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introduction Johan Lundgren - CEO
3
> 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
3
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%)
5
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%
6
FY 2019 FY 2018 Change*
£ 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 profit before tax 427 578 (151)
Headline ROCE** 11.4% 14.6% (3.2)ppt
Headline diluted EPS (pence) 87.8p 117.4p (29.6)p
Dividend per share 43.9p 58.6p (14.7)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
Total profit before tax 430 445 (15)
Financial performance
7 7 *Favourable/(adverse)
** FY19 upon adoption of IFRS16, FY18 including 7 x lease adjustment & restated for Swiss pension liability
8
(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%)
Reported RPS = (1.8%)
(0.5%) +0.1%
(0.4%)
(2.4%)
+0.5%
Revenue performance Revenue per seat bridge
8 *Favourable/(adverse)
costs Headline cost per seat bridge
(£0.22)
(£0.36)
£0.52
£0.39
£0.11
(£0.66)
FX FY 2019 headline cost
per seat at CC
Maintenance
£56.08
Crew Ownership costs
£56.74
FY 2019 headline cost
per seat at CC before
fuel variance
£55.55
Airports & Ground
Handling
FY 2018 headline cost
per seat
£55.87
Overheads and Other
Income
Navigation
(£0.21)
£0.32
FY 2019 headline cost
per seat
Impact from IFRS adoption
(£0.23)
(£0.53)
Fuel Disruption
9
Headline CPS ex
fuel @ CC = 0.8%
Reported CPS = (1.5%)
*Favourable/(adverse)
Movement before IFRS impact
Impact of fuel & currency
*Favourable /(adverse) 10
FY 2019 fuel impact FY 2019 FY 2018 Change*
Fuel $ per metric tonne
Market price 652 664 12
Effective price 604 590 (14)
US dollar rate
Market price 1.27 1.34 (7) cents
Effective price 1.32 1.36 (4) cents
Difference 0.05 0.02
Actual cost of fuel £ per metric tonne 458 434 (24)
FY 2019 currency impact on headline PBT* EUR CHF USD Other Total
£m
Revenue 37 16 3 (1) 55
Fuel - - (54) - (54)
Headline costs excluding fuel - (11) (3) (1) (15)
Total 37 5 (54) (2) (14)
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
CAPEX Repayment of capital
element of leases under
IFRS 16***
Other Operating profit
Cash & MMDs post div & tax
paid
Cash & MMDs at 30
September 2019
1,576
Cash & MMDs at 1 October
2018 *
Other operating
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)
11 * 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 30 September 2019
30 September 2018 (restated)
Change
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)/cash (326) 396 (722)
Net assets 2,985 3,233 (248)
£m
£m
Liquidity is supported by a revolving $500 million credit facility and a business interruption insurance policy
12 ** 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
352 353
358 361
330
309
304
354
365
383
280
300
320
340
360
380
400
1 2 3 4 5
Nu
mb
er
of
air
cra
ft
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
GrowthReplacement & Owned MaintenanceNew IFRS StdsOther
Gross capital cashflows
14
£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
15
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
17
Fuel and foreign exchange hedging
Outlook
18
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
easyJet holidays – At least breakeven 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 18
Ceo update Johan Lundgren
Net zero carbon
easyJet holidays
Investing in operational resilience
Data driven
FIRST MOVER - The next phase
EU airline industry First mover
20
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
Se
ats
flo
wn
(m
ils)
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 R
eve
nu
e p
er
sea
t
FY19 FY14 FY13 FY16 FY15 FY12 FY18 FY17
Ca
pa
city
(sea
ts)
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
Ave
rag
e d
aily
yie
ld
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*
23
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 other 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 heatproductionIndustrial
Residential
Commercial and publicservicesPassenger roadvehiclesRoad freight vehicles
Aviation
Shipping
Other transport
Rail
Other
• Source(s): IEA, Roland Berger Analysis
CO
2 p
er
RP
K
The world’s first major airline to operate net-zero carbon flights
> First major international airline to offset all carbon emissions on 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(s): IEA, Roland Berger Analysis
De-carbonising aviation
2020 2035 2050
Conventional Carbon Offsets
Forestry, energy efficiency and clean energy generation
projects
Advanced Carbon Offsets
Improved SAFs and Direct Air Carbon Capture
(DACCS) commercially available at scale
Hybrid Electric Aircraft
~200 seat narrowbody with up to 50% CO2
reduction
Full Electric Aircraft
~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
43
* 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)
Total profit after tax 361 (12) 349 358 (9)
Total profit before tax 442 (12) 430 445 (15)
Total tax charge (81) 0 (81) (87) 6
Total 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 (restated) Change*
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 seat excluding
fuel £
Variance at constant currency*
£
Variance at constant currency*
%
Weighted variance at constant currency*
%
Pre-IFRS variance at constant currency
£ Drivers
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 2018
Description £ m £ m
Sale and leaseback 2 (19)
The sale and leaseback of 10 A319 aircraft in FY’19 resulted in a gain on disposal of 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 of 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 non-headline items 3 (133)
48
Currency impact Revenue Costs
FY 2019 FY 2018 FY 2019 FY 2018
Sterling 43% 45% 30% 29%
Euro 46% 44% 38% 39%
US dollar 1% 1% 26% 26%
Other (principally Swiss franc) 10% 10% 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 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 IFRS 16 pre tax profit impact on FY’19 (7)
Total 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 Total 200 181 19
A321 (owned/Total) 6 2 4
Total fleet 331 315 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
2019 Pre-IFRS adoption
2019 as
reported
2018 (restated)
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.
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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
of £182m, maintenance expense of £85m and Airports, Ground Handling and other costs of £6m.
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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.
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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 2019 2018 Change
Passengers 9,578,600 9,327,582 2.7%
Load Factor 94.3% 95.8% -1.5ppt
September 2019 2018 Change
Passengers 8,972,901 8,816,427 1.8%
Load Factor 91.4% 92.8% -1.4ppt
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