easyjet plc Year to 30 September 2011 Pre-close statement presentation

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EZYRIDER\Presentations\20110901 - Mgmt Strategy Presentation\Optimise returns MAIN - 190811 v 42.pptx

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easyJet plc

Year to 30 September 2011

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EZYRIDER\Presentations\20110901 - Mgmt Strategy Presentation\Optimise returns MAIN - 07092011 v11.pptx

Driving performance



Re-build operational robustness



Complete and focused management team



Revenue; yield and ancillaries



Brand deals



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Strong operational performance

No independent data for OTP available for Ryanair since May

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30% 40% 50% 60% 70% 80% 90% J a n 2 0 1 0 Feb 2 0 1 0 Mar 2 0 1 0 A p r 2 0 1 0 May 2 0 1 0 J u n 2 0 1 0 J u l 2 0 1 0 A u g 2 0 1 0 S e p 2 0 1 0 Oc t 2 0 1 0 N o v 2 0 1 0 D e c 2 0 1 0 J a n 2 0 1 1 Feb 2 0 1 1 Mar 2 0 1 1 A p r 2 0 1 1 May 2 0 1 1 J u n 2 0 1 1 J u l 2 0 1 1 A u g 2 0 1 1 On Time Performance LGW Network

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4 Current trading – better than expected

Guidance for year to 30 September 2011

4 22nd July 2011 Q3 IMS

22nd Sept 2011

Revenue per seat

FY

+2% to +3%

+3%

H2

+4% to +5%

+6%

FY Underlying cost per seat

ex fuel (constant currency)

-1% to -2%

Pre-tax profit

£200m to £230m

£240m to £250m

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5 Hedging update

Percentage of anticipated requirement

hedged

Fuel

requirement

US Dollar

requirement

Euro

surplus

sale

Full year ending 30 September 2012

73%

69%

71%

Rate

$956MT

$1.59

€1.13

Full year ending 30 September 2013

27%

32%

34%

Rate

$1006/MT

$1.62

€1.14



At current fuel and exchange rates* it is anticipated that easyJet’s 2012 fuel bill will increase

by around £220 million

As at noon 21.09.11 Jet CIF $1,009 per metric tonne US $ to £ sterling 1.57 euro to £ sterling 1.15

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6 Forward bookings and costs

83.7

52.6

24.9

84.8

53.2

24.9

September October November

2011 2010

% seats sold *

As at 19.09.11



Third of F’12 seats now booked and total revenue per seat continues to show improvement

versus the prior years albeit at a lower rate of growth that the strong fourth quarter of F’11



Costs headwinds in F’12 from ETS and regulated airports in Spain, Italy and the UK

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Agenda

1. Current trading

2. Strategic context

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easyJet competitive advantage

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8 

Leading short-haul network in Europe

 Leading presence on Top 100 routes

 Strong positions in key markets

 Good range of leisure and business destinations



Low cost and efficient

 Scale and cost advantage compared to carriers flying to similar airports

 High asset utilisation (average of 11 hours a day)

 Consistently industry leading load factors



Financial and balance sheet strength

** Source: Deutsche Bank

44 ₄₂ 12 41 20 15 ₁₃ 11 10 5 1 30 2 20 0 5 10 15 20 25 30 35 40 45 50 easy Jet BA / Ib eria Rya nair Lufth ansa Gro up Air Fran ce K LM Alit alia Air Ber lin-N IKI _SAS Nor weg ian Vuel ing Airl ines 0 2 4 6 8 10 12 Other Marketing Ownership Maintenance Airport & ATC Fuel

Crew

Cost per ask * * easyJet has a significant cost advantage compared to carriers flying to similar airports

Excellent market positions and highly

attractive business model

_{Non primary airports}

Number of market pairs operated between two primary airports 4  2 _ 6 1 0  4  1 1 ₂

Presence in top 100 market pairs *

* Source: OAG 12 months to Sep10, OAG market definitions Primary airport = airport over 10 mppa or largest airport in market

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C:\Documents and Settings\dasroh.FIRMWIDE\Desktop\UBS 02.pptx

DRAFT FOR DISCUSSION PURPOSES ONLY

STRICTLY PRIVATE AND CONFIDENTIAL

easyJet fleet dynamics

Young fleet intrinsic to achieving high asset efficiency

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 Operating a young fleet is an intrinsic part of our business model

 Maximises aircraft availability and hence utilisation

 Minimises operating costs, especially maintenance

 Specification of new aircraft improves over time and hence reliability

0

5

10

15

20

25 1,8

1,2

1,4

1,6

0,8

0,4

0,6

Age of Aircraft (years)

2,0

1,0

Cost per Flight Hour

Indexed

During first five years warranty terms reduce costs

After 12-15 years work is required to contain structural fatigue

Engine on-wing time at mature levels

Engine life-limited parts may reach their replacement lives

5 to 12 years,

maintenance costs are fairly constant

Risk of maintenance costs rising due to increased unscheduled maintenance events

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Background to capacity plan

July 2009:



Board incl. SHI agree a medium growth rate

November 2010:



Incoming CEO / CFO carry out rigorous independent strategic review:

1. Switch to focus on ROCE as the key metric

2. Reconfirm medium growth rate

3. Flexibility in capacity and fleet is critical

May 2011:



Board announced it was utilising flexibility to take a cautious approach to

capacity and in light of high cost of jet fuel and uncertain consumer

demand will cap the fleet at 204 aircraft for Winter 11/12 and 12/13

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High degree of fleet flexibility

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Required deliveries

FY11 H2 FY12 H1 FY12 H2 FY13 H1 FY13 H2 FY14 H1 FY14 H2 FY15 H1 FY15 H2

Min Fleet 16 3 17 5 2 1 3 1 3

Market Growth 16 3 17 5 5 3 6 7 9

Max Fleet 16 10 10 6 6 8 11 9 10

Fleet count if 15 aircraft had not been

announced in Jan 2011 214 217 221 227 241 251 259 206 200 200 ₁₉₇ ₁₉₇ 204 204 213 204 216 215 219 218 220 180 190 200 210 220 230 240 250 260 270

FY11 H2 FY12 H1 FY12 H2 FY13 H1 FY13 H2 FY14 H1 FY14 H2 FY15 H1 FY15 H2

Fle et Cou n t Max fleet Min fleet

Fleet requirement for market growth of 3%

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Framework for managing route performance

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CPBH

1. CPBH or Contribution Per Block Hour expresses total contribution in terms of aircraft operating time, using the industry standard metric, namely "block hour". For a given level of capital employed, we derive the direct contribution per block hour required to cover overhead and achieve a 12% ROCE

2. Analysis based on actual performance of the FY2011 route network up to July 2011(10 months) plus outlook for the remainder of FY2011 Source: easyJet management plan

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Managing route performance

Evolution of ROCE by route evolution (2009 routes)

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10%

Routes

 Track record of improving performance over time

FY2011 FY2010

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DRAFT FOR DISCUSSION PURPOSES ONLY

STRICTLY PRIVATE AND CONFIDENTIAL

14 easyJet finance strategy

 Ensure robust capital structure

 Return excess capital to shareholders

 Maintain sufficient level of liquidity to manage through the cycle and industry shocks

 Targeting consistent and continuous dividend payout Return Targets Capital Structure And Liquidity Dividend Policy

 Earn returns in excess of cost of capital through the cycle

 Invest in growth opportunities where returns are attractive

Aircraft Ownership

Hedging

 Maintain flexibility around fleet deployment and size

 Insulate short term operating performance against adverse movements in fuel price and exchange rates

Objectives

 Maximum gearing of 50% *

 Cap of GBP 10m adjusted net debt per aircraft

 Minimum GBP 4m cash per aircraft

 5x cover, subject to meeting gearing and liquidity targets

 Annual payment based on full year PAT; introduced for FY 2011, payable 2012

 Consider returns over 5x cover to reduce excess capital

 Improve PBT per seat to GBP5

 Post tax ROCE of 12% through the cycle

 Target of 70% owned aircraft, 30% leased aircraft

 65%-85% of the next 12 months’ anticipated requirements

 45%-65% of the following 12 months’ anticipated requirements

Measures

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*Gearing defined as (debt + 7 x annual lease payments – cash) divided by (shareholders funds + debt +7 x annual lease payments – cash)

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DRAFT FOR DISCUSSION PURPOSES ONLY

STRICTLY PRIVATE AND CONFIDENTIAL

Capital allocation

Ordinary dividend:



5x cover or c. £40m or c. 9 pence per share based on current guidance

One-off capital return:



Board expects in November 2011 recommend a one-off capital return, of £150

million, likely to be in the form of a special dividend payable early calendar 2012

Capital expenditure:

1. Maintain fleet size (replacement of leased aircraft and engine overhaul)

2. New network opportunities; required to deliver on-target returns within a tight and

defined timescale

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DRAFT FOR DISCUSSION PURPOSES ONLY

STRICTLY PRIVATE AND CONFIDENTIAL

Capital cash flow including financing and overhauls

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Total Aircraft Capex: 786m Total Aircraft Capex: 627m Total Aircraft Capex: 401m

Source: easyJet management plan

1) Including $118m of proceeds from disposals and $101 additional cumulative capex

2) Capex is shown pre-financing – current plan is to maintain 70%/30% owned/leased mix

3) Shop visits are assumed at an engine life of seven years

$318m $431m

$590m

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