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18 June 2013
Introduction
John Barton Chairman
2 2
Fleet order
Carolyn McCall Chief Executive Officer
3 3
1. Drive demand, conversion and yield across Europe 2. Build strong number 1 and 2 network positions 3. Maintain cost advantage 4. Disciplined use of capital
Sustainable growth
(slightly in excess of market c. 3% to 5% per annum)
Improved returns Tangible and regular cash returns via 3x cover dividend
Ryanair
16%
Lufthansa
12%
Norwegian
9%
Vueling
7%
airberlin
3%
IAG
1%
Vueling 7%
easyJet 16% Norwegian 9% 9.0% 12.0%
Ryanair 16%
15.0%
300
31 39 15
250
200
150
230 have been delivered as at 31 May 2013 15 further deliveries by 2014 39 options and 31 purchase rights remaining
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230
50
2017 / Southwest
13%2
Bombardier CSeries
Engine P&W PurePower PW1000G
20%3
CFM LEAP
Airbus A320neo
Boeing 737 MAX
1. 2. 3.
Manufacturers estimate vs. current generation A320 Manufacturers estimate vs. todays most efficient single aisle airplanes Manufacturers estimate vs. in production aircraft in its class
2012
Fleet planning
Deliver capacity needs of 10 year fleet plan Minimise investment in current generation aircraft Fleet delivery flexibility
Maximise cost / benefit Minimise cost per seat Minimise P&L impact of any transaction Price Commercial benefits Support Guarantees
2017 - 2022 New Generation contract 100 new generation A320neo aircraft Aircraft for delivery from 2017 to 2022 Engines
ceiling price agreed with either CFM or Pratt & Whitney price may improve
Aircraft for delivery between 2015 and 2017 6 options2 and 29 purchase rights remaining
1. 2.
As part of the exercise of options the final 2 remaining ex-GB Airways deliveries have been cancelled Expire 30 September 2013
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Airbus also demonstrated flexibility and capacity to support easyJets fleet plan easyJet has secured favourable delivery dates from Airbus
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Move to new generation will allow easyJet to maintain its cost advantage
4-5%
Fuel
Maintenance
Crew
Ownership
Other
Fuel
Ownership
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Profitable opportunities for easyJet to grow capacity at c.3% to 5% a year 2% to 4% capacity growth from new routes or increased frequencies 1% capacity increase from larger aircraft on existing routes
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2016
241 39% 61% 7.2 5.4% 247 217
2017
256 42% 57% 1% 7.6 4.8% 262 223
2018
261 41% 52% 7% 7.7 3.0% 279 185
2019
264 41% 44% 15% 7.8 3.0% 300 167
2020
269 40% 41% 19% 8.3 3.0% 301 177
2021
276 39% 33% 28% 8.0 2.8% 306 162
2022
276 39% 25% 36% 7.9 3.1% 298 165
1. At the end of the relevant Financial Year 2. Based on fleet plan base case 3. Does not include the purchase rights
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FY22
FY21
241
175
125 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
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Key assumptions:
A maximum age of 16 years in the period 2014 to 2022; An average aviation fuel cost of US$1,100 per metric tonne; and An average US$:GBP exchange rate of US$1.60:1.00 and a Euro/GBP exchange rate of 1.18:1.00
Sensitivities show the business case remains robust at varying levels of fuel price and exchange rates
Externally validated:
Ernst & Young LLP reviewed the construction of the financial models on the basis of the assumptions agreed by the Board
BDO LLP reviewed the controls and the overall governance around the process
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Measures
Improve profit before tax per seat to 5 1 ROCE including operating leases
Ensure robust capital structure Maximum gearing of 50% Return excess capital to Target 4m cash per aircraft Cap of 10m adjusted net debt per Shareholders Maintain sufficient level of liquidity aircraft to manage through the cycle and industry shocks Target consistent and continuous payouts 3 times cover, subject to meeting gearing and liquidity targets Annual payments based on full year profit after tax Consider returns over 3 times cover to reduce excess capital Target of c.70% owned aircraft, c.30% leased aircraft
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Dividend Policy
Aircraft Ownership
Return on capital employedNormalised profit after tax divided by average capital employed. Normalised profit after tax comprises operating profit adjusted for implied interest on operating leases (calculated at one-third of the charge for aircraft dry leasing for the year), less tax calculated divided by average capital employed at the standard rate of corporation tax ruling at the end of the year. Average capital employed comprises the average sum of Shareholders equity and adjusted net debt (as defined in gearing) at the start and end of the year;
2013 20142
37% 39% 24% 100%
2015-20172
48% 12% 40% 100%
2018-20222
16% 54% 30% 100%
18%
10%
c.8%
10% - 12%
Fleet acquisition and overhaul expenditure expected to be funded through a combination of easyJets internal resources, cashflow, sale and leaseback transactions and debt
1 . Based on actual revenue for the 2005 2012 Financial Years 2 . Based on estimated revenue
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Conclusion
Carolyn McCall Chief Executive Officer
21 21
Conclusion
Continued execution of a strategy that has delivered returns and growth for shareholders
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Q&A
23 23
Appendix
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easyJet LCU
390 31 421 -101 320 24%
Ryanair LCU
718 33 751 -94 657 13%
IAG LCU
-52 143 91 -43 48 30%
Ave. equity Ave. net debt / (cash) Ave. capitalised leases (7.0x) Average capital employed
16%
16%
7%
9%
3%
1%
0%
12%
16%
14%
8%
9%
4%
1%
0%
13%
1. 2. 3. 4. 5.
Data from company filings sourced by Goldman Sachs. Local corporation tax rates for 2012 sourced from KPMG www.kpmg.com/global/en/services/tax/tax-tools. ROCE shown calculated using leases capitalised at 7x for 12 months to 31 March 2013. Lufthansa ROCE is stated including the impact of IAS19 on book equity. Lufthansa have written down a large proportion of book equity under the IAS19 rules. Air France KLM not shown on graph due to 0% ROCE for 12 months to 31 March 2013.
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Disclaimer
This presentation has been furnished to you solely for your information on a confidential basis and may not be reproduced, redistributed or passed on to any other person, directly or indirectly, 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 i t 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 United States. Securities may not be offered or sold into the United States absent registration under the US Securities Act of 1933, or an exemption there from. This document should not be relied upon, or form the basis for any decision or action, by any person. easyJet nor any other party or any of their respective subsidiary undertakings or affiliates or any of such person's officers or employees, advisors or other representatives, accepts any liability whatsoever (whether in negligence or otherwise) arising directly or indirectly from the use of this document or its contents or otherwise arising in connection with the presentation. This document has not been approved by any competent regulatory or supervisory authority. Certain statements in this presentation contain forward-looking statements These forward-looking statements can be identified by the use of forward-looking terminology, including the terms believes, estimates, forecasts, plans, prepares, anticipates, expects, intends, projects, will, targets, aims, may, would, could, continue or, in each case, their negative or other variations or comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of easyJet or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In particular, certain statements in this presentation relating to future financial results, plans and expectations regarding easyJets business, growth and profitability, as well as the gener al economic conditions to which easyJet is exposed, are forward-looking in nature and may be affected by factors including, but not limited to, those set out in Part 2 (Risk Factors) of the Circular. It is strongly recommended that Shareholders read Part 2 (Risk Factors) of the Circular for a more complete discussion of the factors which could affect easyJets future performance and the industry in which it operates in the context of the New Framework Arrangements. By attending or reading this presentation you agree to be bound by the foregoing limitations.
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