efficient fleet

Results delivered

 £545m in cost reductions delivered since 2011  Will deliver over £100m in strategic cost savings in 2019  CPS ex fuel @cc expected down in H2 2019  Strong operational performance over Easter period  3hr delays down 17% in H1

Current generation A319 5% -6% New generation A320neo New generation A321neo Current generation A320 6% -7% 8% -9%

Sched hedule ule design sign

Dat ata a product

• ducts

Built 8 new Data ta tools

• ls, including an ATC Slot Predictor and

Crew Pairings Analyser

Crew resi silie lience ce

Proactively split it 900 0 crew pair irin ings gs so standby crew are in the right place at the right time

Standby ndby aircraft aft

Double ubled d the number mber of standb andby aircraft ft compa mpared ed to last t summer mer deployed throughout the network

Flight ht planning ning

Introduced a new, dedicated four ur-person person pre-tac acti tical al flight ight plann anning ing team First t wave focus Improved turn times and increased firebr ebrea eaks to better absorb delays

Underpinned by the efficient use of data

28

Operational resilience

Investing in operational resilience Results delivered

Event volumes down

33% 33%

YTD Summer disruption costs down

30% 0%

Strong Easte ster

• per

eratio tional l perfo rforma rmance ce

(best in past 5 years)

Tar arge geting ting a d a decr crease ease in disru sruption ption costs s through

• ugh the summe

mer *

* At normal levels of disruption

The right people

29

Investing in the right people

> Engaging regularly and directly with our people through Peakon and Workplace Engaging our people > ePOS > Crew standby simulator Giving them the right tools > Support skill development and talent progression > Hiring the right people for the right job Key focus on developing and retaining talent Overall engagement score

8/10

eNPS*

25

A good place to work. > High retention

• 6% - total turnover
• 5%

5% - crew turnover

• 7%

% - pilot turnover

4.2 cc

Glassdoor rating

Results delivered Key skills acquired for Holidays, Loyalty, Business, IT, Data

* Employee Net Promoter Score.

Innovating with data

30

Results delivered Investing in Data

> New bundled fare offerings > Auto boarding gates trial > Single Customer View Improve customer experience > ATC slot predictor > OTP simulator > Crew standby forecaster Improve

• perational

performance > Strong link to improved operational performance Reduce cost > Launch of additional seat bands > Improved bag pricing algorithm to include 20+ additional factors Drive revenue  Reduction in ATC Slot delays and disruption costs  Earlier visibility of flights which may cause disruption  Highest ranked low cost carrier for value perception  First choice low cost carrier brand Europe wide  Increased offer customisation  Clarity in pricing options and late yield performance  Customised offers to drive revenue performance  Strategic cost reduction programme planned to deliver over £100m in savings in 2019

delivering shareholder value

31

Delivering shareholder value

#1 or #2 in primary airports Winning our customers’ loyalty The right people Innovating with data Value by efficiency

Maximise PBT/ seat Maximise ROCE Generate sustainable positive cash flows

Q&A

Appendix

Loss after tax

* Favourable/(adverse)

34

£ m H1 2019 H1 2018 Headline profit/(loss) before tax (275) (18) Headline tax (charge)/credit 54 5 Headline loss after tax (221) (13) Total loss before tax (272) (68) Total tax credit 54 14 Total loss after tax (218) (54) Total effective tax rate 19.7% 19.8%

Revenue Total and Per Seat

£ per seat reported Total H1 2019 H1 2018 Change* Passenger revenue 39.48 42.84 (7.9%) Ancillary revenue 11.23 11.26 (0.2%) Total revenue 50.71 54.10 (6.3%)

*Favourable/(adverse)

35

£ per seat @ C CC Total H1 2019 H1 2018 Change* Passenger revenue 39.01 42.84 (8.9%) Ancillary revenue 11.11 11.26 (1.3%) Total revenue 50.12 54.10 (7.4%) Total l reported Total H1 2019 H1 2018 Change* Passenger revenue 1824 1729 5.5% Ancillary revenue 519 454 14.3% Total revenue 2343 2183 7.3%

headline COST PER SEAT

36

Cost per seat excluding fuel £ Varianc nce at constant nt currenc ncy* y* £ Varianc nce at constant nt currenc ncy* y* % Weight hted varianc nce at constant nt currenc ncy* y* % Drivers Airports and ground handling 16.78 (0.14) (0.8%) (0.3%)

• Annualised increases in charges at regulated

airports

• Annualisation of Tegel flying
• Partially offset by lower de-icing costs

Crew 8.77 (0.43) (5.2%) (1.0%)

• Pay increases
• Low attrition
• Investment in resilience ahead of the busy summer period

Ownership 5.57 (1.15) (25.8%) (2.7%)

• Increase in depreciation due to new aircraft

purchased

Overheads & other income 5.43 0.68 10.8% 1.6%

• Lower disruption costs
• IFRS 15 impact
• Reduction in wet leasing costs now we have our own fleet at Tegel
• Partially offset by the cost of Strategic initiatives and increase in headcount
• Airbus compensation

Navigation 3.79 0.29 7.2% 0.7%

• Decrease in rates from Eurocontrol

Maintenance 3.30 0.21 6.0% 0.5%

• Impact of IFRS 16
• Up-gauging of the fleet
• Partially offset by inflationary price rises and the cost of unanticipated heavy maintenance findings

Total Headline CPS excluding fuel 43.64 (0.54) (1.3%) (1.3%) Fuel 13.02 (0.81) (7.1%)

• Increases in the market price of fuel

Total Headline CPS 56.66 (1.35) (2.5%)

*Favourable/(adverse)

• NB. IFRS 9,15 and 16 impact on cost per seat excluding fuel is minimal £0.17.

Increasing proportion of A320’s

H1 2019 FY 2 2018 Change A319 (Leased) 56 53 3 A319 (owned) 69 79 (10) A319 Total 125 132 (7) A320 (Leased) 43 42 1 A320 (owned) 147 139 8 A320 20 Total 190 181 9 A321 21 (owned/Tot

• tal)

al) 5 2 3 Total l fleet 320 31 315 5 Leased 31% 30% 1ppt Number unencumbered 221 220 1 Percentage of A320s in fleet 59% 57% 2ppt

37

Return on capital employed

*Favourable /(adverse)

38 £m £m H1 2019 Pre-IF IFRS S adopt

• ptio

ion H1 201 2019 Reported ported H1 2018 8 Reported ported Headline loss before interest and tax (218) (256) (8) Interest element of operating lease payments 30

• 25

Headline (loss)/profit before interest and tax – adjusted (188) (256) 17 UK corporation tax rate 19% 19% 19% Normalised headline operating (loss)/profit after tax (NOPAT) (152) (207) 14 Average shareholders’ equity 2,892 2,849 2,729 Average net debt/(cash) (362) 168 (511) Average capitalised leases 1,187

• 837

Average adjusted capital employed 3,717 3,017 3,055 Return on capital employed (4.1%) (6.8%) 0.4%

Non-headline items

39

H1 H1 2019 H1 H1 2018 Descript ption £ m £ m Sale and leaseback 2 (19) The sale and leaseback of 10 A319 aircraft in both years resulted in a profit

• n disposal of the assets of £2 million. In H1’18 there was an £11m loss on

disposal plus an £8 million maintenance provision catch up (under the pre- IFRS 16 accounting standards). Brexit-related costs (4) (4) Cost of establishing a multi-AOC post-Brexit structure following the UK’s referendum vote to leave the European Union (‘EU’). Commercial IT platform 2

• Release of the balance of the unused FY’18 accrual for the write-down of IT

assets under development which will no longer be utilised by the business. Tegel integration

• (24)

Following the acquisition of part of Air Berlin’s operations at Berlin Tegel airport there were costs of completing the transition process, including costs of converting the leased aircraft. Organisational review

• (1)

The programme involved redundancy costs and associated third party adviser fees. Balance sheet foreign exchange gain 3

• Foreign exchange gains or losses arising from the retranslation of foreign

currency monetary assets and liabilities held in the statement of financial position. Fair value adjustment

• (2)

Fair value adjustments associated with the cross-currency interest rate swaps put in place for the Eurobonds issued on February 2016 and October 2016. Tot

• tal

al non

• n-hea

eadl dline item ems 3 (50)

Currency impact

Reven enue ue Costs ts H1 2019 H1 2018 H1 2019 H1 2018 Sterling 41% 44% 32% 32% Euro 48% 44% 37% 7% 39% US dollar 1% 1% 1% 24% 22% Other (principally Swiss franc) 10% 11% 7% 7% 7%

Average effective Euro rate for revenue for H1 2019 was €1.13 (H1 2018: €1.15) Average effective Euro rate for costs for H1 2019 was €1.14 (H1 2018: €1.13)

40

Adoption of IFRS 15

Change in a accounting: g:

• Revenue recognition from certain revenue streams, principally administration and change fees, are now recognised on

the date of flight rather than the date of booking.

• Some of the compensation payments made to customers (in respect of flight delays), previously recorded wholly within

expenses, are now offset against revenues recognised, with the excess compensation continuing to be recorded within expenses. Impact on a adoptio ion on 1 Oc October 2018: :

• A one-off £70 million (post-tax) increase to unearned revenues has been recognised with a corresponding charge to

retained earnings (in respect of bookings made in the year ended 30 September 2018 and recognisied in revenue in FY’18, for flights which occur in FY’19). These revenues have been recognised again in FY’19 at the date of flight. FY’19 impact ct:

• A higher proportion of annual revenues will now be recognised in the second half of the year (£51 million of revenue is

deferred from H1 to H2).

• Revenue and cost have both decreased by £6 million in H1 as a result of the reclassification of compensation payments.
• The anticipated full year profit impact of this change is expected to be immaterial.

41

Adoption of IFRS 16

Change in a accounting: g:

• All aircraft operating leases have been capitalised on the balance sheet as a right-of use asset with a corresponding

lease liability representing easyJet’s obligation to make lease payments. Lease costs previously recognised within the Income Statement have been replaced by depreciation and interest expense.

• Contractual maintenance obligations which are dependent on the use of the aircraft will continue to be provided for over

the term of the lease based on the estimate future costs, discounted to present value. However they have been capitalised to the right-of-use asset and depreciated immediately rather than recognised within maintenance costs in the Income Statement. Impact on

• n early

y adopt ptio ion on 1 Oc October 2018: :

• £532 million of lease liabilities and £497 million of Right of Use Assets were recognised at 1 October 2018, with a

corresponding net decrease to retained earnings. HY’19 impact:

• There is no half year pre tax profit impact.
• Decreases in operating lease expenses of £86m and maintenance charges of £38m are replaced by increased levels of

depreciation of £112m and interest expense of £12m.

42

Adoption of IFRS 9

Change in a accounting: g:

• Some changes have been applied to the classification and measurement of financial instruments.
• easyJet does not have a material impact from changes to hedge accounting requirements or impairment due to

the high credit quality of counterparties with which easyJet transacts. Impact on a adoptio ion on 1 Oc October 2018: :

• Equity investment fair value of £54m has been recognised at transition.
• Applying the cost of hedging resulted in immaterial movements within reserves

FY’19 impact ct:

• The half year and anticipated full year profit impact of this change is expected to be immaterial.

43

Q2 Passenger statistics

44

January ry 2019 2018 Change

Passengers 5,838,198 5,305,991 10.0% Load Factor 86.5% 86.4% 0.1Pts

Febru bruary ary 2019 2018 Change

Passengers 6,498,267 5,792,624 12.2% Load Factor 91.5% 91.2% 0.3Pts

March 2019 2018 Change

Passengers 7,721,347 6,908,864 11.8% Load Factor 93.1% 92.2% 0.9Pts 44