introduction Johan Lundgren - CEO Strong Summer performance 2019 - - PowerPoint PPT Presentation

introduction

Johan Lundgren - CEO

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> FY 2019 headline PBT of £427m, upper end of guidance > Delivered a record H2 headline profit > H2 RPS, out performance vs guidance > FY CPS ex fuel in line with guidance > Self help initiatives drive summer performance

• Successful summer operational resilience programme
• Strong late yield performance
• Use of data the foundation for driving self help initiatives

> Strong progress on easyJet holidays. Launching before Christmas! > Negotiated fresh fleet delivery plan, whilst securing late delivery compensation. 2019 Best short-haul airline 2019 Best Low Cost Airline in Europe

Strong Summer performance

2019 Customer / Industry awards

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2019 Brand of the Year World Branding Awards 2019 Best business airline

Financial review

Andrew Findlay - CFO

FY 2019 performance HIGHLIGHTS

*Favourable/(adverse)

5 FY 2019 FY 2018 Change* Seats flown (m) 105.0 95.2 10.3% Passengers (m) 96.1 88.5 8.6% Load factor (%) 91.5% 92.9% (1.4)ppt Average sector length (km) 1,105 1,101 0.4% Revenue per seat - reported currency (£) 60.81 61.94 (1.8%) Revenue per seat - constant currency (£) 60.28 61.94 (2.7%) Headline cost per seat incl fuel - reported currency (£) 56.74 55.87 (1.5%) Headline cost per seat incl fuel - constant currency (£) 56.08 55.87 (0.4%) Headline cost per seat excl fuel - reported currency (£) 43.26 43.43 0.4% Headline cost per seat excl fuel - constant currency (£) 43.11 43.43 0.8% Headline profit before tax per seat - reported currency (£) 4.07 6.07 (32.9%)

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H2 2019 performance HIGHLIGHTS

*Favourable/(adverse)

6 H2 2019 H2 2018 Change* Seats flown (m) 58.8 54.9 7.2% Passengers (m) 54.4 51.7 5.2% Load factor (%) 92.5% 94.2% (1.7)ppt Average sector length (km) 1,134 1,123 1.0% Revenue per seat - reported currency (£) 68.74 67.71 1.5% Revenue per seat - constant currency (£) 68.27 67.71 0.8% Headline cost per seat incl fuel - reported currency (£) 56.80 56.86 0.1% Headline cost per seat incl fuel - constant currency (£) 56.23 56.86 1.1% Headline cost per seat excl fuel - reported currency (£) 42.95 43.67 1.6% Headline cost per seat excl fuel - constant currency (£) 42.67 43.67 2.3% Headline profit before tax per seat - reported currency (£) 11.94 10.85 10.1%

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FY 2019 FY 2018 Chang ange* e* £ m £ m Total revenue 6,385 5,898 487 Headline costs: Headline costs excluding fuel (4,542) (4,136) (406) Fuel (1,416) (1,184) (232) Headline adline prof

• fit

it befor

• re tax

ax 427 578 (151 51) Headlin adline ROC OCE** ** 11.4% .4% 14.6 .6% (3.2 .2)ppt ppt Headline adline diluted luted EPS (pen ence) e) 87.8p .8p 117.4p 7.4p (29.6 .6)p Divide idend nd per shar are 43.9 .9p 58.6 .6p (14.7 4.7)p )p

Non-headline items: Sale and leaseback: gain / (loss) 2 (19) 21 Project Brexit (4) (7) 3 Tegel integration

• (40)

40 Commercial IT platform: credit / (charge) 2 (65) 67 Other 3 (2) 5 Tot

• tal

al profit

• fit befor

fore tax 430 445 445 (15)

Financial performance

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*Favourable/(adverse) ** FY19 upon adoption of IFRS16, FY18 including 7 x lease adjustment & restated for Swiss pension liability

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(0.98) (1.06)

£0.05 £0.33 £0.53 FY 2018 Reported £60.81 £61.94 £60.28 (£1.49) FX FY 2019 Reported Seasonality (Includes Easter) Impact from IFRS15 (£0.22) Monarch/ Ryanair CANX/ French IA (£0.33) Underlying H2 FY 2019 @ CC Underlying H1

RPS @ CC =(2.7%) 7%) Repo ported ed RPS = (1.8%)

(0.5%) +0.1% (0.4%) (2.4%) +0.5%

Revenue performance

Revenue per seat bridge

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*Favourable/(adverse)

costs

Headline cost per seat bridge

(£0.22) (£0.36) £0.52 £0.39 £0.11 (£0.66)

FX FY 2019 headlin line e cost per r seat at at CC CC Maintenance

£56.08

Crew Ownership costs

£56.74

FY 2019 headlin line e cost per r seat at at CC before

• re

fuel varia iance ce

£55.55

Airports & Ground Handling FY 2018 headlin line e cost per r seat at

£55.87

Overheads and Other Income Navigation

(£0.21) £0.32

FY 2019 headlin line e cost per r seat at Impact from IFRS adoption

(£0.23) (£0.53)

Fuel Disruption

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Headl dline CPS ex fuel @ CC = 0.8% Repo ported ed CPS = (1.5%) %)

*Favourable/(adverse)

Movement before IFRS impact

Impact of fuel & currency

*Favourable /(adverse)

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FY 2019 9 fuel l impac act FY 2019 FY 2018 Chang ange* e* Fuel l $ per metric ic tonn nne Market price 652 664 12 Effective price 604 590 (14) US dolla lar rate te Market price 1.27 1.34 (7) cents Effective price 1.32 1.36 (4) cents Difference 0.05 0.02 Actual tual cost t of fuel el £ per metric ic tonn nne 458 434 (24) 4) FY 2019 9 curren ency y impac act t on headline adline PBT* EUR UR CHF USD Othe her Total tal £m £m Revenue 37 16 3 (1) 55 Fuel

• (54)
• (54)

Headline costs excluding fuel

• (11)

(3) (1) (15) Total tal 37 37 5 (54) 4) (2) (14) 4)

Strong cash generation

Cash flow bridge

Cash generated from operations (excluding dividends): £1,098m Investing and financing

466 499 118 15 58 233 121 443 984 174 55 45

Ordinary dividend (FY’18) Increased borrowings

1,373 73

CAPEX Repayment

• f capital

element of leases under IFRS 16*** Other Operating profit Cash & MMDs post di div & tax paid id Cash & MMDs at 30 Sept ptem embe ber r 2019

1,576 76

Cash & MMDs at 1 Octobe

• ber

r 2018 * Other

• perating

Depreciation & amortisation Sale & leaseback proceeds Net working capital Tax paid

2,180

FX

> Net (debt)/ cash: £(326)m (FY’18: £396m) > Adjusted net debt:** £326m (FY’18: £738m)

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* Includes money market deposits but excludes restricted cash ** 2019 upon IFRS adoption, 2018 x7 lease basis *** Upon adoption of IFRS16, reclassified as Investing and Financing

Strong balance sheet BAA1 / BBB+

£m £m

30 Sept ptember mber 201 2019 30 Sept ptember mber 201 2018 (res estat tated) ed) Chang ange Goodwill and other intangible assets 561 546 15 Property, plant and equipment (excluding RoU assets) 4,661 4,140 521 RoU assets under IFRS 16 502

• 502

Derivative financial instruments 63 364 (301) Equity investments 48

• 48

Other assets (excluding cash and money market deposits) 542 539 3 Unearned revenue (1,069) (877) (192) Trade and other payables (1,050) (1,023) (27) Other liabilities (excluding debt)*** (947) (852) (95) Capital employed 3,311 2,837 474 Cash and money market deposits** 1,576 1,373 203 Debt (excluding lease liabilities) (1,324) (977) (347) Lease liabilities under IFRS 16 (578)

• (578)

Net (debt bt)/ )/cas ash (326) 396 (722) Net assets 2,985 3,233 (248)

£m £m

£m £m

Liquidity is supported by a revolving $500 million credit facility and a business interruption insurance policy

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** Excludes restricted cash *** Other liabilities includes a £47m post-employment benefit obligation in relation to Swiss retirement benefit scheme. 2018 has been restated accordingly

Utilising flexibility in fleet planning

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

Updated fleet plan

> Deferral of contracted delivery months for 12 aircraft: Moving from expected delivery in 2021 to dates in 2023+ > The exercise of 12 purchase options, guaranteeing our firm delivery positions in 2024 > A321 deliveries have been particularly susceptible to industrial assembly issues > easyJet have worked with Airbus to concentrate on delivering more A320s, where certainty of delivery is greater > Airbus and easyJet have pre-agreed compensation rates for delivery delays as part of its Purchase Agreement

13 331 331 352 353 358 361

330 309 304 354 365 383 280 300 320 340 360 380 400 1 2 3 4 5 Nu Numbe ber r of aircr rcraft

Min fleet plan Max fleet plan Base fleet plan FY’19 FY’20 FY’21 FY’22 FY’23

FY'20 FY'21 FY'22 FY'23

Growth Replacement & Owned Maintenance New IFRS Stds Other

Gross capital cashflows

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£1,200m £1,350m £1,100m £950m

H1 capacity outlook

H1 2020 (Oct 2019 to Mar 2020) as at 15 Nov 2019

Capacity change total short haul market Competitors on easyJet markets Capacity change easyJet markets easyJet capacity change 5.4% 3.6% 6.9% 14.5% 0.7% 0.4% 0.8% 1.7%

H1 FY19 H1 FY20

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forward bookings

H1 2020 (Oct 2019 to Mar 2020) as at 15 Nov 2019

16

91% 80% 53% 76% 21% 49% 92% 82% 55% 77% 23% 51% Oct Nov Dec Q1 Q2 H1

2018 2019

Operating hedges as at 30 September 2019

Fuel requirement US dollar requirement Euro Surplus Six months to 31 March 2020 74% @ $632/MT 70% @ 1.36 68% @ 1.11 Full year ending 30 September 2020 68% @ $655/MT 66% @ 1.36 67% @ 1.11 Full year ending 30 September 2021 45% @ $643/MT 46% @ 1.31 52% @ 1.10

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Fuel and foreign exchange hedging

Outlook

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Capacity (seats flown) > H1 c. 1.7% increase > FY c. 3% increase Revenue per seat at constant currency > H1 revenue per seat performance (excluding easyJet Holidays):

• Low to mid single digit increase

Cost per seat at constant currency > FY headline cost per seat excluding fuel (excluding easyJet Holidays):

• Up low single digits (at normal levels of disruption)

FX / Fuel* > FY: c.£40 million positive movement from foreign exchange rates on headline PBT

> £10m of this positive movement is part of the total fuel

bill

> FY: unit fuel costs £70 million to £140 million adverse > Expected total fuel cost c.£1.62 billion

> Includes c.£25m investment in carbon offsetting

easyJ syJet et holidays ays – At least st breake eakeven en in 2020

* Based on fuel spot price range of $600 - $700 includes impact of ETS carbon scheme prices GBP; EUR: 1.15 GBP: USD 1.28

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Ceo update

Johan Lundgren

Net zero carbon

easyJet holidays Investing in

• perational resilience

Data driven

FIRST MOVER - The next phase

EU airline industry First mover

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Our plan – delivering our strategy

#1 or #2 in primary airports Winning our customers’ loyalty The right people Innovating with data Value by efficiency Seamlessly connecting Europe with the warmest welcome in the sky

21

Maximise PBT/ seat Maximise ROCE Generate sustainable positive cash flows

#1 or #2 in primary airports

Delivering higher returns – AMS airport Increasing No #1 and #2 positions across the network

2012 2013 2014 2015 2016 2017 2018 2019

Seats flown (mils)

Year

• No. 2
• No. 1

> Strong correlation between strong performance and #1 or #2 positions > Investing in primary airports drives higher returns over time

Increased by 55% since 2012

22 Revenue per seat FY19 FY14 FY13 FY16 FY15 FY12 FY18 FY17 Capacity (seats)

Seats RPS

Base launch

easyJet brand getting stronger

First choice brand* Brand Affinity*

+4ppts +5ppts +3ppts +5ppts +1ppts +3ppts +2ppts +4ppts +3ppts +3ppts +1ppts +2ppts

Winning our customers’ loyalty

23

* FY 2019 vs FY 2018 Source: Millward Brown

Highest score ever

Value by efficiency

Strategic cost reduction programme

Efficiency and cost reduction projects for each cost line Strategic FX and fuel hedging programme

Fleet programme

Fleet up-gauging Modern, efficient fleet

Operational resilience programme

Schedule refinement First wave efficiency

Functioning programmes across the entire operation Continuing to drive an efficient operation and delivering ongoing cost savings

24

Standby aircraft efficiency Data Initiatives

Disruption costs decline

£26m

Total events Cancelations 3 hour delays 46% reduction 24% reduction 30% reduction

FY’19 vs FY’18

Disruption events decline Underpinned by the efficient use of data

Operational resilience – delivering results in 2019

£43m £76m £117m £178m £141m

0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 200.0

FY15 FY16 FY17 FY18 FY19

Welfare Comp ATC Delay Minutes

25

Innovating with data – operational resilience

1

OTP SIMULATOR > On-the-day simulation of each line of flying, to predict issues before they occur and enable proactive action to be taken

2

CREWING ANALYSER > Assessment of crew allocations that frequently cause problems, proactively re- planning to avoid future EU261 events

3

CREW STANDBY FORECASTER > Assessment of expected standby demand against known standby coverage, to identify hotspots and take action to address shortfalls prior to day of operation

4

SLOT PREDICTOR > Prediction of ATC delay programmes for the coming day, to optimise flight plans and minimise delays

Data products drive operational and cost efficiency

26

Innovating with data - late yield initiatives

YoY change in late yield curve (example of a UK outbound flight in September) YoY change in yield in final 7 days to departure, August and September by market (2019 vs 2018)

28% Germany 44% Italy 13% 27% 17% 22% Switzerland 14% 19% France 37% 8% UK

September – 7 days to departure August – 7 days to departure

> Shift in algorithm towards predictive demand management > Optimizes based on consumers’ anticipated price sensitivity > Live across Business network in Q4 with further roll-out expected throughout FY20 > Consistency of results across markets regardless of competitive environment > Continuous refinement of algorithms driving month on month improvements

27

Data products drive revenue efficiency

60 50 40 30 20 10 Average daily yield Days to departure

2019 2018

The right people

* Employee Net Promoter Score.

The right place to work Industry experts strengthen the team

Overall engagement score

8/10

High retention 6% - total turnover 5% - Cabin crew turnover 6% - pilot turnover

4.1 cc

Glassdoor rating

Key skills acquired for holidays, Loyalty, Business, IT, Data

eNPS*

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Garry Wilson

CEO easyJet holidays

Sam Kini

Chief Data & Information Officer

Peter Bellew

Chief Operating Officer

28

Announcements

30

Investing in easyJet holidays The Opportunity

Leading network for beach and city breaks Market leading Brand Loyalty and customer satisfaction

20m

People who flew with easyJet for leisure and booked accommodation elsewhere

> Set up a separate business and reporting structure > Attracted market leading, top end industry experience > Clarity around accountability and delivery of targets > No disruption to the core airline

£60bn per year

The UK alone is a £13 billion market

Famously flexible

> Across entire easyJet network > More flexible holiday durations and times > More weekend flying than any

• ther airline

31

EUROPE’S MOST LOVED HOTELS

> Handpicked hotels including over 500 direct hotel contracts > Curated by local industry experts > With a focus on quality

32

Innovating through tech

> Best in class technology, easily and quickly scaleable > Newest website on the market, focusing on ease of use and inspiration > Single customer log-in for easyJet and easyJet holidays

33

HOLIDAYS FOR EVERYONE (VALUE)

> Leveraging easyJet’s cost base > Focus on customer value > Maximising easyJet customer base and trusted brand

34

WHAT’s Coming

> Before Christmas

Website launch in UK, followed by marketing campaign

> 6th Jan

First holiday customers depart

> Spring 2020

Winter 20/21 holidays on sale

> Spring 2020

Summer 21 holidays on sale

> 2020

Rollout to next market

> Ongoing digital, data and yield improvements

35

Play Short video – which runs through:

• Website look and feel
• Booking process
• The end to end customer journey with

easyJet Holidays

36

Aviation impact on the environment

37

easyJet

One of the most efficient in Europe

Carbon emissions by industry*

77.07 40 50 60 70 80 90 100 110 120 2000 2005 2010 2015 2020

• 33.7%

> Transitioning fleet to the highly efficient A320neo family > Introduction of single engine taxiing > Use of sharklet wingtips > Optimisation of flight plans to ensure the most efficient routings and flight levels are selected

41% 24% 6% 3% 11% 7% 2.8% 2% 0% 1% 2%

Electricity and heat production Industrial Residential Commercial and public services Passenger road vehicles Road freight vehicles Aviation Shipping Other transport Rail Other

• Source(

rce(s):

): IEA, Roland Berger Analysis

CO CO2 per RPK

The world’s first major airline to operate net-zero carbon flights

> First major international airline to offset all carbon emissions

• n behalf of customers

> On all flights across the network > Beginning 19 November 2019 > Offset schemes accredited to highest verification standards – Gold Standard and VCS > Cost for FY20, c.£25m > Reinvent aviation – electric/hybrid, SAFs as become commercially viable > Airbus/easyJet Electric Plane Project Industry leading Differentiated position Increase customer retention and attraction Enhance the easyJet brand

38

*

* by offsetting the carbon emissions from the fuel used on the flights

39

TECHNOLOGY ROADMAP FOR SHORT HAUL AIRLINES

* Source rce(s): ): IEA, Roland Berger Analysis

De-carbonising aviation

2020 2035 2050

Conven entional ional Carbon bon Off ffset sets

Forestry, energy efficiency and clean energy generation projects

Ad Advanced nced Carbon bon Off ffset sets

Improved SAFs and Direct Air Carbon Capture (DACCS) commercially available at scale

Hybr brid d Electr ctric ic Aircr craft aft

~200 seat narrowbody with up to 50% CO2 reduction

Full Electr ctric ic Ai Aircr craf aft

~200 seat narrowbody with up to 100% CO2 reduction

2030

Delivering shareholder value

Maximise PBT/ seat Maximise ROCE Generate sustainable positive cash flows

delivering shareholder value

40

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

Q&A

Appendix

Brexit ready

>Structure and flying rights: >Operations – Robust solutions:

• Safety and regulatory – grace period on safety

certificates and spare parts

• People:
• Pilot Licenses
• Recruiting crew in the right places
• Some residence rights to accrue to UK and EU citizens
• Aircraft in the right place – UK (167), Europe

(136), Switzerland (28) >Ownership:

• c. 50% EEA ownership at present

>Consumer demand:

• UK demand remains strong – H1 2020 bookings

ahead of last year

• Flexible and disciplined fleet allocation to drive

highest returns

>Financially strong

• BBB+, Baa1
• High levels of liquidity

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* Favourable/(adverse)

2019 pre IFRS Changes IFRS Impact 2019 as reported 2018 Change* £ m £ m £ m £ m £ m Headline profit before tax 424 3 427 578 (151) Headline tax charge (78)

• (78)

(112) 34 Non-Headline items 18 (15) 3 (133) 136 Non-Headline tax (charge)/ credit (3)

• (3)

25 (28) T

• tal profit after tax

361 (12) 349 358 (9) T

• tal profit before tax

442 (12) 430 445 (15) Total tax charge (81) (81) (87) 6 T

• tal profit after tax

361 (12) 349 358 (9) Total effective tax rate 18.9% 19.7% 0.8ppt

44

PROFIT after tax

EPS, DIVIDENDS AND ROCE

*Favourable/(adverse) ** As seen in slide 7

FY 2019 FY 2018 (restate stated) d) Chang nge* e* Headline basic earnings per share (pence) 88.7 118.3 (25%) Headline diluted earnings per share (pence) 87.8 117.4 (25%) Total basic earnings per share (pence) 88.6 90.9 (3%) Total diluted earnings per share (pence) 87.8 90.2 (3%) Dividend per share (pence) 43.9 58.6 (25%) Headline return on capital employed (%)** 11.4% 14.6% (3.2ppt) Total return on capital employed (%)** 11.4% 11.7% (0.3ppt)

45

*Favourable/(adverse)

Total reported

Total 2019 2018 Change*

Passenger revenue 5,009 4,688 6.9% Ancillary revenue 1,376 1,210 13.7% Total revenue 6,385 5,898 8.3%

£ per seat reported

Total 2019 2018 Change*

Passenger revenue 47.71 49.23 (3.1)% Ancillary revenue 13.10 12.71 3.1% Total revenue 60.81 61.94 (1.8)%

£ per seat @ CC

Total 2019 2018 Change*

Passenger revenue 47.29 49.23 (3.9)% Ancillary revenue 12.99 12.71 2.2% Total revenue 60.28 61.94 (2.7%)

46

Revenue Total and Per Seat

*Favourable/(adverse)

• NB. IFRS 9,15 and 16 impact on cost per seat excluding fuel is £0.11 @ CC.

47

headline COST PER SEAT

Cost per r seat at exclu ludin ding fuel £ Varian riance ce at constan ant curren ency* cy* £ Varian riance ce at constan ant curren ency* cy* % Weigh ighted d varia iance ce at constan ant curren ency* cy* % Pre-IFR FRS varian iance ce at constan ant curren ency cy £ Driv ivers ers

Airports and ground handling 17.57 (0.19) (1.1)% (0.4)% (0.22)

> Structural cost programme savings offset by price increases in regulated and non-regulated airports > Favourable de-icing costs due to the Beast from the East impact from last year > Change in airport mix, mainly driven by annualisation of Tegel flying

Crew 8.18 (0.23) (2.9)% (0.5)% (0.23)

> Agreed inflationary increases in crew and pilot pay > Low attrition rates > Investment in operational resilience over the summer peak period

Navigation 3.89 0.32 7.6% 0.8% 0.32

> Year on year reduction in Eurocontrol rates

Maintenance 2.88 0.43 13.2% 1.0% (0.36)

> Favourable IFRS 16 impact and line maintenance savings > Up-gauging of the fleet > Inflationary price rises in aircraft cleaning and components

Overheads (Inc disruption cost) 5.86 1.00 14.7% 2.4% 0.79

> Lower number of disruption events, benefitting from easyJet’s operational resilience programme > IFRS impact mainly driven by the IFRS 15 disruption reclassification to revenue > Reduction in wet leasing costs due to high level in 2018 at Tegel > Partially offset by the cost of strategic initiatives and increase in headcount

Other income (0.27) 0.12 85.9% 0.3% 0.12

> Favourable mainly due to the Airbus compensation for late deliveries

Aircraft dry leasing 0.05 1.54 97.0% 3.6% (0.05)

> Favourable as a result of the impact of IFRS 16

Depreciation 4.61 (2.52) (120.3)% (6.0)% (0.22)

> New aircraft purchased, annualisation of FY’18 deliveries and the impact if IFRS16

Amortisation 0.14 0.01 10.5% 0.0% 0.01

> Remains relatively flat

Net Finance Charges 0.35 (0.16) (90.2)% (0.4)% 0.05

> Adverse impact if IFRS16, increased interest from new Eurobond, partially offset by income from higher yield deposits

Total Headline CPS excluding fuel 43.26 0.32 0.8% 0.8% 0.21 Fuel 13.48 (0.53) (4.3)%

> Increases in the effective price of fuel

Total Headline CPS 56.74 (0.21) (0.4)%

Non-headline items

2019 201 018 Desc scrip iptio ion £ m £ m

Sale and leaseback 2 (19)

The sale and leaseback of 10 A319 aircraft in FY’19 resulted in a gain on disposal

• f the assets of £2 million. In FY’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) (7)

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 (65)

FY’18 write down of IT assets under development and recognition of associated

• commitments. FY’19 release of the balance of the unused FY’18 accrual for

these commitments.

Tegel integration

• (40)

Following the acquisition of part of Air Berlin’s operations at Berlin Tegel airport there were costs in FY’18 of completing the transition process, including costs

• f converting the leased aircraft.

Organisational review

• (1)

The programme in FY’18 involved redundancy costs and associated third party adviser fees.

Balance sheet foreign exchange gain 2

• 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 1 (1)

Fair value adjustments associated with the cross-currency interest rate swaps put in place for the Eurobonds issued.

Total tal non-he headlin adline items 3 (133 33)

48

Currency impact

Revenue Costs FY 2019 FY 2018 FY 2019 FY 2018 Sterling 43% 45% 30% 29% Euro 46% 44% 38% 38% 39% US dollar 1% 1% 1% 26% 26% Other (principally Swiss franc) 10% 10% 6% 6% 6%

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

49

Description 2019* £m IFRS 15: Deferral of revenue to FY’20 and compensation payments offset against revenue (23) IFRS 15: Reclassification of compensation costs 18 Total tal IFRS 15 pre tax profit impact on FY’19 (5) IFRS 16: Reduction of airports and ground handling 3 IFRS 16: Reduction of other costs 3 IFRS 16: Reclassification of maintenance expense 85 IFRS 16: Reduction of leasing expense 182 IFRS 16: Increase in depreciation expense (244) IFRS 16: Increase in interest expense and FX (36) Total tal IFRS 16 pre tax profit impact on FY’19 (7) Total tal FY’19 pre tax profit impact of new accounting standards** (12)

*Favourable/(adverse) ** The P&L impact of IFRS 9 is immaterial

50

Impact of IFRS 15&16 on income statement

2019 2018 Change A319 (Leased) 56 53 3 A319 (owned) 69 79 (10) A319 Total 125 132 (7) A320 (Leased) 43 42 1 A320 (owned) 157 139 18 A320 20 Total 200 181 19 19 A321 21 (owned/Tot

• tal)

al) 6 2 4 Total l fleet 331 331 315 16 16 Leased 99 95 4 Number unencumbered 232 220 12 Percentage of A320's in fleet 60% 57% 3ppt Average seats per aircraft 175 172 2%

51

Increasing proportion of A320’s

* Finance lease aircraft originally classed as owned in 2018, now classified as leased aircraft in 2019 due to IFRS 16. 2018 restated above to re-classify as leased for comparison

Return on capital employed

£m £m 2019 Pre-IF IFRS S adoptio

• ption

201 2019 9 as repor ported ted 2018 8 (res estat tated) ed) Headline profit before interest and tax 440 466 595 Interest element of operating lease payments 62

• 51

Headline profit before interest and tax – adjusted 502 466 646 UK corporation tax rate 19% 19% 19% Normalised headline operating profit after tax (NOPAT) 407 377 523 Average shareholders’ equity 3,144 3,083 3,018 Average net debt/(cash) (276) 231 (377) Average capitalised leases 1,221

• 952

Average adjusted capital employed 4,089 3,314 3,593 Headline return on capital employed 9.9% 11.4% 14.6%

52

Change in accounting: > 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 adoption on 1 October 2018: > A one-off £87m (pre-tax) increase to unearned revenues has been recognised with a corresponding charge to retained earnings in respect of bookings made and recognised 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: > £92m of revenue which previously would have been recognised in FY’19 will now be recognised in FY’20. The net full year profit impact of this standard is therefore a reduction of £5m.

53

Adoption of IFRS 15

Change in accounting: > 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. Operating 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 early adoption on 1 October 2018: > £531m of lease liabilities and £497m of Right of Use Assets were recognised at 1 October 2018, with a corresponding net decrease to retained earnings. FY’19 impact: > The additional depreciation expense of £244m and finance charges of £36m are offset by the reductions in lease expense

• f £182m, maintenance expense of £85m and Airports, Ground Handling and other costs of £6m.

54

Adoption of IFRS 16

Change in accounting: > Some changes have been applied to the classification and measurement of financial instruments. Equity investments are required to be fair valued. > 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 adoption on 1 October 2018: > Equity investment fair value of £54m has been recognised at transition with a corresponding increase in retained earnings. FY’19 impact: > The movement in the fair value of the equity investment in the year resulted in a £6m reduction recognised within Other Comprehensive Income. > The full year profit impact of this standard is immaterial.

55

Adoption of IFRS 9

Q4 Passenger statistics

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July 2019 2018 Change

Passengers 9,469,781 9,122,137 3.8% Load Factor 94.3% 96.4%

• 2.1ppt

August ust 2019 2018 Change

Passengers 9,578,600 9,327,582 2.7% Load Factor 94.3% 95.8%

• 1.5ppt

Sep eptembe tember 2019 2018 Change

Passengers 8,972,901 8,816,427 1.8% Load Factor 91.4% 92.8%

• 1.4ppt

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