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Introduction Johan Lundgren - CEO
2018 – building on strong foundations Structural advantages deliver strong performance
> Headline PBT growth of 41%
> Strong revenue, up 17%
RPS Up 4.7% (@cc)
Ancillary revenue per seat (@cc) up 9.9%
> Cost programme delivers £107m in savings
> #1 airline for value in Europe*
> Tegel successfully executed
> Customer satisfaction up despite unprecedented
disruption levels in the industry
> Best performing airline in Europe in 2018
> 43% increase in ordinary dividend
3
Well positioned for the future
> Strong balance sheet
> Well prepared for Brexit
> Flexible fleet position
> Advantaged fuel hedge
Investing in people
> New leadership team in place
> Strong pipeline of Pilot and Crew recruitment
> Strong employee engagement scores (eNPS)
New initiatives to drive margins and returns
> Holidays, Business, Loyalty, Data
> Operational Resilience Programme
easyJet – A structural winner * Skyscanner award
3
Financial review Andrew Findlay - CFO
performance highlights FY 2018 FY 2017 Change*
Seats flown (m) 95.2 86.7 9.8%
Passengers (m) 88.5 80.2 10.2%
Load factor (%) 92.9% 92.6% +0.3ppt
Average sector length (km) 1,101 1,105 (0.4%)
Revenue per seat - reported currency (£) 61.94 58.23 6.4%
Revenue per seat - constant currency (£) 60.96 58.23 4.7%
Headline cost per seat incl fuel - reported currency (£) 55.87 53.52 (4.4%)
Headline cost per seat incl fuel - constant currency (£) 54.97 53.52 (2.7%)
Headline cost per seat excl fuel - reported currency (£) 43.43 41.27 (5.3%)
Headline cost per seat excl fuel - constant currency (£) 43.25 41.27 (4.8%)
Headline profit before tax per seat 6.07 4.71 28.7%
* Favourable/(adverse)
5
Financial performance FY 2018
£ m FY 2017
£ m Change*
Total revenue 5,898 5,047 851
Headline costs:
Headline costs excluding fuel (4,136) (3,577) (559)
Fuel (1,184) (1,062) (122)
Headline profit before tax 578 408 170
Headline ROCE – including 7x lease 14.4% 11.9% 2.5ppt
Headline diluted EPS (pence) 117.4 81.9 35.5
Non-headline items:
Commercial IT platform charge (65) - (65)
Tegel integration (40) - (40)
Sale and leaseback charge (19) (16) (3)
Other (9) (7) (2)
Total profit before tax 445 385 60
* Favourable/(adverse)
6
Revenue performance – ex-Tegel
7
RPS bridge
FY 2018
£63.09
FX
£0.95
FY 2018 @ CC
£62.14
Passenger revenue
£0.59
Ancillary revenue
£1.34
Monarch exit Ryanair cancellations FR industrial action
£1.98
FY 2017
£58.23
+3.4%
+2.3%
+1.0%
12% growth in ancillary RPS versus 2017
+1.6% +6.7%
+8.3%
Controlled costs in a disrupted year
8
Headline CPS bridge (ex-Tegel) > Ex-Tegel headline cost per seat at constant currency: 2.0% increase
> Ex-Tegel headline cost per seat ex fuel at constant currency: 3.8% increase
Ownership costs
FY 2017 headline cost per
seat
Other and inflation
£0.29
£0.18
Fleet mix
£1.05
easyJet cost programme
savings
£0.22
£0.53
£0.75
Crew pay and productivity
£53.52
£0.52
£0.88 £55.45
P&L FX FY 2018 headline cost per
seat
Disruption and
de-icing
£0.67
Fuel Regulated airports inflation
£0.56
Employee incentive
costs
£55.09
FY 2018 headline cost
per seat at CC before
fuel variance
CPS ex fuel increased by 1.1% (in-line with original guidance)
Tegel operation
9
FY 2018
Seats flown (m) 4.9
Passengers (m) 3.9
Load factor (%) 80.6%
Average sector length (km) 836
FY 2018
£m (reported)
Revenue 198
Headline cost including fuel (310)
Headline cost excluding fuel (250)
Headline loss before tax (112)
Non-headline integration costs (40)
Total loss before tax (152)
> Recruitment and training executed to plan
> Now 23 easyJet aircraft based at Tegel:
Replacing wet-leases with own fleet
> As at 30 September 2018, 665 pilots and cabin crew were working from the base
> FY OTP = 82%
> Total loss less than original expectation at £152m
> Progress continues:
Schedule optimisation
More leisure, SXF-TXL swaps
Impact of fuel & currency
10
FY 2018 fuel impact FY 2018 FY 2017 Change*
Fuel $ per metric tonne
Market price 664 501 (163)
Effective price 590 596 6
US dollar rate
Market price 1.34 1.27 7 cents
Effective price 1.36 1.45 (9 cents)
Difference 0.02 0.18
Actual cost of fuel £ per metric tonne 434 412 (22)
FY 2018 currency impact on headline PBT* EUR CHF USD Other Total
£m
Revenue 96 (1) (3) 1 93
Fuel - - (68) - (68)
Headline costs excluding fuel (24) 14 (6) (1) (17)
Total 72 13 (77) - 8
* Favourable/(adverse)
Advantaged hedge
Strong cash generation
11
*Leases capitalised at 7x ** Includes money market deposits but excludes restricted cash
Cash flow bridge > Net cash: £396m (FY’17: £357m)
> Adjusted net debt: £738m (FY’17: £413m)*
460
214 64
326
151
74
162
106
35
977 4 41
17
Sale & leaseback proceeds
Tegel consideration
CAPEX Other Cash & MMDs at 30 September
2018**
2,307
Cash & MMDs at 1 October
2017**
Operating profit
1,373
Depreciation & amortisation
Loss on disposal of Intangibles
and PP&E
Increase in restricted
cash
Net working capital
Tax paid Other operating
1,328
FX Ordinary dividend (FY’17)
Cash & MMDs post
div & tax paid
Growth
Replacement / other
Cash generated from operations (excluding dividends): £1,215m
Investing and financing
Strong balance sheet Baa1 / BBB+
12
£m 30 September 2018 30 September 2017
Goodwill and other intangible assets 546 544
Property, plant and equipment 4,140 3,525
Derivative financial instruments 364 92
Other assets (excluding cash and money market deposits) 541 356
Unearned revenue (877) (727)
Other liabilities (excluding debt) (1,851) (1,345)
Capital employed 2,863 2,445
Cash and money market deposits* 1,373 1,328
Debt (977) (971)
Net cash 396 357
Net assets 3,259 2,802
Liquidity is supported by two revolving credit facilities (one $500 million facility and one £250 million facility) and a business interruption insurance policy
* Excludes restricted cash
Fuel and foreign exchange hedging
13
Fuel requirement US dollar requirement Euro surplus
Six months ending March 2019 69% @ $567/MT 70% @ 1.31 69% @ 1.14
Full year ending 30 September 2019 65% @ $571/MT 66% @ 1.33 68% @ 1.13
Full year ending 30 September 2020 45% @ $654/MT 46% @ 1.38 47% @ 1.10
As at 30 September 2018
• Exercise of purchase rights to firm orders for 17 A320neo
• Deferral of delivery dates of 18 A320neo aircraft by up to 24 months; and
• Conversion of 25 purchase rights for A320neo into purchase options
• Securing delivery slots in 2024.
Utilising flexibility in fleet planning
14
- Downside cases assume sale at 16 years of age
Max fleet plan
Min fleet plan
Fleet announcement
Increased flexibility
315
329
359
367
385
352
338
316
295
315
335
355
375
395
FY2018 FY2019 FY2020 FY2021 FY2022
Gross capital expenditure
15
c. £800m
FY’22 FY’19 FY’20
c. £1,000m
FY’21
c. £1,000m c. £1,000m Fleet capex
Owned maintenance & Other
- Not including impact from IFRS 16 accounting standard
93%
86%
60%
22%
51%
11% 7%
91%
82%
55%
21%
50%
11% 8%
Oct Nov Dec Q2 H1 Q3 H2
FY18 FY19
2019 forward bookings
16
H1 2019 (October 2018 to March 2019) as at 16 November 2018 (Including Tegel bookings)
Would be in-line with
H1’17 when excluding
Tegel & 2018 one-offs
6.1%
0.6%
3.2%
7.8%
6.0%
4.3%
7.5%
15.0%
Capacity change total SH Market Competitors on easyJet markets Capacity Change easyJet markets easyJet capacity change
H1 FY18
H1 FY19
H1’19 market capacity outlook
17
H1 2019 (October 2018 to March 2019) as at 7 November 2018 – Source OAG
4.9
H1’19 easyJet growth
18
H1 2019 (October 2018 to March 2019)
1.0%
7.0%
Manchester growth
Tegel Winter’18 capacity growth
4.9%
Up-gauging Annualisation & underlying growth
1.9%
1.1%
Winter’17 Cancellations
Strategic growth 8.0%
Non-flying growth 3.0%
Organic growth
15.0%
4.0%
Capacity (seats flown) > FY c.+10% increase; H1 c.15% increase Revenue per seat at constant currency > H1 revenue per seat performance:
Down low to mid single digits > Updated for IFRS 15 :
H1 revenue per seat performance: Down mid single digits
Cost per seat at constant currency > FY headline cost per seat excluding fuel:
c. Flat (assuming normal levels of disruption) > Updated for IFRS 15 :
FY headline cost per seat excluding fuel: Slight decrease (assuming normal levels of disruption)
FX / Fuel* > FY: c.£10 million adverse movement from
foreign exchange rates on headline PBT
> FY: unit fuel costs £50 million to £100 million adverse > Expected total fuel cost c.£1.5 billion Total Capex
> Total capex spend c.£1.0 billion
2019 Outlook
19
H1 2019 (1 Oct 2018 to 31 Mar 2019) * Based on fuel spot price range of $675 - $760 includes impact of ETS carbon scheme prices GBP; EUR: 1.12 GBP: USD 1.28
strategic review Johan Lundgren - CEO
Seamlessly connecting Europe with the warmest welcome in the sky
Our purpose
Our priorities
Our promise
#1 or #2 in primary airports
Giving customers the leading offer in the airports they want to fly to.
Winning our customers’ loyalty
Making it easy, enjoyable and affordable to travel again and again for business and holidays.
The right people
Creating an inclusive and energising environment that attracts the right people and inspires everyone to learn and grow.
Innovating with data
Using the millions of data-points we collect to make smart decisions and shape the future of travel, as the world’s leading data driven airline.
Value by efficiency
We are low cost, driving efficiency and investing only where it matters to our customers and our people.
We are:
Safe and responsible On our customers’ side
In it together Always efficient
Forward thinking
Our plan
21
Our priorities – evolution not revolution
22
These metrics will collectively drive our performance
Profit per seat
OTP CSAT Score ROCE CO2 emissions
per pax EPS
#1 or #2 in primary airports
Giving customers the leading offer in the airports they want to fly to.
Winning our customers’ loyalty
Making it easy, enjoyable and affordable to travel again and again for business and holidays.
The right people
Creating an inclusive and energising environment that attracts the right people and inspires everyone to learn and grow.
Innovating with data
Using the millions of data-points we collect to make smart decisions and shape the future of travel, as the world’s leading data driven airline.
Value by efficiency
We are low cost, driving efficiency and investing only where it matters to our customers and our people.
#1 or #2 in primary airports #1 or #2 in primary airports
23
Leading network of No 1 & 2 positions Number 1 position
Number 2 position
FY’2018 CPBH
FY’2014 CPBH
Delivering increasing returns
33% increase in capacity
2014 2018
Airports with #1/2 positions 44 51
Capacity at bases with #1/2 positions 49m 62m
Capacity at #1/2 positions 56m 71m
CPBH = Contribution per block hour
Ave CPBH increased by c.20% over the cycle
New number 1 positions
1
1
1 Split
1
1 1
1
1 1 1
Much more to go for Much more to go for
24
No 1 & 2 Airports 60m
Seats flown by legacy carriers on
easyJet routes
No 1 & 2 positions – Market share on easyJet routes
Legacy carriers remain easyJet’s main competitors
> London Gatwick
> Geneva
> Basel
> Edinburgh
> Nice
> Berlin
> Venice
> Belfast
> Manchester
> Paris CDG
> Toulouse
> Amsterdam
Legacy / other, 36%
LCC's, 20%
easyJet , 44%
Number 1 positions include
Number 2 positions include
Great Offer Leading Brand Loyal Customers
> Leading network
> Affordable fares
> Continual innovation
> Customer focused
> The right people
Holidays
Winning our customers’ loyalty
25 - Rankings based off an average across the following markets – UK, France, Italy, Switzerland, Germany
Source: Brand Tracker
Leading airline for value for money
Leading LCC for Serious Consideration
More trips per year
Higher ancillary spend per customer
Much more to go for
Rank: 1st
Rank: 1st
Higher yield per year
Business
Loyalty
> 2x More valuable
easyJet holidays
26
The Opportunity What we have today
Leading network for beach and city breaks
Market leading Brand Loyalty and customer
satisfaction
1 In easyJet’s top 29 destinations by capacity
20m People who flew with easyJet for leisure and
booked accommodation elsewhere
> 500k bookings
> Despite 20m easyJet passengers booking accommodation elsewhere
Under-invested
> Lack of functionality
> Not in sync with easyJet.com Sub-optimal technology
> No personalisation
> No pricing control
> Commission based
Lack control of final product
Best Value Airline award
CSAT Despite disruption experienced in 2018
27
> Flight focused > No hotel
relationships > Commoditised
hotels
Offer Booking experience
> Two paths > Non-differentiated
offers > Poor user
experience
Flight Destination
> Great customer offer
> Focus of easyJet experience
> Limited offer of add-ons
> No effort to understand customer needs
> Leading flight offer > Better value > Targeted hotel
offers
> Seamless booking > Better user
experience > Customised offers
> Great customer offer
> Part of broader easyJet experience
> End-to-end customer offer
> Destination specific add-ons
Targets / Key dates
> Launch easyJet Holidays in late 2019
New proposition
New content
New website / platform
2019
> Direct relationships with Europe’s most loved hotels
> Deliver meaningful profit improvement
2020
Holidays - delivering the benefits
From
To
£40.2bn
Total business travel market just in the UK*
28 * Data set taken from GBTA/PWC studies
The Opportunity What we have today
Market leading primary airport network in
Europe
Comparable offer to legacy carriers, at a
lower price
With an improved offer to come
> 15m passengers in 2018
> 17% growth vs 2017
17% of total passengers
> easyJet Plus
> Flight Club Basic Loyalty programme
> Use of schedule to drive business travel
> Not optimum use of peak time slots
Opportunistic scheduling
easyJet business
Best low cost airline award
29
> Relationship with leading companies
> Limited tools
Procurement Booking experience
> Limited channels > Same as leisure
customer booking
Flight Support
> #1 and #2 airports > “one-size fits all”
> No post-travel tools > No loyalty offer
> Relationship with leading companies
> Corporate Flight Club
> Expanded tools
> Tailored experience > #1 and #2 airports > More product
customisation > Targeted schedule
improvements
> Duty of care tool > VAT invoicing > Building loyalty offer
Targets / Key dates
> Schedule optimisation
> Launch of Corporate Flight Club
> Continued growth in business passengers
> New business bundles
2019
> Continued schedule optimisation
> Increased penetration in business routes
> Enhance easyJet Plus
> New tools (SME portal)
2020
Business - delivering the benefits
From
To
30
The Opportunity What we have today
> 66% of seats in FY18 were booked by customers who had also booked with easyJet in the previous 2 years
> Return customers buy twice as many flights per year than first timers
> easyJet Plus and Flight Club consistently drive incremental YOY revenue
Incremental Ticket
Revenue
Incremental Ancillary Revenue
Incremental Partner
Revenue
easyJet loyalty
31
> Flight Club > Ad-hoc on board
Recognise loyalty Reward easyJet flying
> easyJet Plus
Redemption Engagement
> Flight Club > Surprise & Delight > New segments
> easyJet Plus > Earn points for all
easyJet purchases > Partnerships that
earn rewards
> Range of products > Integrate with
product > Benefit bundles > Points + Cash
> Travel rewards > Boosted bundles > Enhanced offers
Targets / Key dates
2019
Loyalty - delivering the benefits
From
To 2020
> Enhance easyJet Plus and Flight Club
> Loyalty technology
> Programme partnerships
> Define member experience
> Launch programme in UK
> Segment strategies
> Build partnership ecosystem
> Link to easyJet Holidays
> European expansion
> Business Rewards programme
> Continue partnership growth
Value by efficiency Delivering £££ savings Up-gauging – c. 1% CPS saving per year
New generation aircraft delivering CPS savings
A319 CEO – 156 seats
A320 CEO – 180 / 186 seats
A320 NEO – 186 seats
A321 NEO – 235 seats
Current generation
A319
5% -6%
New generation A320neo
New generation A321neo
Current generation
A320
6% -7%
8% -9%
Value by efficiency
32
> £107m savings in FY 2018
> Drives operational excellence
> Supports reliable decision making
> Reduces complexity
> Direct links to effective use of data
Over £500m in cost reductions delivered since 2011
Disruption – an industry wide issue
11.310.5
9.79.3
11.7
De
pa
rtu
re d
ela
y (
min
s/fl
igh
t) 5.8% CAGR
2018E 2017 2016 2015 2014
> Airspace operating environment is increasingly constrained
> Under resourced ATC across Europe
> Limited change to ATC and airport infrastructure (Lack of investment)
> Increasing knock on effects from strikes and weather
> 27,708 cancelled flights across Europe (1st July – 12th Aug 2018)
Network delay growth – All airlines1
Disruption – an industry wide issue
33 1 - Includes all airlines into an aggregated network view Source: Annual reports, EuroControl European Network Ops Plan (2014-2022)
**easyJet and other airlines continue to lobby the regulatory bodies across Europe as well as working with the A4E to fast track improvements to the current issues faced by the industry**
easyJet Operational Resilience Programme
Build:
Execute:
Recover:
Invest intelligently in schedule, aircraft and crew to enable a resilient operation that is set up to deliver.
Deliver a robust operation through a combination of predictive tools including automation and optimisation.
Improve the customer experience during disruption, minimising impact and preserving customer satisfaction.
Current actions being implemented:
• Standby Aircraft Task Force:
o New standby aircraft demand forecasting to inform aircraft requirement for 2019
• First Wave Focus
o Process changes, metrics, and communication measures to improve start of the day
• Better use of data and analytics
o Operational On Time Performance tool
o Optym schedule development
• Tactical schedule and crew resilience
o Tactical changes to schedule and crew designs for Summer 19
Disruption – an opportunity for CSAT & Cost
34
The Operational Resilience Programme is an opportunity to deliver a better customer experience while also cutting cost
> Industry leading crew
> New leadership team to deliver Our Plan
> Industry leading experts
The right people
35
Overall engagement
score
8/10
8.9 high engagement
score for Tegel
6.6 Growth score –
most positive community – Pilots
Cabin Crew eNPS
41
A good place to work.
> Higher retention
• 6.5% - total turnover
• 4.9% - pilot turnover
4.2 cc Glassdoor
rating
Web basedMarketing & Campaigns
Operation Optimisation
Service OptimisationNetworks and
Flights Scheduling
AI Personal, Assistant
Disruption Management
AutomationPricing
and Market
Forecast
Enhancing all aspects of the business
Innovating with data
36
Improve customer experience
Drive revenue
Reduce cost Improve operational
efficiency
DATA
> 50 projects already under way
> Senior data personnel and structure in place
> 28 data scientists in place (50 targeted)
Becoming the most data driven airline in the world
Better prepared for Brexit (1)
37
1. Structure and flying rights:
• Robust post Brexit structure
o Three airlines in place: United Kingdom, Austria, Switzerland
• Had confirmation that as long as the UK reciprocates the EU will allow UK carriers to fly to and from the EU
• The majority of our network would be unaffected anyway
2. Operations – Robust solutions:
• Safety and regulatory – grace period on safety certificates and spare parts
o Incremental spare parts now split between the UK and Europe
• People:
o Pilot Licenses
o Recruiting crew in the right places
o Some residence rights to accrue to UK and EU citizens
• Aircraft in the right place – UK (170), Europe (117), Switzerland (28)
Confident that flying will continue even in the event of a no deal Brexit
Flows % of current
capacity
UK – EU27 35%
All other 65%
Better prepared for Brexit (2)
38
3. Ownership:
• 47% EEA ownership at present
• Articles of Association allow the Board to take action to satisfy ownership and control requirements
• Including the right to suspend voting rights and/or forcing shareholders to sell their shares
• easyJet has no current intention to do this but will keep its options open whilst Brexit negotiations are ongoing
4. Consumer demand:
• UK demand remains strong – H2 bookings ahead of last year
• Flexible and disciplined fleet allocation to drive highest returns
5. Financially strong
• BBB+, Baa1
• High levels of liquidity
Confident that flying will continue even in the event of a no deal Brexit
Our priorities – delivering shareholder value
39
Maximise ROCE
Generate sustainable positive cash flows
Maximise PBT/ seat
#1 or #2 in primary airports
Giving customers the leading offer in the airports they want to fly to.
Winning our customers’ loyalty
Making it easy, enjoyable and affordable to travel again and again for business and holidays.
The right people
Creating an inclusive and energising environment that attracts the right people and inspires everyone to learn and grow.
Innovating with data
Using the millions of data-points we collect to make smart decisions and shape the future of travel, as the world’s leading data driven airline.
Value by efficiency
We are low cost, driving efficiency and investing only where it matters to our customers and our people.
Appendix
Adoption of IFRS 15
41
Change in accounting:
• Revenue recognition from certain revenue streams, principally administration and change fees, will be 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, will be offset against revenues recognised, with the excess compensation continuing to be recorded within expenses.
Impact on adoption on 1 October 2018:
• A one-off £80 million increase to unearned revenues will be recognised with a corresponding charge to retained earnings (in respect of bookings made in the year ended 30 September 2018 and recognsied in revenue in FY’18, for flights in the following financial year). These revenues will be recognised again in FY’19 at the date of flight.
FY’19 impact:
• The anticipated full year profit impact of this change is expected to be immaterial.
• A higher proportion of annual revenues will be recognised in the second half of the year (approximately £40 million of revenue will be deferred until H2).
• Revenue and cost are both expected to decrease by approximately £20 million as a result of the reclassification of compensation payments.
Adoption of IFRS 16
42
Change in accounting:
• All aircraft operating leases will be 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 will be 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 will be capitalised to the right-of-use asset and depreciated immediately rather than recognised within maintenance costs in the Income Statement.
Impact on adoption on 1 October 2018:
• Approximately £545 million of lease liabilities and £510 million of Right of Use Assets will be recognised, with a corresponding decrease to retained earnings.
FY’19 impact:
• The anticipated full year profit impact of this change is expected to be immaterial.
• IFRS 16 is not expected to have a material impact on the Income statement as the annual operating lease expenses and maintenance charges will be replaced by anticipated similar levels of depreciation and interest expense.
• Headline ROCE is expected to improve by circa 1.5 percentage points.
Profit after tax £ m FY 2018 FY 2017 Change*
Headline profit before tax 578 408 41.4%
Headline tax charge (112) (83) (33.3%)
Headline profit after tax 466 325 43.5%
Total profit before tax 445 385 15.5%
Total tax charge (87) (80) (9.0%)
Total profit after tax 358 305 17.3%
Effective tax rate 19.7% 20.8% 1.1ppt
* Favourable/(adverse)
43
EPS, Dividends and ROCE FY 2018 FY 2017 Change*
Headline basic earnings per share (pence) 118.3 82.5 43.4%
Headline diluted earnings per share (pence) 117.4 81.9 43.3%
Total basic earnings per share (pence) 90.9 77.4 17.4%
Total diluted earnings per share (pence) 90.2 76.8 17.4%
Dividend per share (pence) 58.6 40.9 43.3%
Headline return on capital employed (%) 14.4% 11.9% 2.5ppt
Total return on capital employed (%) 11.5% 11.3% 0.2ppt
* Favourable/(adverse)
44
Headline cost per seat – ex-Tegel
45
Cost per seat excluding
fuel £
Variance at
constant currency*
£
Weighted variance
(ex fuel) at constant currency*
%
Key drivers
Airports and ground handling 17.07 (0.14) (0.3%) > Annualised increases in charges at regulated airports and increased de-icing costs > Investment in ground handling at Gatwick through partnership with DHL > Offset by savings from volume deals and renegotiated airport and ground handling contracts
Crew 8.08 (0.63) (1.5%)
> Agreed inflationary increases in crew and pilot pay > Higher crew incentive payments, due to our strong financial performance > Adverse productivity driven by investment in resilience (retention over winter periods) and increased disruption
Overheads 6.28 (0.58) (1.4%) > Higher disruption costs > Higher staff incentive payments, due to our strong performance > Increase in project costs as a result of investment in significant initiatives
Navigation 4.27 0.16 0.3% > Price benefits in France and Germany > Change in fleet mix
Ownership 3.99 (0.18) (0.4%)
> Increase in depreciation due to new aircraft purchased > Increase in lease costs due to sale and leaseback programme > Partially offset by increase in interest receivable driven by higher cash balances and more favourable interest rates
Maintenance 3.31 (0.20) (0.5%) > Higher level of returns and additional aircraft recovery resilience > More than offset by up-gauging of fleet and the impact of discounting
Total headline CPS excluding fuel 43.00 (1.57) (3.8%)
Fuel 12.45 0.52 > Increases in the market price of fuel > Offset by the operation of easyJet’s fuel hedging policy and aircraft gauge
Total headline CPS 55.45 (1.05) (2.0%)
* Favourable/(adverse)
Revenue
£ per seat FY 2018 FY 2017 Change*
Passenger revenue 49.23 46.85 5.1%
Ancillary revenue 12.71 11.38 11.7%
Total revenue 61.94 58.23 6.4%
46
* Favourable/(adverse) – Passenger revenue includes net ticket and admin fee, all other revenue is included in ancillary revenue
Total reported FY 2018 FY 2017 Change*
Passenger revenue 4,688 4,061 15.4%
Ancillary revenue 1,210 986 22.7%
Total revenue 5,898 5,047 16.8%
Increasing proportion of A320 aircraft FY 2018 FY 2017 Change
A319 (operating lease) 53 54 (1)
A319 (owned / finance lease) 79 89 (10)
A319 Total 132 143 (11)
A320 (operating lease) 37 18 19
A320 (owned / finance lease) 144 118 26
A320 Total 181 136 45
A321 Total (owned) 2 - 2
Total fleet 315 279 36
Operating lease 29% 26% 3ppt
Number unencumbered 220 202 18
Percentage of A320s in fleet 57% 49% 8ppt
Average seats per aircraft 172 169 2%
47
Currency impact Revenue Costs
FY 2018 FY 2017 FY 2018 FY 2017
Sterling 45% 46% 29% 30%
Euro 44% 41% 39% 37%
US dollar 1% 1% 26% 26%
Other (principally Swiss franc) 10% 12% 6% 7%
Average effective Euro rate for revenue for FY 2018 was €1.14 (FY 2017: €1.18)
Average effective Euro rate for costs for FY 2018 was €1.13 (FY 2017: €1.15)
48
ROCE calculation – including 7x lease adjustment
Reported £m FY 2018 FY 2017
Earnings before interest and tax – reported 460 404
Interest element of operating lease payments 54 37
Earnings before interest and tax - adjusted 514 441
Tax 19% 19%
Normalised operating profit after tax (NOPAT) 416 357
Average shareholders’ equity – reported 3,031 2,748
Average net cash – reported (377) (285)
Opening capitalised leases 770 637
Closing capitalised leases 1,134 770
Average capitalised leases 952 704
Average capital employed 3,606 3,167
Return on capital employed – 7x basis 11.5% 11.3%
49
Headline ROCE calculation – including 7x lease adjustment
Reported £m FY 2018 FY 2017
Headline earnings before interest and tax – reported 592 428
Interest element of operating lease payments 51 37
Headline earnings before interest and tax - adjusted 643 465
Tax 19% 19%
Normalised headline operating profit after tax (NOPAT) 521 376
Average shareholders’ equity – reported 3,031 2,748
Average net cash – reported (377) (285)
Opening capitalised leases 770 637
Closing capitalised leases 1,134 770
Average capitalised leases 952 704
Average capital employed 3,606 3,167
Return on capital employed – 7x basis 14.4% 11.9%
50