TIDMEZJ
RNS Number : 0279M
easyJet PLC
19 May 2022
19 May 2022
easyJet plc
Results for the six months ending 31 March 2022
easyJet faces summer 2022 with optimism - with customers
returning strongly to us whilst also driving a step-changed revenue
capability, we expect to deliver attractive continued
improvement
- Headline loss before tax of GBP545 million (Reported loss before tax of GBP557 million)
- Radical network optimisation: >1.5m seats reallocated to strongest markets
- Step-changed ancillary products delivering incremental revenue
- H2 operating CASK(7) ex fuel expected to be close to FY19 levels
- Higher fuel and USD exchange rates layering additional cost in H2
Commenting on the results, Johan Lundgren, easyJet Chief
Executive said:
"easyJet has reduced its losses year on year, at the better end
of guidance. The pent-up demand and removal of travel restrictions
provided for a strong and sustained recovery in trading which has
been further boosted as result of our actions. These include the
radical reallocation of aircraft which has seen more than 1.5m
seats moved to the best performing markets and the step-change in
our ancillary products delivering increased revenue - both of which
have contributed to our total yield increasing by 9% compared to
the same period in FY19. All of this is not only delivering now but
with more to come in the future as even more passengers take to the
skies.
"We have transformed the airline during the pandemic which has
enabled us to emerge with renewed strength, underpinned by a
product, network and service that customers really value.
"Since Easter we have been flying up to a quarter of a million
customers and 1600 flights every day and in the second half leisure
and domestic capacity will be above 2019 levels. It has been well
documented that the industry is experiencing some operational
issues so, as you would expect, we have been absolutely focused on
taking action to ensure we have strengthened our operational
resilience for this summer so we can deliver a great, reliable
operation to our customers.
"We expect to operate 90% of FY19 capacity in Q3 and we have
capacity on sale of around 97% of FY19 flying in Q4 with easyJet
holidays now on track to carry over 1.1 million customers this
financial year.
"And so, as we return to a more normal summer season, we are
ready to capture the increased levels of demand right across our
network. We are confident in our plans for summer which will see us
reaching near 2019 flying levels and look forward to competing with
our renewed strengths as a winner in the post pandemic recovery of
European aviation."
Overview
easyJet has continued to allocate aircraft to the markets where
we see demand at its strongest. In the second half of the year
leisure and domestic routes have fully recovered with capacity at
113% and 104% of FY19 levels respectively, whilst business and city
traffic continues to recover with demand currently below FY19
levels. Additionally, the steps we have taken to transform our
ancillary offering are delivering significant levels of incremental
revenue generation without cannibalising our ticket revenue.
The airline industry has recently been experiencing operational
pressures, which mainly impacted easyJet through early April.
easyJet has taken action to address these pressures, which
includes; proactively managing the schedule, reducing cancellations
through various measures such as, boosting recruitment, and
improving ID processing. Despite this, bookings continue to be
strong as we have seen demand, post the impact of the Omicron
variant, returning with the removal of travel restrictions. Booking
patterns have remained shorter than they were pre pandemic, however
in the last 10 weeks bookings have consistently been above the
levels in the same period of 2019. easyJet holidays is continuing
to build, as the UK's fastest growing holiday company and remains
on track to carry >1.1 million passengers in FY22 with over 70%
of the program sold.
Summer 22:
-- Forward bookings for the third quarter are 76% sold and 36% sold for the fourth quarter.
-- In the last 10 weeks, bookings have been 6% above the same period in 2019
-- Easter holidays saw load factors of 90%
-- Q4 Sold ticket yields are currently 15% above 2019 and load factors expected to be >90%
-- Capacity recovery:
o H2 Leisure capacity at 113% of FY19
o H2 Domestic capacity at 104% of FY19
-- Holidays >70% sold and on track to deliver medium term target of GBP100m+ PBT
Capacity:
-- Q3 Capacity expected to be c.90% of FY19
-- Q4 Capacity on sale is c.97% of FY19
Hedging
-- easyJet is currently c.71% hedged for fuel in H2 of FY22 at
c.US$619 per metric tonne, c.49% hedged for H1 FY23 at c.US$701 and
c.20% hedged for H2 FY23 at c.US$807. The spot price on 17 May 2022
was around US$1,225.
-- Carbon obligation for CY'22 100% covered at EUR19/MT
Financial Summary
-- Headline loss before tax of GBP545 million (H1 2021: GBP701 million loss)
o Total revenue increased by 524% to GBP1,498 million (H1 2021:
GBP240 million) predominantly due to the increase in capacity flown
and ancillary products continuing to deliver incremental
revenue.
o Group headline costs increased by 117% to GBP2,043 million (H1
2021: GBP941 million), primarily due to the increase in flown
capacity.
-- Reported loss before tax of GBP557 million (H1 2021: GBP645 million loss).
o Non-headline loss of GBP12 million (H1 2021: GBP56 million
gain). Non-headline items consist of losses from the sale and
leaseback of aircraft partially offset by restructuring provision
releases.
H1 2022 H1 2021 Change
favourable/(adverse)
---------------------------------------- -------- --------- --------------------------
Capacity(1) (millions of seats) 30.3 6.4 373.4%
Passengers(3) (millions) 23.4 4.1 470.7%
Load factor(2) (%) 77.3 63.7 13.6ppts
Average sector length (km) 1,131 1,261 (10.3%)
Total revenue (GBP million) 1,498 240 524.2%
Headline EBITDAR (GBP million) (208) (469) 55.7%
Headline loss before tax (GBP million) (545) (701) 22.3%
Reported loss before tax (GBP million) (557) (645) 13.6%
Airline revenue per seat (GBP) 47.61 36.93 28.9%
Airline revenue per seat at constant
currency(4) (GBP) 49.06 36.93 32.8%
Airline EBITDAR cost ex fuel per seat
(GBP) (42.45) (94.09) 54.9%
Airline EBITDAR cost ex fuel per seat
at constant currency(4) (GBP) (43.58) (94.09) 53.7%
Airline headline loss before tax per
seat (17.80) (108.07) 83.5%
Holidays contribution (5.5) (8.1) 32.1%
Headline EBITDAR Margin (14.0%) (195.8%) 181.8ppts
Headline ROCE (12.0%) (16.8%) 4.8ppts
---------------------------------------- -------- --------- --------------------------
For further details please contact easyJet plc:
Institutional investors and analysts:
Michael Barker Investor Relations +44 (0)7985 890 939
Media:
Anna Knowles Corporate Communications +44 (0)7985 873 313
Edward Simpkins Finsbury +44 (0)7947 740 551 / (0)207 251
3801
Dorothy Burwell Finsbury +44 (0)7733 294 930 / (0)207 251
3801
Conference call
There will be an analyst presentation at 09:00am GMT on 19 May
2022 at Nomura, One Angel Lane, London, EC4R 3AB.
Alternatively, a webcast of the presentation will be available
both live and for replay (please register on the following link):
https://stream.brrmedia.co.uk/broadcast/6274ee558eb4f178d1ef92ad
Alternatively dial in details are as follows: 0800 279 6877/+44
(0)330 165 4012
Revenue
Total revenue increased by 524.2% to GBP1,498 million (H1 2021:
GBP240 million) in line with capacity increasing to 30.3 million
seats (H1 2021: 6.4 million) because of pandemic-related travel
restrictions being more relaxed than they were in the same six
months last year.
Passenger revenue increased by 479.4% to GBP985 million (H1
2021: GBP170 million) as we flew increased levels of capacity
compared to the same period last year. Passenger RPS increased by
22.7% to GBP32.49 (H1 2021: GBP26.47) due to demand returning as
travel restrictions eased in the early part of H1 as customers
enjoyed the late summer season before a temporary pause in December
and January as a result of the Omicron variant. Trading
strengthened again in February and March as restrictions were
removed.
Group ancillary revenue increased by 632.9% to GBP513 million
(H1 2021: GBP70 million) as capacity increased. Airline ancillary
revenue per seat also increased by 44.6% to GBP15.12 (H1 2021:
GBP10.46) as we continue to see incremental benefits from the new
ancillary products which have been launched since H1 of FY21.
Costs
Group headline costs excluding fuel and FX gains increased by
94.2% to GBP1,684 million (H1 2021: GBP867 million), driven by an
increase in capacity flown as easyJet continues to ramp up
capacity.
easyJet recorded a GBP2 million gain from foreign exchange (H1
2021: GBP24 million gain), related to the impact of stronger
Sterling on our net foreign currency-denominated liabilities.
The cost per seat performance continues to be impacted by
volume. Airline headline cost per seat at constant currency
decreased by 55.0% to GBP66.81 (H1 2021: GBP148.59). Headline
Airline cost per seat excluding fuel at constant currency decreased
by 59.0% to GBP54.71 (H1 2021: GBP133.51).
Non-Headline Items
Non-headline items are those where, in management's opinion,
their separate reporting provides a better understanding to users
of the financial statements of easyJet's underlying trading
performance, and which are significant by virtue of their size
and/or nature. These costs are separately disclosed and further
detail can be found in the notes to the accounts. A Group
non-headline loss before tax of GBP12 million (H1 2021: GBP56
million gain) was recognised in the first half. The significant
items consisted of a GBP21 million loss as a result of the sale and
leaseback of 10 aircraft and an GBP8m release from restructuring
provisions.
Balance Sheet
During H1 easyJet repaid GBP300 million of commercial paper,
clearing the final balance under the CCFF scheme. easyJet has no
other debt maturities until the 2023 financial year. As at 31 March
2022 our net debt position was GBP0.6 billion (30 September 2021:
GBP0.9 billion) including cash and cash equivalents and money
market deposits of c.GBP3.5 billion.
Strategy Update
easyJet has prioritised six strategic initiatives that will
continue to build on our structural advantages in the European
aviation market and enable us to lead the recovery as travel
returns.
-- Network strategy
-- Customer excellence
-- Product portfolio evolution
-- easyJet holidays
-- Cost focus
-- Sustainability
These initiatives, underpinned by operational and digital safety
and a continued focus on our people, should result in strong
shareholder returns being delivered.
Network Strategy
easyJet has a strong network of leading number one and number
two positions in primary airports, which has proven to be amongst
the highest yielding in the market. This enables us to be efficient
with our network choices, with an emphasis on maximising
returns.
easyJet continues to optimise its network to ensure capacity is
deployed in the markets where we see the strongest demand. This has
been done this summer through our network optimisation, where over
1.5 million seats have been reallocated across the network. This
enables us to serve our customers in the markets where demand is
the strongest.
We will seek to strengthen our position in key markets as the
competitive landscape evolves. This has been demonstrated at London
Gatwick where we are increasing our market share after reallocating
aircraft to this high yielding base along with the addition of new
slots. As well as growing in Gatwick, an extra five aircraft worth
of slots have been added into the Greek Islands, where easyJet will
now be the largest carrier this summer.
Our focused network strategy can be summarised as follows:
1. Lead in our Core Markets
easyJet prioritises slot-constrained airports as these are where
customers want to fly to and from. In our core markets, we are able
to achieve cost leadership and preserve scale. We provide a
balanced network portfolio across domestic, city and leisure
destinations. Our scale enables us to provide market leading
networks and schedules. We are maintaining our focus on country
leadership in the UK, France and Switzerland and our city focus in
the Netherlands, Italy and Germany.
2. Accelerate investment in Destination Leaders
We will build on our existing leading positions in Western
Europe's top leisure destinations to provide network breadth and
flexibility. This will also unlock cost benefits, enabling us to
manage seasonality and support the growth of easyJet holidays. It
also ensures that easyJet remains top of mind for customers and is
seen as the 'local airline' for governments and hoteliers.
3. Build our network in Focus Cities
easyJet is building a network of key cities, broadening our
presence across Europe. This is a low-risk way of serving large
origin markets. We will base assets in Focus Cities where it makes
sense from a cost perspective.
Customer Excellence
Despite the rise in living costs, consumer research suggests
there is still strong appetite to travel due to pent up demand and
people topping up savings during the pandemic. 1 in 2 respondents
in the UK say limited opportunities to travel during the pandemic
has made their holidays more important to them than before (ABTA
travel in 2022).
The continuous removal of restrictions has benefitted business
travel, specifically SMEs who were able to set the pace of recovery
while large corporates migrated to hybrid working. We have begun to
see the return of business travellers and easyJet is well placed to
provide business segments with the network, schedule, product &
value to enable growth.
We launched our nextGen brand campaign, highlighting
environmental and inclusivity initiatives as well as our continued
focus on delivering great value European travel.
easyJet aims to deliver a seamless and digitally enabled
customer journey at every stage:
-- Prior to travel: our 'direct is best' strategy is led by our
digital channels, with an app/mobile-first mindset which makes
travel easy for our customers. Confirmation and check-in summary
pages now dynamically display the cabin bag allowance of a specific
booking, enabling our customers to more easily understand their
specific cabin bag allowance.
-- In airport: moving customers from kerb to aircraft without
the need for human interaction. This involves improving boarding in
order to improve CSAT(8) and reduce queuing, which our cabin bag
policy continues to help with. With the easing of travel
restrictions, we're returning towards pre-pandemic policies, e.g.
removing face mask requirement on-board.
-- In flight: our warm welcome and personal service to get you
to your destination on time. We are committed to delivering On-Time
Performance (OTP) - on time, every time. This is done by managing
suppliers, empowering crew, ATC planning and carrying out base
operating reviews. We are also continuing to improve our inflight
offering with the launch of inflight retail.
-- Support: we aim to give customers the digital tools to easily
self-serve when things do not go to plan, or to engage after their
flight. We are continuing to look after our customers with our
Self-Service Disruption Portal (SSDP) significantly reducing
customer request time when using SSDM rather than the contact
centre.
Our customer satisfaction has returned to pre-pandemic levels at
77%.
Despite the significant ramp up in activity in H1 2022, on time
performance has remained broadly in line with 2019- with
performance in the prior year driven by lower levels of capacity.
This reflects the strides we are taking towards leaving 'on time,
every time'. This is crucially important for our operational
efficiency, as well as customer satisfaction.
OTP % arrivals within Q1 Q2 H1
15 minutes(5)
----------------------- ---- ---- ----
2022 Network 87% 86% 86%
2021 Network 94% 91% 94%
----------------------- ---- ---- ----
Product Portfolio Evolution
easyJet recognises that the continued evolution of our product
portfolio represents a significant opportunity to increase revenue
per seat and margins in the coming years. We are continuing to see
a strong performance from the products which have been launched
recently, including cabin bags and our new leisure fare
(Essentials) bundle. In the first half of 2022 these have added an
incremental GBP3.14 to ancillary yields compared to the same period
last year.
The Directors believe that the continued evolution of the
Group's product portfolio provides the opportunity to build on
spend per customer, delivering enhanced sustainable returns.
At the end of the first half, inflight retail, our new retail
brand & proposition has been launched. This has resulted in
direct sourcing and contracting for our on-board retail offering
and is tailoring the product offering to our customers. We have
partnered with dnata to improve our customer proposition, as we see
an opportunity to grow conversion, spend per customer and profit
per seat.
easyJet holidays
easyJet holidays continues its rapid growth to becoming a major
player within the sector, having seen over 500% increase in Summer
2022 bookings versus the previous 2019 model, which now confirms
easyJet holidays as the UK's fastest growing holiday company.
Our holidays business is well on track to deliver over 1.1m
passengers in 2022 and has already sold over 70% of that planned
volume, at significantly higher margins versus 2019 and lower
acquisition costs compared to our competitors, having 88% of the
visitors to our website coming through unpaid channels, the
majority of which are from customers visiting easyjet.com.
As a digital first business we are proud to have been recognised
for our award-winning website and technology and see significant
opportunity to fast track our growth to GBP100m PBT in the medium
term. We offer the most competitively priced holidays in the
market, being cheaper c.75% of the time on a like for like basis
versus our competitors. This coupled with our direct hotel
contracting and low fixed cost base provides easyJet holidays with
a strong business model to accelerate our growth and deliver
sustainable returns.
Cost focus
easyJet has a cost advantage over its major competitors on our
primary airport network. Actions have been taken to deliver cost
savings, and as a result of these actions, easyJet expects that its
operating CASK(7) excluding fuel in the second half of FY22 will be
close to H2 2019 levels. This demonstrates the work that has been
done and is based on ASKs(9) increasing c. 2% on H2 2019.
Examples of these cost actions are;
-- Self Service disruption management, where we have reduced the
need for manual processing by 69% when dealing with customer
refunds and vouchers (since go-live Aug 2019). This is improving
our customer satisfaction, but also delivers cost savings as we are
having less calls to our contact centres.
-- Crew agreements on seasonal contracts have been achieved as a
result of constructive relationships with our trade union partners
and our people. Improvements have also been made to
productivity.
-- Line maintenance insourced at LGW, BER, GLA, EDI, BRS. This
action is delivering cost savings but also ensures the best quality
as we carry out the line maintenance in house.
Sustainability
Today easyJet has announced our interim science-based target
following our commitment to the initiative. This will see us reduce
our carbon intensive emissions by 35% by FY35 using FY20 as a
baseline.
We plan to achieve this ambitious target through a combination
of four business actions:
-- Fleet renewal: All of the aircraft deliveries that we receive
between FY22 and FY28 will be Aircraft NEO Aircraft. These NEO
aircraft offer 15-25% more fuel efficiency and provide a 50%
reduction in noise, compared to the aircraft they will replace.
This is in addition to upgauging our seat capacity and, offering
both revenue and cost benefits.
-- Operational improvements and efficiencies: We will continue
to operate our aircraft as efficiently as possible and are always
looking for efficiency improvements. This includes adjusting
standard operating procedures, which helps to reduce fuel usage and
therefore carbon emissions, for example single-engine taxiing on
arrival and departure.
-- Airspace modernisation: In the immediate term, airspace
modernisation is the most achievable source of significant carbon
emission reductions, as more direct flight paths lead to shorter
flying times. We are working with stakeholders and public
authorities to promote the modernisation of airspace, including
projects such as the Single European Sky which is predicted to
deliver 10% CO2 emissions savings on easyJet's network.
-- Sustainable Aviation Fuel: We will use SAF at scale in the
interim in order to achieve material lifecycle carbon emissions
reductions in comparison to kerosene.
easyJet plans to publish its net-zero pathway, where we will set
out our carbon emission reduction goals.
easyJet's sustainability strategy has evolved to reflect our
ambition to pioneer positive change for our planet, communities
& people while getting one step closer to net-zero every day.
It is focussed on three pillars, and underpinned by Governance.
-- Reducing our impact today for a better tomorrow : We achieved
IATA Environmental Assessment programme (IEnvA) stage 1
accreditation, for an ISO14001-compliant Environmental Management
System (EMS). This makes us the only Low-Cost Carrier operating in
the UK with an IEnvA Stage 1 verified EMS and the first non-IATA
member to participate in the IEnvA accreditation process.
-- Pioneering future travel : Our partnerships with various
industry leaders work towards the acceleration of zero carbon
emission technologies and the required infrastructures for these to
be present in the aviation industry. Our partnerships include,
amongst others, GKN Aerospace and Cranfield Aerospace Solutions
where we are supporting projects focusing on hydrogen combustion
and fuel cell technology, and the development of a hydrogen fuel
cell propulsion system. We are championing zero emission flying
through the development of a zero emissions aircraft to decarbonise
aviation.
-- Driving positive change in society : We are working to
positively impact our people, customers, and communities with the
aim of maximising the positive social and economic benefits of
travel and tourism. This has included launching an onboard appeal
in support of our charity partner UNICEF to help children and their
families affected by the conflict in Ukraine.
Our sustainability strategy is underpinned by strong
sustainability governance and monitoring at board level to make
sure the strategy is delivered. In December 2021, we received a B
rating from CDP(6) for 2021, an improvement on the previous year.
We have also published an ESG supplement on our website, to be read
alongside our FY21 Annual Report, giving further data and
information on ESG topics such as human capital & labour
management; safety, quality & governance; business ethics; data
privacy & security, and environmental management.
Fleet
easyJet's total fleet as at 31 March 2022 comprised 322 aircraft
(30 September 2021: 308 aircraft with 12 held on zero rent basis)
with the increase driven principally by the cessation of free
rental period aircraft, delivery of 5 new A320 family aircraft, and
lease additions to the fleet. The average gauge of the fleet is now
179 seats per aircraft, compared to 178 seats at 30 September 2021.
The average age of the fleet increased slightly to 8.9 years (30
September 2021: 8.6 years).
Fleet as at 31 March 2022:
Changes
% of since Future Purchase Purchase
Owned Leased Total fleet Sep-21 deliveries options rights
A319 35 64 99 31% 2 - - -
A320 105 62 167 51% 7 - - -
A320 neo 34 7 41 13% 4 100(1) 6(1) 53(1)
A321 neo 4 11 15 5% 1 15(1) - -
------------ ------ ------- ------ ------- -------- ------------ --------- ---------
178 144 322 14 115 6 53
Percentage
of total
fleet 55% 45%
1) easyJet retains the option to alter the aircraft type of
future deliveries, subject to providing sufficient notification to
the OEM
At 31 March 2022, easyJet was storing two operating leased
aircraft on behalf of their respective lessors. These are held at
zero rent unless flown and are excluded from the fleet plan.
Additionally, easyJet is storing 2 further operating leased
aircraft, which have been acquired for future operations. These are
held at zero rent and are excluded from the fleet plan.
Our flexible fleet plan allows us to expand or contract the size
of the fleet depending upon the demand outlook.
Number of aircraft FY22 FY23 FY24 FY25
--------------------- ----- ----- ----- ----
Current contractual
minimum - 323 306 276
Base plan 324 - - -
Current contractual
maximum - 332 327 337
---------------------- ----- ----- ----- ----
Expected deliveries 9 6 18 26
---------------------- ----- ----- ----- ----
Capital Expenditure
Over the next three years easyJet's gross capital expenditure is
expected to be as follows:
FY22 FY23 FY24 FY25
------------------------------- ------ -------- -------- ---------
Gross capital expenditure (GBP c.800 c.1,000 c.1,300 c. 1,800
million)
------------------------------- ------ -------- -------- ---------
Capex in FY22 is comprised of new Airbus fleet delivery payments
and maintenance related expenditure as well as lease payments. Our
capex projections assume nine aircraft deliveries in FY22, six
deliveries in FY23, 18 deliveries in FY24 and 26 deliveries in
FY25.
Our People
easyJet continues to have a strong reputation as an employer of
choice. Our people are a key source of differentiation compared to
our competition, this helps deliver excellent customer experience
and loyalty.
Our Glassdoor rating of employee satisfaction is 4.3 (out of
5.0), this is the highest within the travel and hospitality sector,
illustrating our market-leading position in the labour market.
We have constructively worked in partnership with our employee
representative bodies across Europe in order to support the
operation. We recognise that the wider economic environment of
rising inflation has been challenging for a number of our people
and continue to work with our Trade Union partners in order to
support our crew whilst maintaining control of our cost base.
In FY22 some of the key deliverables include:
-- Learning and development: We have introduced a new People
Management development programme to help develop our Manager and
leader capabilities throughout all First Line Leaders, while
continuing to develop our approach to early careers including the
re-launch of our engineering apprenticeships. In addition, we have
also utilised our Apprenticeship levy to support a range of head
office roles.
-- Health and Wellbeing : We have implemented a new UK
occupational health provision and mobile enabled support for all
employees while also delivering comprehensive mental health
awareness training for all employees and managers
-- Diversity and inclusion : Implementation of a new Equal Opportunities and Inclusion Policy.
EU Ownership
As previously announced, easyJet has suspended voting rights in
respect of certain shares ('Affected Shares') held by Relevant
Persons in accordance with easyJet's articles of association (the
'Articles') so that a majority of the voting rights in easyJet are
held by EU Persons. As at 18 May 2022, a majority of the voting
rights in easyJet are held by EU persons.
Note: 'EU persons' refers to nationals of EU member states plus
Switzerland, Norway, Iceland, Liechtenstein, but excludes the UK.
'Relevant Persons' has the meaning given to it in the Articles. In
general terms, 'Relevant Persons' refers to non-EU nationals.
Further information is available on the Company's website at
https://corporate.easyjet.com/investors/shareholder-services/eu-share-ownership
.
Outlook
Q3 Capacity expected to be c.90% of FY19 with load factors
expected to be >86%.
Q4 Capacity currently on sale is c.97% of FY19 with load factors
expected to be >90%.
easyJet is currently c.71% hedged for fuel in H2 of FY22 at
c.US$619 per metric tonne, c.49% hedged for H1 FY23 at c.US$701 and
c.20% hedged for H2 FY23 at c.US$807. The spot price on 17 May 2022
was around US$1,225.
The targets easyJet has set are: Grow to pre pandemic capacity
by 2023; mid teen EBITDAR margins with low to mid teen ROCE in the
medium term; and having a clear roadmap for easyJet holidays to
contribute GBP100 million plus profit before tax to the Group.
At this stage, given the continued level of short-term
uncertainty, it would not be appropriate to provide any further
financial guidance for the 2022 financial year. Customers are
booking closer to departure and visibility remains limited.
Footnotes
(1) Capacity based on actual number of seats flown.
(2) Represents the number of passengers as a proportion of the
number of seats available for passengers. No weighting of the load
factor is carried out to recognise the effect of varying flight (or
"sector") lengths.
(3) Represents the number of earned seats flown. Earned seats
include seats which are flown whether or not the passenger turns
up, as easyJet is a no-refund airline and once a flight has
departed, a no-show customer is generally not entitled to change
flights or seek a refund. Earned seats also include seats provided
for promotional purposes and to staff for business travel.
(4) Constant currency is calculated by comparing 2022 financial
year performance translated at the 2021 financial year effective
exchange rate to the 2021 financial year reported performance,
excluding foreign exchange gains and losses on balance sheet
revaluations.
(5) On-time performance is defined as the percentage of flights
which arrive within 15 minutes of the scheduled arrival time and is
measured by internal easyJet systems
(6) CDP - Carbon Disclosure Project is an independent,
non-profit, global environmental reporting organisation.
(7) Operating CASK ex fuel is our headline cost ex ownership,
fuel, and balance sheet revaluations @ constant currency per
available seat kilometre
(8) CSAT is a metric of customer satisfaction based on easyJet
surveys
(9) Available seat kilometres; taken by multiplying available
seats on any given aircraft by the number of kilometres flown on a
given fli
OUR FINANCIAL RESULTS
Headline loss before tax decreased from GBP701 million for the
six months ended 31 March 2021 to GBP545 million for the six months
ended 31 March 2022. This was mainly driven by the reduction in
Covid-19 related travel restrictions across Europe which has
increased customer confidence to travel again; easyJet flew 23.4
million passengers (H1 2021: 4.1 million), up 471% on the prior
period. Similarly, total loss after tax decreased from GBP549
million for the six months ended 31 March 2021 to GBP431 million
for the six months ended 31 March 2022.
Amounts presented at constant currency throughout this section
are an alternative performance measure and are not determined in
accordance with International Financial Reporting Standards, but
provide relevant and comparative reporting for readers of these
financial statements.
FINANCIAL OVERVIEW
GBP million (Reported) -- Group H1 2022 H1 2021
=========================================== ======== =========
Group revenue 1,498 240
Headline costs excluding fuel, balance
sheet FX and ownership (1,344) (612)
Fuel (362) (97)
Headline EBITDAR (208) (469)
Balance sheet foreign exchange gain 2 24
Other ownership cost (339) (256)
============================================ ======== =========
Group headline loss before tax (545) (701)
============================================ ======== =========
Being:
Airline headline loss before tax (540) (693)
Holidays headline loss before tax (5) (8)
============================================ -------- ---------
Headline tax credit 123 126
============================================ ======== =========
Group headline loss after tax (422) (575)
============================================ ======== =========
Non-headline items (12) 56
Non-headline tax credit/(charge) 3 (30)
============================================ ======== =========
Group total loss after tax (431) (549)
============================================ ======== =========
GBP per seat -- Airline only (1) H1 2022 H1 2021
=========================================== ======== =========
Airline revenue 47.61 36.93
Headline costs excluding fuel, balance
sheet FX and ownership (42.45) (94.09)
Fuel (11.94) (15.08)
Headline EBITDAR (6.78) (72.24)
Balance sheet foreign exchange gain 0.09 3.59
Other ownership cost (11.11) (39.42)
============================================ ======== =========
Airline headline loss before tax (17.80) (108.07)
============================================ ======== =========
Headline tax credit 3.94 19.68
============================================ ======== =========
Airline headline loss after tax (13.86) (88.39)
============================================ ======== =========
Non-headline items (0.40) 8.77
Non-headline tax credit/(charge) 0.10 (4.61)
============================================ ======== =========
Airline total loss after tax (14.16) (84.23)
============================================ ======== =========
(1) All per seat metrics are for the Airline business
only, as the inclusion of hotel-related revenue and costs
from the holidays business will distort the RPS and CPS
metrics as these are not directly correlated to the seats
flown by the Airline. Our easyJet holidays business forms
a separate operating segment to the Airline, but its
overall contribution to the financial performance of
the consolidated Group for the six months ended 31 March
2022 is not significant.
The total number of passengers carried increased by 471% to 23.4
million (H1 2021: 4.1 million), which was driven by a 373% increase
in seats flown to 30.3 million seats (H1 2021: 6.4 million seats)
and a 13.6 percentage point increase in load factor to 77.3% (H1
2021: 63.7%). This reflects the reduction in travel restrictions
across Europe over the period and the associated strengthening in
customer demand as the recovery from Covid-19 continues.
Total revenue increased by 524% to GBP1,498 million (H1 2021:
GBP240 million) and by 544% at constant currency. Airline revenue
per seat increased by 29% to GBP47.61 (H1 2021: GBP36.93) and
increased by 33% at constant currency. The increase in Airline
revenue per seat is a consequence of increased loads, reflecting
the continued strengthening in demand driven by the reduction in
travel restrictions across Europe, as noted above. In addition,
strong performance from both bag and seat initiatives drove an
Airline ancillary revenue per seat increase of 44.6% compared to H1
2021.
Headline Airline cost per seat excluding fuel decreased by 59%
to GBP53.48 (H1 2021: GBP129.92) and 58% at constant currency. This
was mainly a result of increased flying, as fixed operating costs
are being spread across more flying capacity, combined with
easyJet's continued focus on cost which has also contributed to the
favourable movement. In addition, there was a release of airport
charge accruals of GBP10 million (H1 2021: GBP4 million) as the
return of activity has reduced some of the uncertainty and risks
which were previously being accrued for, and a credit from
maintenance discounting of GBP19 million (H1 2021: credit GBP22
million) due to the recent increase in US$ interest rates. The
major adverse impact on costs in the period was the significant
reduction in furlough schemes as government support has been wound
down across the majority of European countries (GBP8 million
support H1 2022 compared to GBP73 million support H1 2021).
Airline fuel cost per seat decreased by 21% to GBP11.94 (H1
2021: GBP15.08) and by 20% at constant currency, as a result of
both a reduction in the post hedge fuel price and a reduction in
the average sector length compared to the previous period.
A non-headline charge of GBP12 million (H1 2021: GBP56 million
gain) was recognised in the period, consisting of a GBP21 million
loss as a result of the sale and leaseback of 10 aircraft (H1 2021:
GBP60 million gain from 35 aircraft) in the period and an GBP8
million release (H1 2021: GBP25 million release) in relation to our
restructuring provisions. In addition to this, a GBP1 million net
fair value adjustment credit for hedge discontinuation was
recognised in the period (H1 2021: GBP29 million charge).
Corporate tax has been recognised at a statutory effective rate
of 22.7% (H1 2021: 14.9%) based on the anticipated tax rate for the
full year ending 30 September 2022, resulting in an overall tax
credit of GBP126 million (H1 2021: GBP96 million credit) during the
period. This splits into a tax credit of GBP123 million on the
underlying losses and a tax credit of GBP3 million on the
non-headline items. Whilst the non-headline loss is GBP12 million,
after the necessary tax adjustments the tax adjusted non-headline
items amount to a loss of GBP14 million, which results in the
non-headline tax credit of GBP3 million for the period.
Loss per share
H1 2022 H1 2021 Change
restated
pence pence pence
per share per share per share
=============================== =========== =========== ===========
Basic headline loss per share (56.0) (106.9) 50.9
Basic total loss per share (57.2) (102.0) 44.8
Basic headline loss per share decreased by 50.9 pence and basic
total loss per share decreased by 44.8 pence as a consequence of
the lower loss generated during the period.
As a result of the rights issue in September 2021, the
comparative loss per share has been restated having applied the
relevant bonus factor to the calculator of the weighted average
number of shares.
Return on Capital Employed (ROCE)
ROCE Calculation
Reported GBPm H1 2022 H1 2021
======================================= ======== ========
Headline loss before interest and tax (486) (686)
UK corporation tax rate 19% 19%
======================================== ======== ========
Normalised headline operating loss
after tax (NOPAT) (394) (556)
======================================== ======== ========
Average shareholders' equity 2,540 1,741
Average net debt 753 1,570
======================================== ======== ========
Average adjusted capital employed 3,293 3,311
======================================== ======== ========
Headline Return on capital employed (12.0%) (16.8%)
======================================== ======== ========
Total Return on capital employed (12.3%) (14.7%)
======================================== ======== ========
ROCE is calculated by taking operating loss/profit, less tax at
the prevailing UK corporation tax rate at the end of the period,
divided by average capital employed. Capital employed is
shareholders' equity plus net debt.
Headline ROCE for the period was (12.0)%, an improvement of 4.8
percentage points on the prior period, driven by the decrease in
the loss for the period. Total ROCE for the period was (12.3)%, an
improvement of 2.4 percentage points on the prior year. The total
ROCE was adverse to the headline ROCE due to non-headline items
generating a GBP12m charge in the income statement, as noted
earlier.
SUMMARY NET DEBT RECONCILIATION
The table presents cash flows on a net cash basis. This
presentation is different to the GAAP presentation of the statement
of cash flows in the condensed financial information as it includes
non-cash movements on debt facilities.
H1 2022 H1 2021 Change
GBP million GBP million GBP million
=========================================== ============ ============ ============
Operating loss (499) (601) 102
Depreciation and amortisation 277 215 62
Increase in unearned revenue 934 48 886
Other net working capital movement (157) (731) 574
Net tax paid 1 (5) 6
Net capital expenditure (247) (73) (174)
Net proceeds from sale and leaseback of
aircraft 87 810 (723)
Purchase of own shares for employee share
schemes (4) (3) (1)
Repayment of capital element of leases (92) (174) 82
Foreign exchange impact 21 (114) 135
Net funding activities 97 (148) 245
Other (104) (114) 10
============================================ ============ ============ ============
Net decrease/(increase) in net debt 314 (890) 1,205
============================================ ============ ============ ============
Net debt at the beginning of the period (910) (1,125) 215
============================================ ============ ============ ============
Net debt at the end of the period (596) (2,015) 1,419
============================================ ============ ============ ============
Net debt as at 31 March 2022 was GBP596 million (31 March 2021:
GBP2,015 million) and comprised cash and cash equivalents and money
market deposits of GBP3,505 million (31 March 2021: GBP2,335
million), borrowings of GBP3,046 million (31 March 2021: GBP3,323
million) and lease liabilities of GBP1,055 million (31 March 2021:
GBP1,027 million).
The unearned revenue inflow has increased by GBP886 million, as
a result of the increased customer bookings in response to the
removal of Covid-19 travel restrictions. Other working capital
outflows have decreased by GBP574 million compared to the prior
period. The prior period saw an unusually large decrease in the
trade payables balance as a catch-up effect from the initial
lockdown period, when many supplier accounts were put onto phased
payment plans as part of our cash protection measures. This year
has seen a return to more normal payment patterns.
Net capital expenditure includes pre-delivery payments relating
to aircraft purchases. There were also final delivery payments for
the acquisition of 5 aircraft in the period (H1 2021: nil
aircraft). The sale and leaseback of 10 aircraft in H1 2022 (H1
2021: 35 aircraft) resulted in a net cash inflow of GBP87 million
(H1 2021: GBP810 million). Repayment of the capital element of
leases has decreased by GBP82 million as a result of the prior
period having additional deferred payments from H2 2020 included.
The net funding activities predominantly relate to the final GBP91
million rights issue receipt.
EXCHANGE RATES
The proportion of revenue and costs denominated in currencies
other than Sterling are outlined below:
Revenue Costs
================== ==================
H1 2022 H1 2021 H1 2022 H1 2021
================================= ======== ======== ======== ========
Sterling 45% 30% 37% 67%
Euro 45% 54% 24% 5%
US dollar 0% 0% 33% 22%
Other (principally Swiss franc) 10% 16% 6% 6%
================================== ======== ======== ======== ========
Average exchange rates H1 2022 H1 2021
================================= ======== ======== ======== ========
Euro EUR1.19 EUR1.10
US dollar $1.35 $1.30
Swiss franc CHF CHF
1.24 1.33
================================== ======== ======== ======== ========
The Group's foreign currency risk management policy aims to
reduce the impact of fluctuations in exchange rates on future cash
flows.
During the period there was a GBP2 million gain (H1 2021: GBP24
million gain) arising from the revaluation of balance sheet assets
and liabilities which are denominated in foreign currencies. In
addition, the change in USD decreased the cost of fuel by GBP4
million when translated into sterling.
FINANCIAL PERFORMANCE
Revenue
GBPm Group H1 2022 H1 2021
====================== ======== ========
Passenger revenue 985 170
Ancillary revenue 513 70
Total revenue 1,498 240
======================= ======== ========
GBP Airline per seat
====================== ======== ========
Passenger revenue 32.49 26.47
Ancillary revenue 15.12 10.46
Total revenue 47.61 36.93
======================= ======== ========
Total revenue increased by 524% to GBP1,498 million (H1 2021:
GBP240 million) and 544% at constant currency, primarily due to an
GBP883 million additional capacity volume impact. H1 capacity
finished at 30.3 million seats, which was 373% favourable to last
year driven by the reduction in travel restrictions and the
associated strengthening of customer demand.
Total Airline revenue per seat of GBP47.61 was 33% ahead of H1
2021 at constant currency and load factors of 77% were 13.6ppt
ahead. Likewise, total yield of GBP61.59 was 10% favourable when
compared against H1 2021 at constant currency, with ticket yields
3% favourable and ancillary yields continuing to perform very
strongly at 23% favourable.
Ancillary revenue of GBP513 million was 658% ahead of H1 2021 at
constant currency. This was principally due to a good performance
on initiatives with strong attachment across both bags and seats,
combined with the increase in passenger numbers compared to
H1'21.
Headline costs excluding fuel
H1 2022 H1 2021
=============================== ===================== ========================
Group Airline Airline
GBP GBP Group GBP per
million per seat GBP million seat
=============================== ========= ========== ============= =========
Operating costs and income
Airports, ground handling and
other operating costs 514 15.65 86 13.14
Crew 318 10.48 224 34.87
Navigation 110 3.63 25 3.84
Maintenance 157 5.16 109 17.01
Selling and marketing 68 2.03 17 2.54
Other costs 183 5.61 158 23.72
Other income (6) (0.11) (7) (1.03)
================================ ========= ========== ============= =========
1,344 42.45 612 94.09
========= ========== ============= =========
Ownership costs
Aircraft dry leasing 1 0.04 2 0.24
Depreciation 265 8.74 204 31.80
Amortisation 12 0.33 11 1.44
Net finance charges 59 1.92 15 2.35
================================ ========= ========== ============= =========
337 11.03 232 35.83
========= ========== ============= =========
Headline costs excluding fuel 1,681 53.48 844 129.92
================================ ========= ========== ============= =========
Headline cost per seat excluding fuel for the Airline decreased
by 59% to GBP53.48 (H1 2021: GBP129.92), and also decreased by 59%
at constant currency.
Included within the Group headline costs excluding fuel of
GBP1,681 million, GBP40 million related to the holidays
business.
Operating costs and income
Group airports, ground handling and other operating costs
increased by 498% to GBP514 million, and Airline cost per seat
increased by 19% to GBP15.65 (H1 2021: GBP13.14), and by 23.1% at
constant currency. Despite overall rate decreases being obtained
across several airports, and a release of airport charge accruals
of GBP10 million (H1 2021: GBP4 million) as the return of activity
has reduced some of the uncertainty and risks which were previously
being accrued for, improved load factors, an increase in security
charges and de-icing events drove the increase on a per seat
basis.
Group crew costs increased by 42% to GBP318 million (H1 2021:
GBP224 million), and Airline cost per seat decreased by 70% to
GBP10.48, and by 69.1% at constant currency. This cost per seat
decrease was primarily due to fixed payroll costs being spread over
higher flying capacity, partially offset by furlough schemes which
have been significantly reduced in the period (GBP8 million support
H1 2022 v GBP73 million support H1 2021).
Group navigation costs increased by 340% to GBP110 million, and
Airline cost per seat decreased by 5% to GBP3.63 (H1 2021: GBP3.84)
and by 1.2% at constant currency, as a result of a decrease in the
sector length of our commercial flying compared to the comparative
period, offset by an increase in EuroControl rates effective
January 2022.
Group maintenance costs increased by 44% to GBP157 million, and
Airline cost per seat decreased by 70% to GBP5.16 (H1 2021:
GBP17.01), and decreased by 69.4% at constant currency. This cost
per seat decrease was driven by the fixed element of our
maintenance costs which have been spread over increased capacity in
the period, whilst also having a reduction in repair costs and
cleaning costs, the latter being driven by cost programme
savings.
Group other costs increased by 15% to GBP183 million, and
Airline cost per seat decreased by 76% to GBP5.61 (H1 2021:
GBP23.72), and by 69.8% at constant currency. The significant
driver in the decrease in the cost per seat is that fixed costs are
being spread over higher flown capacity.
Ownership costs
Depreciation costs have increased from GBP204 million in H1 2021
to GBP265 million in H1 2022. This increase was driven by higher
maintenance-related depreciation as a result of increased flying
hours, combined with an increase in the number of leased aircraft.
This increase was partially offset by the regular discounting of
the maintenance provision which resulted in a credit in the income
statement of GBP19 million (H1 2021: credit GBP22 million) due to
the recent increase in US$ interest rates.
Net finance charges have increased from GBP15 million in H1 2021
to GBP59 million in H1 2022 with cost per seat decreasing from
GBP2.35 to GBP1.92, with the decrease per seat being a consequence
of the higher capacity, partially offset by increased bond interest
costs. In addition to this, foreign exchange gains as a result of
the retranslation of foreign currency denominated assets and
liabilities have reduced from GBP23 million in H1 2021 to GBP2
million in H1 2022.
Fuel costs
H1 2022 H1 2021
===================== ========================
Group Airline Group Airline
GBP GBP GBP million GBP per
million per seat seat
====== ========= ========== ============= =========
Fuel 362 11.94 97 15.08
======= ========= ========== ============= =========
Fuel costs for H1 2022 were GBP362 million, compared to GBP97
million for H1 2021. This increase in cost is largely driven by the
350% increase in flying volumes. Fuel cost per seat of GBP11.94 was
20.8% lower than last year, and decreased by 19.8% at constant
currency.
During the first half of the year the average market price
payable for jet fuel increased by 99% from $382 per tonne in H1
2021 to $762 per tonne in H1 2022. However, the post hedge fuel
price for H1 2022 was only $599 per tonne, which is 13% lower than
the post hedge fuel price of $688 per tonne in H1 2021. The low
post hedge price in H1 2022 is due to forward contracts maturing
which were locked in at low rates when the fuel price was much
lower in 2021. The sector length has dropped 10.3% from 1,261km to
1,131km, which has materially reduced the cost per seat in H1 2022
compared to H1 2021.
The Group uses jet fuel derivatives to hedge against sudden and
significant increases in jet fuel prices to mitigate cash and
P&L volatility in the short term. In order to manage the risk
exposure, jet fuel derivative contracts are used in line with the
Board approved policy to hedge up to 18 months of estimated
exposures in advance, with approximately 60% hedged on average in
the first 12 months.
KEY STATISTICS
OPERATING MEASURES
H1 Increase/
2022 H1 2021 (decrease)
----------------------------------------------- -------- --------- ---------------------
Seats flown (millions) 30.3 6.4 373%
Passengers (millions) 23.4 4.1 471%
Load factor 77.3% 63.7% 13.6 ppts
Available seat kilometres (ASK) (millions) 34,287 8,088 323.9%
Revenue passenger kilometres (RPK) (millions) 26,811 5,136 422.0%
Average sector length (kilometres) 1,131 1,261 (10.3%)
Sectors 167,865 35,100 378.2%
Block hours ('000) 329,060 73,311 348.9%
Number of aircraft owned/leased at end of
period 322 330 (2.4%)
Average number of aircraft owned/leased
during period 322 338 (4.6%)
Number of aircraft operated at end of period 271 36 652.8%
Average number of aircraft operated during
period 204 58 251.7%
Number of routes operated at end of period 930 918 1.3%
Number of airports served at end of period 150 151 (0.7%)
------------------------------------------------ -------- --------- ---------------------
FINANCIAL MEASURES
H1
2022 H1 2021 Favourable/(adverse)
----------------------------------------------- -------- --------- ---------------------
Total return on capital employed (12.3%) (14.7%) 2.4 ppts
Headline return on capital employed (12.0%) (16.8%) 4.8 ppts
Total Airline loss before tax per seat (GBP) (18.20) (99.30) 81.7%
Headline Airline loss before tax per seat
(GBP) (17.81) (108.07) 83.5%
Total Airline loss before tax per ASK (pence) (1.61) (7.87) 79.5%
Headline Airline loss before tax per ASK
(pence) (1.57) (8.57) 81.7%
------------------------------------------------ -------- --------- ---------------------
Revenue
----------------------------------------------- -------- --------- ---------------------
Airline revenue per seat (GBP) 47.61 36.93 28.9%
Airline revenue per seat at constant currency
(GBP) 49.06 36.93 32.8%
Airline revenue per ASK (pence) 4.21 2.93 43.7%
Airline revenue per ASK at constant currency
(pence) 4.24 2.93 44.7%
Airline revenue per passenger (GBP) 61.59 57.96 6.3%
Airline revenue per passenger at constant
currency (GBP) 62.08 57.96 7.1%
------------------------------------------------ -------- --------- ---------------------
Costs
----------------------------------------------- -------- --------- ---------------------
Per seat measures
Airline headline cost per seat (GBP) (65.42) (145.00) 54.9%
Airline non-headline (cost)/income per seat
(GBP) (0.40) 8.77 (104.6%)
Airline total cost per seat (GBP) (65.81) (136.23) 51.7%
Airline headline cost per seat excluding
fuel (GBP) (53.48) (129.92) 58.8%
Airline headline cost per seat excluding
fuel at constant currency (GBP) (54.71) (133.51) 59.0%
Airline total cost per seat excluding fuel
(GBP) (53.87) (121.15) 55.5%
Airline total cost per seat excluding fuel
at constant currency (GBP) (55.12) (124.72) 55.8%
Per ASK measures
Airline headline cost per ASK (pence) (5.78) (11.49) 49.7%
Airline non-headline (cost)/income per ASK
(pence) (0.04) 0.70 (105.7%)
Airline total cost per ASK (GBP) (5.82) (10.80) 46.1%
Airline headline cost per ASK excluding
fuel (pence) (4.73) (10.30) 54.1%
Airline headline cost per ASK excluding
fuel at constant currency (pence) (4.84) (9.45) 48.8%
Airline total cost per ASK excluding fuel
(pence) (4.76) (9.61) 50.5%
Airline total cost per ASK excluding fuel
at constant currency (pence) (4.87) (9.02) 46.0%
------------------------------------------------ -------- --------- ---------------------
PRINCIPAL RISKS AND UNCERTAINTIES
easyJet continues to face a range of risks that could impact
delivery of our corporate and strategic initiatives. The easyJet
Board is responsible for determining the nature of these risks and
ensuring that appropriate mitigating actions are in place to manage
them. The Board delegates responsibility to the Corporate Risk team
to manage the Corporate Risk Framework. easyJet continues to
develop its Corporate Risk Framework to ensure that risks,
including emerging risks, are identified, assessed, managed, and
articulated.
Over the course of H1 2022 the Corporate Risk team has spent
time with each area of the business, ensuring that risks continue
to be identified and assessed in line with the Risk Framework. This
has been conducted via functional and business unit risk
reviews.
The principal risks and uncertainties set out in the 2021 Annual
Report and Accounts have not materially changed except for the
inclusion of a specific Climate Change Transition Risk. This
follows a deep dive into the risks arising from society's
transition to a low carbon and a more climate-friendly future. Two
existing principal risks (Carbon Trading Schemes and Increased
Taxation) have been incorporated into the new Climate Change
Transition Risk.
easyJet's risk themes remain unchanged and are as follows:
-- Asset Efficiency & Effectiveness
-- Environment & Sustainability
-- Legislative / Regulatory Landscape
-- Macro-economic & Geopolitical
-- People
-- Safety, Security, and Operations
-- Technology & Cyber
For the second half of FY22, the Directors consider that the
principal risks and uncertainties detailed in the 2021 Annual
Report and Accounts (with the addition of the Climate Change
Transition risk detailed below) are expected to be representative
of the potential impacts on the Group's performance. In addition to
continually reviewing the risks reported in the 2021 Annual Report
and Accounts, and emerging risks, the Board is monitoring the
impact of the Ukraine crisis which is set out below.
Case Study: Climate Change Transition Risks
The Corporate Risk and Sustainability teams have concluded a
deep dive to identify the risks that easyJet faces as it
transitions to a low carbon and a more climate-friendly future.
The diagram below shows how the risks identified have been
categorised and structured within the Corporate Risk Framework and
Register.
Principal Climate Change Transition Risk
Risk Risks arising from easyJet's response to societal
and economic shifts toward a low-carbon and more
climate-friendly future
Corporate Cost of Emissions Civil Society Emissions Financial
Risk A changing (incl. Consumer) Reduction Markets Sentiment
legal and Sentiment Technological Divestment
regulatory Changing preferences and operational of carbon intensive
landscape to sustainable developments assets and/
that impacts alternatives that drive or assets that
price e.g. a step change are not working
carbon pricing reduction in towards Net-Zero
mechanisms, aviation emissions
green taxes e.g. novel
(e.g. incl. aircraft, SAF,
NOx and "persistent modernised
contrails") airspace
and demand
suppression
policies,
and how these
pricing impacts
will affect
easyJet
--------------------- ---------------------- -------------------- ---------------------
Functional Reputation
Risks Perception of an organisation's contribution to a
lower-carbon transition
----------- ------------------------------------------------------------------------------------------
Climate Related Litigation & Regulatory Action
Climate change-related regulatory and legal challenges
faced by organisations
----------- ------------------------------------------------------------------------------------------
Sub-risks Sub-risks Sub-risks Sub-risks
----------- --------------------- ---------------------- -------------------- ---------------------
The workshops involved colleagues from every area of the
business and identified the key functional level risks within each
corporate level risk category. These have been documented in the
Climate Change Transition risk register and appropriate ownership
and management assigned. Governance for these risks will be applied
through easyJet's Sustainability Steering Committee, which will
regularly review and challenge the risks and associated controls.
The Climate Change Risk Register, along with the Net Zero Plan,
will be continually reviewed and are inputs into the five year
planning process, which includes the Strategic Plan and Financial
Plan.
Ukraine Crisis
easyJet is deeply shocked and saddened by the Russian invasion
of Ukraine. While our flying schedule has been unaffected, risks
have arisen and required a response by the appropriate functions.
Sharp increases in fuel costs have been mitigated through our fuel
hedging policy and have ensured the cost incurred per metric tonne
has remained (and will continue to do so through Winter '22) well
below the current spot rates. Our Digital Safety team continues to
monitor the increased threat of a cyber-attack to our network and
systems. Recent increased investment into our cyber defences has
improved our monitoring capabilities and allows the business to
respond quickly and effectively as threats arise. The potential for
increased aviation insurance premiums and/ or changes to insurance
coverage may occur due to the likelihood of a significant insurance
claim arising from western leased aircraft trapped in Russia.
easyJet has very limited influence over this risk, as it is not
involved in this insurance claim, but it will continue to
differentiate itself from competitors in the insurance market in
order to achieve the insurance costs and pricing that support the
business' objectives. Rising costs, especially
from our supply chain, continue to be monitored as they develop.
It is too early to fully report on the impact, but the Corporate
Risk team will work with the central Procurement team to monitor
the risk and respond appropriately.
CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
Condensed consolidated income statement (unaudited)
Six months ended 31 March
2022 2021
----------------------------------- -----------------------------------------
Non-headline Non-headline
(note (note
Headline 3) Total Headline 3) Total
--------- ------------- --------- ------------ ------------- ------------
GBP GBP GBP
Notes million million million GBP million GBP million GBP million
---------------------- ------- --------- ------------- --------- ------------ ------------- ------------
Passenger revenue 985 - 985 170 - 170
Ancillary revenue 513 - 513 70 - 70
----------------------- ------- --------- ------------- --------- ------------ ------------- ------------
Total revenue 1,498 - 1,498 240 - 240
Fuel (362) - (362) (97) - (97)
Airports, ground handling and
other
operating costs (514) - (514) (86) - (86)
Crew (318) - (318) (224) - (224)
Navigation (110) - (110) (25) - (25)
Maintenance (157) - (157) (109) - (109)
Selling and marketing (68) - (68) (17) - (17)
Other costs (183) (12) (195) (158) 17 (141)
Other income 6 (1) 5 7 68 75
----------------------- ------- --------- ------------- --------- ------------ ------------- ------------
EBITDAR (208) (13) (221) (469) 85 (384)
Aircraft dry leasing (1) - (1) (2) - (2)
Depreciation 7 (265) - (265) (204) - (204)
Amortisation of
intangible
assets (12) - (12) (11) - (11)
----------------------- ------- --------- ------------- --------- ------------ ------------- ------------
Operating
(loss)/profit (486) (13) (499) (686) 85 (601)
Interest receivable and other
financing
income 6 2 8 26 25 51
Interest payable and
other
financing charges (65) (1) (66) (41) (54) (95)
----------------------- ------- --------- ------------- --------- ------------ ------------- ------------
Net finance charge (59) 1 (58) (15) (29) (44)
Loss before tax (545) (12) (557) (701) 56 (645)
Tax credit/(charge) 4 123 3 126 126 (30) 96
Loss for the period (422) (9) (431) (575) 26 (549)
-------------------------------- --------- ------------- --------- ------------ ------------- ------------
Loss per share, pence
Basic 5 (57.2) (102.0)
----------------------- ------- --------- ------------- --------- ------------ ------------- ------------
Condensed consolidated statement of comprehensive income
(unaudited)
Six months Six months
ended ended
31 March 2022 31 March 2021
Notes GBP million GBP million
--------------------------------------------- ------ -------------- --------------
Loss for the period (431) (549)
Other comprehensive loss
Items that may be reclassified to the
income statement
Cash flow hedges
Fair value gains in the period 396 281
Gains transferred to income statement (118) (27)
Hedge discontinuation (gains)/losses
transferred to income statement (5) 28
Related tax charge 4 (53) (53)
Cost of hedging 3 (2)
Items that will not be reclassified
to the income statement
Remeasurement of post-employment benefit
obligations 23 (2)
Related deferred tax charge 4 (6) (1)
240 224
Total comprehensive loss for the period (191) (325)
---------------------------------------------- ------ -------------- --------------
Condensed consolidated statement of financial position
(unaudited)
31 March
30 September
2022 2021
Notes GBP million GBP million
---------------------------------------- ------ ------------ -------------
Non-current assets
Goodwill 365 365
Other intangible assets 216 217
Property, plant and equipment 7 4,683 4,735
Derivative financial instruments 31 86
Equity investments 30 30
Restricted cash 1 1
Other non-current assets 49 135
Deferred tax assets 109 39
----------------------------------------- ------ ------------ -------------
5,484 5,608
Current assets
Trade and other receivables 336 291
Intangible assets 519 140
Derivative financial instruments 487 185
Restricted cash 4 13
Money market deposits 258 -
Cash and cash equivalents 3,247 3,536
----------------------------------------- ------ ------------ -------------
4,851 4,165
Current liabilities
Trade and other payables (1,362) (1,128)
Unearned revenue (1,778) (844)
Borrowings 8 (423) (300)
Lease liabilities (230) (189)
Derivative financial instruments (9) (31)
Current tax payable (6) (2)
Provisions for liabilities and charges 9 (177) (183)
----------------------------------------- ------ ------------ -------------
(3,985) (2,677)
Net current assets 866 1,488
Non-current liabilities
Unearned revenue (2) (2)
Borrowings 8 (2,623) (3,067)
Lease liabilities (825) (890)
Derivative financial instruments (38) (37)
Non-current deferred income (4) (4)
Post-employment benefit obligations (11) (37)
Provisions for liabilities and charges 9 (407) (420)
(3,910) (4,457)
Net assets 2,440 2,639
----------------------------------------- ------ ------------ -------------
Shareholders' equity
---------------------------------------- ------ ------------ -------------
Share capital 207 207
Share premium 2,166 2,166
Hedging reserve 364 156
Cost of hedging reserve 2 (1)
Translation reserve (2) -
Retained earnings (297) 111
----------------------------------------- ------ ------------ -------------
Total Equity 2,440 2,639
Condensed consolidated statement of cash flows (unaudited)
Six months Six months
ended ended
31 March 31 March
2022 2021
Notes GBP million GBP million
---------------------------------------------- ------ ------------ ------------
Cash flows from operating activities
Cash generated/(used) from operations 11 590 (1,118)
Interest and other financing charges
paid (148) (71)
Net tax paid 1 (5)
----------------------------------------------- ------ ------------ ------------
Net cash generated/(used) from operating
activities 443 (1,194)
Cash flows from investing activities
Purchase of property, plant and equipment (236) (71)
Purchase of non-current intangible assets (11) (2)
Net (increase)/decrease in money market
deposits (258) 32
Net proceeds from sale and leaseback
of aircraft 87 810
Net cash (used)/generated from investing
activities (418) 769
Cash flows from financing activities
Proceeds from issue of ordinary share
capital 91 -
Share issue transaction costs (37) -
Purchase of own shares for employee share
schemes (4) (3)
Proceeds from Eurobond issue and UKEF - 1,804
Repayment of bank loans and other borrowings (300) (1,043)
Repayment of capital element of leases (92) (174)
Net decrease in restricted cash 9 6
----------------------------------------------- ------ ------------ ------------
Net cash (used)/generated by financing
activities (333) 590
Effect of exchange rate changes 19 (114)
Net (decrease)/increase in cash and
cash equivalents (289) 51
Cash and cash equivalents at beginning
of period 3,536 2,284
Cash and cash equivalents at end of
period 3,247 2,335
----------------------------------------------- ------ ------------ ------------
Condensed consolidated statement of changes in equity
(unaudited)
Cost
Share Share Hedging of hedging Translation Retained
capital premium reserve reserve reserve earnings Total
GBP GBP GBP GBP GBP
million million million million GBP million million GBP million
------------------ ----------- ----------- ----------- ----------- ------------ ------------ ------------
At 1 October 2021 207 2,166 156 (1) - 111 2,639
Loss for the
period - - - - - (431) (431)
Other
comprehensive
income - - 220 3 - 17 240
Total
comprehensive
income/(loss) - - 220 3 - (414) (191)
Transfers to
Property
Plant &
Equipment - - (12) - - - (12)
Share incentive
schemes
Value of
employee
services - - - - - 10 10
Purchase of own
shares - - - - - (4) (4)
Currency
translation
differences - - - - (2) - (2)
------------------ ----------- ----------- ----------- ----------- ------------ ------------ ------------
At 31 March 2022 207 2,166 364 2 (2) (297) 2,440
------------------ ----------- ----------- ----------- ----------- ------------ ------------ ------------
Cost
Share Share Hedging of hedging Translation Retained
capital premium reserve reserve reserve earnings Total
GBP GBP GBP GBP
million million million million GBP million GBP million GBP million
------------------ ----------- ----------- ----------- ----------- ------------ ------------ ------------
At 1 October 2020 125 1,051 (236) 1 (2) 960 1,899
Loss for the
period - - - - - (549) (549)
Other
comprehensive
income/(expense) - - 228 (2) - (2) 224
Total
comprehensive
income/(loss) - - 228 (2) - (551) (325)
Share incentive
schemes
Value of
employee
services - - - - - 8 8
Purchase of own
shares - - - - - (3) (3)
Currency
translation
differences - - - - 3 - 3
------------------ ----------- ----------- ----------- ----------- ------------ ------------ ------------
At 31 March 2021 125 1,051 (8) (1) 1 414 1,582
------------------ ----------- ----------- ----------- ----------- ------------ ------------ ------------
The hedging reserve comprises the effective portion of the
cumulative net change in fair value of cash flow hedging
instruments relating to highly probable transactions that are
forecast to occur after the period end.
Notes to the condensed consolidated interim financial
information (unaudited)
1. General information
easyJet plc (the Company) is a Company registered in England
(Company no. 03959649) domiciled in the United Kingdom (UK). The
condensed consolidated interim financial information of the Company
as at and for the six months ended 31 March 2022 comprise the
Company and its interest in its subsidiaries (together referred to
as the Group). Its principal business is that of a low-cost airline
carrier operating primarily in Europe. The consolidated financial
statements of the Group as at and for the year ended 30 September
2021 are available upon request to the Company Secretary from the
Company's registered office at Hangar 89, London Luton Airport,
Luton, Bedfordshire, LU2 9PF or are available on the corporate
website at http://corporate.easyJet.com.
Basis of preparation
The condensed consolidated interim financial information has
been prepared in accordance with IAS 34 'Interim Financial
Reporting' under UK-adopted international accounting standards and
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority. It should be read in conjunction with
the Annual Report and Accounts for the year ended 30 September
2021, which were prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006 and in accordance with IFRSs adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European
Union.
The annual financial statements for the Group for the year ended
30 September 2022 will be prepared in accordance with UK-adopted
international accounting standards in conformity with the
requirements of the Companies Act 2006. This will not result in any
change in accounting from the year ended 30 September 2021.
The interim financial information does not constitute statutory
accounts within the meaning of sections 434 and 435 of the
Companies Act 2006. Statutory accounts for the year ended 30
September 2021 were approved by the Board of Directors on 30
November 2021 and have been delivered to the Registrar of
Companies. The report of the auditors was unqualified.
The Group's financial risk management objectives and policies
are materially consistent with those disclosed in the consolidated
financial statements as at and for the year ended 30 September
2021.
Going concern
In adopting the going concern basis for preparing these interim
financial statements, the Directors have considered easyJet's
business activities, together with factors likely to affect its
future development and performance, as well as easyJet's principal
risks and uncertainties.
As at 31 March 2022 easyJet has a net debt position of GBP0.6
billion including cash and cash equivalents and money market
deposits of GBP3.5 billion, with unrestricted access to GBP4.4
billion of liquidity (including GBP258 million of money market
deposits) and has retained ownership of 55% of the total fleet with
39% being unencumbered.
The Directors have reviewed the financial forecasts and funding
requirements with consideration given to the potential impact of
severe but plausible risks. easyJet has modelled a base case
representing management's best estimation of how the business plans
to recover trading in light of the relaxation of travel
restrictions coming out of the pandemic. The model assumes near
2019 capacity for H2 2022 and a return to 2019 capacity for 2023
financial year.
The business is exposed to fluctuations in fuel prices and
foreign exchange rates. easyJet is currently c.71% hedged for fuel
in H2 of FY22 at c.US$619 per metric tonne, c.49% hedged for H1
FY23 at c.US$701 and c.20% hedged for H2 FY23 at c.US$807 per
metric tonne.
In modelling the impact of severe but plausible downside risks,
the Directors have considered demand suppression leading to a
reduction in yield for 2023 to 2022 levels and reduced capacity of
5% as well as sensitivities on fuel price (fuel price assumed to
remain at higher levels to currently hedged/forward rates
throughout the forecast period), operational costs (additional
inflation assumed on all costs), and delays in delivery of
strategic initiatives. These impacts have been modelled across the
whole going concern period. In addition, this downside scenario
also includes a short-term partial grounding of 25% of the fleet
for one month in August to cover the range of severe but plausible
risks that could result in significant operational disruption. This
downside scenario resulted in a significant reduction in liquidity
but still maintained sufficient headroom on external liquidity
requirements.
After reviewing the current liquidity position, committed
funding facilities and the base case and severe but plausible
downside financial forecasts incorporating the uncertainties
described above, the Directors have a reasonable expectation that
the Group has sufficient resources to continue in operation for the
foreseeable future. For these reasons the Directors continue to
adopt the going concern basis of accounting in preparing the
Group's financial statements.
Accounting policies
The accounting policies adopted are consistent with those
described in the Annual report and accounts for the year ended 30
September 2021.
New and revised standards and interpretations
The amendments that became applicable for the first time in the
current annual reporting period, and did not have a material impact
were:
-- Covid-19 related rent concessions beyond June 30, 2021 -
Amendments to IFRS 16 Leases; and
-- Interest rate benchmark reform - Phase 2 - amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
In the financial year ending September 2020, the Group early
adopted the 'Interest Rate Benchmark Reform Phase 1' amendments to
IFRS 9 and IFRS 7 applying it retrospectively to accounting
relationships that existed before the start of the current
reporting period. The impact of IBOR reform on the Group was
assessed as being limited, with this amendment only applicable to
one hedge relationship. This allowed the Group to continue hedge
accounting for the impacted fair value hedge during the period of
uncertainty from interest rate benchmark reforms.
During the current reporting period, the Group has adopted the
'Interest Rate Benchmark Reform Phase 2' amendments to IFRS 9, and
IFRS 7 and has applied this to the specific hedging relationship
identified. Three cross-currency interest rate swaps are used to
convert the entire EUR500 million fixed rate Eurobond to a Sterling
floating rate exposure. All three swaps originally were based on
three-month LIBOR. Following the cessation of GBP LIBOR, the
floating interest transitioned to the ISDA Fallback Rate for
fixings from January 2022.
The Group has elected to apply the phase 2 reliefs and has
amended its hedge designation and documentation to reflect these
changes which are required by IBOR reform. Such amendments did not
give rise to the hedge relationship being discontinued.
The LIBOR transition working group which was formed in the prior
year continues to consider the wider impacts on the business of
these changes. No other material impacts have emerged during the
period.
There are no standards that are issued but not yet effective
that would be expected to have a material impact on the entity in
the current or future reporting periods and on foreseeable future
transactions.
Estimates and judgements
The preparation of accounts in conformity with generally
accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and
liabilities at the date of the accounts and the reported amounts of
income and expenses during the reporting period. Although these
amounts are based on management's best estimates, events or actions
may mean that actual results ultimately differ from those
estimates, and these differences may be material. The estimates and
the underlying assumptions are reviewed regularly.
In preparing these condensed consolidated interim financial
statements, the key judgements and estimates are, with the
exception of hedge discontinuation and ineffectiveness which is no
longer considered to be a key judgement, the same as those applied
in the most recently published consolidated financial
statements.
The Group has concluded that the deferred tax assets will be
recoverable against the unwind of the taxable temporary differences
and the future taxable income based on the strategic plans of the
Group. The losses can be carried forward indefinitely and have no
expiry date, but it is expected that the deferred tax asset would
be recovered within a seven-year time horizon.
2. Seasonality
The airline industry is highly seasonal and demand and yields
are significantly higher during the summer. Accordingly, revenue
and profitability are usually higher in the second half of the
financial year. Historically, easyJet has reported a loss/low
profit for the first half of the financial year which the ongoing
impact of the Covid-19 pandemic has continued to exacerbate.
3. Non-headline items
Non-headline items are those where, in management's opinion,
their separate reporting provides an additional understanding to
users of the financial statements of easyJet's underlying trading
performance, and which are significant by virtue of their size
and/or nature. In considering the categorisation of an item as
non-headline, management's judgement includes, but is not limited
to, a consideration of:
-- Whether the item is outside of the principal activities of
the easyJet Group (being to provide point-to-point airline services
and package holidays).
-- The specific circumstances which have led to the item
arising, including, if extinguishing an item from the balance
sheet, whether that item was first generated via headline or
non-headline activity. The rebuttable presumption being that when
subsequently extinguishing an item from the balance sheet, any
impact on the income statement should be reflected in the same way
as that which was used in the initial creation of the item.
-- The likelihood and potential regularity of recurrence.
-- Whether the item is unusual by virtue of its size.
Non-headline items may include impairments, amounts relating to
corporate acquisitions and disposals, expenditure on major
restructuring programmes and the gain or loss resulting from the
initial recognition of sale and leaseback transactions.
The measure of profit which excludes non-headline items is
described as 'headline' and is used by the Directors to measure and
monitor performance.
An analysis of the amounts presented as 'non-headline' is given
below:
Six months Six months ended
ended
31 March 31 March 2021
2022
GBP million GBP million
----------------------------------------------- ------------ -----------------
Sale and leaseback loss/(gain) 21 (60)
Restructuring credit (8) (25)
------------------------------------------------ ------------ -----------------
Recognised in operating loss 13 (85)
------------------------------------------------ ------------ -----------------
Hedge discontinuation (credit)/charge (1) 29
------------------------------------------------ ------------ -----------------
Total non-headline charge/(credit) before tax 12 (56)
------------------------------------------------ ------------ -----------------
Tax on non-headline items (3) 30
------------------------------------------------ ------------ -----------------
Total non-headline charge/(credit) after tax 9 (26)
------------------------------------------------ ------------ -----------------
Sale and leaseback
During the period, easyJet completed the sale and leaseback of
10 A319 aircraft (H1 2021: 7), nil A320 (H1 2021: 24) and nil A321
(H1 2021: 4). The Income Statement impact of the 10 sale and
leasebacks was a GBP21 million loss recognised in Other costs (H1
2021: GBP68 million gain recognised in Other income offset by a
GBP8m loss recognised in Other costs).
Restructuring
As a result of the Covid-19 pandemic a restructuring process was
undertaken. During the period the associated provision was updated
to reflect ongoing discussions with unions which resulted in an
GBP8 million credit being recognised within Other costs (H1 2021:
GBP25 million credit). The programme is expected to complete in the
financial year 2022.
Hedge discontinuations
This relates to hedge accounting ineffectiveness for items
currently held in fair value and cash flow hedge relationships, and
the cumulative fair value of financial derivatives at the time of
being discontinued from a previous hedge accounting
relationship.
In accordance with IFRS 9, hedge effectiveness testing is
performed on a regular, periodic basis. For cash flow hedges this
includes an assessment of highly probable future cash exposures
with the amount compared to the notional value of derivatives held
in a hedge relationship. Due to the reduced level of commercial
flying over the pandemic, easyJet has been in an over-hedged
position from both a jet fuel and FX perspective. Where forecast
exposures are no longer expected to occur, these previously hedged
amounts no longer qualify for hedge accounting. The cumulative fair
value movement of a GBP1m million net gain (2021: GBP29 million
loss) related to these ineffective derivatives held in Other
Comprehensive Income has then been immediately recorded in the
income statement.
Tax on non-headline items
After the necessary tax adjustments which principally relate to
the sale and leaseback transactions in both the current and
comparative periods, the tax adjusted non-headline items amount to
a loss of GBP14 million ( H1 2021: GBP159 million profit) which
results in a tax credit of GBP3 million (H1 2021: GBP30 million
charge) for the period.
4. Tax credit
Tax on loss on ordinary activities:
Six months Six months
ended ended
31 March 31 March
2022 2021
GBP million GBP million
------------------------------------------------- ------------ ------------
Current tax 3 1
Deferred tax (129) (97)
-------------------------------------------------- ------------ ------------
(126) (96)
------------------------------------------------- ------------ ------------
Effective tax rate 22.7% 14.9%
-------------------------------------------------- ------------ ------------
Effective tax rate excluding rate change impact 16.8% 14.9%
-------------------------------------------------- ------------ ------------
The forecast effective tax rate (using currently enacted rates)
is higher than the standard rate of corporation tax in the United
Kingdom (19%), principally due to timing differences being
recognised at the substantively enacted tax rate for deferred tax
(generally 25%). This is on the basis that the Finance Act 2021
confirmed the increase of the UK Corporation Tax rate from 19% to
25% effective from 1 April 2023. As such, timing differences that
unwind after this date are recognised at 25%.
Had this change in tax rate not been substantively enacted, the
effective tax rate (15.6%) would be lower than the standard rate of
corporation tax, principally due to permanent tax differences and
differences in tax rates in jurisdictions where easyJet has a
taxable presence outside of the UK. The permanent tax costs are as
a result of the sale and leaseback transactions (disclosed within
note 3) as well as other disallowable expenses.
The forecasted effective tax rates have been determined on the
premise that the tax loss as at H1 2022 is recoverable in full.
Tax on items recognised directly in other comprehensive income
Six months Six months
ended ended
31 March 31 March
2022 2021
GBP million GBP million
----------------------------------------------- ------------ ------------
Charge to other comprehensive income
Deferred tax charge on defined benefit scheme (6) (1)
Deferred tax on fair value movements of cash
flow hedges (53) (53)
------------------------------------------------ ------------ ------------
Total charge to other comprehensive income (59) (54)
There was no tax on items recognised directly in shareholders' equity
in the period (H1 2021: GBPnil).
5. Loss per share
As a result of the rights issue in September 2021, the
comparative loss per share has been restated having applied the
relevant bonus factor to the calculator of the weighted average
number of shares.
Six months Six months
ended ended
31 March
2022 31 March 2021
GBPmillion GBPmillion
(restated)
-------------------------------------------- ----------- --------------
Headline loss for the period (422) (575)
Total loss for the period (431) (549)
--------------------------------------------- ----------- --------------
Six months Six months
ended ended
31 March
2022 31 March 2021
million million
(restated)
-------------------------------------------- ----------- --------------
Weighted average number of ordinary shares
used to calculate basic loss per share 754 538
--------------------------------------------- ----------- --------------
Six months Six months
ended ended
31 March
2022 31 March 2021
pence pence
Basic loss per share (restated)
-------------------------------------------- ----------- --------------
Total (57.2) (102.0)
Adjustment for non-headline 1.2 (4.9)
--------------------------------------------- ----------- --------------
Headline (56.0) (106.9)
--------------------------------------------- ----------- --------------
Diluted earnings per share figures are not presented for either
period as the impact of potential ordinary shares is
anti-dilutive.
6. Segmental Reporting
Six months ending 31 March
2022
--------------------------- -----------------------------------------------
Airline Holidays Intra-group Group
transactions
GBP GBP GBP million GBP
million million million
--------------------------- --------- --------- -------------- ---------
Revenue 1,444 73 (19) 1,498
Operating costs excl fuel (1,287) (76) 19 (1,344)
Fuel (362) - - (362)
Ownership costs (335) (2) - (337)
---------------------------- --------- --------- -------------- ---------
Headline loss before tax (540) (5) - (545)
---------------------------- --------- --------- -------------- ---------
Non-headline items (12) - - (12)
---------------------------- --------- --------- -------------- ---------
Total loss before tax (552) (5) - (557)
---------------------------- --------- --------- -------------- ---------
Six months ending 31 March
2021
--------------------------- -----------------------------------------------
Airline Holidays Intra-group Group
transactions
GBP GBP GBP million GBP
million million million
--------------------------- --------- --------- -------------- ---------
Revenue 237 4 (1) 240
Operating costs excl fuel (604) (10) 1 (613)
Fuel (97) - - (97)
Ownership costs (229) (2) - (231)
---------------------------- --------- --------- -------------- ---------
Headline loss before tax (693) (8) - (701)
---------------------------- --------- --------- -------------- ---------
Non-headline items 56 - - 56
---------------------------- --------- --------- -------------- ---------
Total loss before tax (637) (8) - (645)
---------------------------- --------- --------- -------------- ---------
The intra-group transaction column represents intercompany costs
from Airline to holidays which are recorded at arm's length and are
eliminated on consolidation. Individual cost lines are not reported
separately as these are not key metrics reported to the Chief
Operating Decision Maker (CODM). Assets and liabilities are not
allocated to individual segments and are not separately reported to
or reviewed by the CODM, and therefore these have not been
disclosed. Interest income and expenditure are not allocated to
segments as this activity is driven by the central treasury
function which manages the cash position of the Group.
7. Property, plant and equipment
Right of use
assets held under
Owned assets leasing arrangements Total
------------------------------------------- -------------------------- ------------
Aircraft Land Aircraft
and spares and buildings Other and spares Other Total
------------ --------------- ------------ ------------ ------------ ------------
GBP million GBP million GBP million GBP million GBP million GBP million
--------------------- ------------ --------------- ------------ ------------ ------------ ------------
Cost
At 1 October 2021 4,802 44 55 2,335 45 7,281
Additions 240 - 5 56 - 301
Aircraft sold and
leased
back (215) - - 26 - (189)
Disposals (3) - - - - (3)
--------------------- ------------ --------------- ------------ ------------ ------------ ------------
At 31 March 2022 4,824 44 60 2,417 45 7,390
--------------------- ------------ --------------- ------------ ------------ ------------ ------------
Depreciation
At 1 October 2021 1,243 - 19 1,255 29 2,546
Charge for the
period 129 - 5 130 3 267
Aircraft sold and
leased
back (104) - - - - (104)
Disposals (2) - - - - (2)
--------------------- ------------ --------------- ------------ ------------ ------------ ------------
At 31 March 2022 1,266 - 24 1,385 32 2,707
--------------------- ------------ --------------- ------------ ------------ ------------ ------------
Net book value
--------------------- ------------ --------------- ------------ ------------ ------------ ------------
At 31 March 2022 3,558 44 36 1,032 13 4,683
--------------------- ------------ --------------- ------------ ------------ ------------ ------------
At 1 October 2021 3,559 44 36 1,080 16 4,735
--------------------- ------------ --------------- ------------ ------------ ------------ ------------
Right of use
assets held under
Owned assets leasing arrangements Total
---------------------------------------- -------------------------- ------------
Aircraft Land and Aircraft
and spares buildings Other and spares Other Total
------------ ------------ ------------ ------------ ------------ ------------
GBP million GBP million GBP million GBP million GBP million GBP million
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Cost
At 1 October 2020 5,520 44 44 1,692 37 7,337
Additions 112 - 28 148 8 296
Transfers 64 - - (64) - -
Aircraft sold and
leased
back (828)* - (15) 559 - (284)*
Disposals (66)* - (2) - - (68)*
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
At 30 September 2021 4,802 44 55 2,335 45 7,281
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Depreciation
At 1 October 2020 1,187 - 12 1,062 23 2,284
Charge for the period 227 - 7 216 6 456
Transfers 23 - - (23) - -
Aircraft sold and
leased
back (153)* - - - - (153)*
Disposals (41)* - - - - (41)*
At 30 September 2021 1,243 - 19 1,255 29 2,546
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Net book value
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
At 30 September 2021 3,559 44 36 1,080 16 4,735
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
At 1 October 2020 4,333 44 32 630 14 5,053
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
The net book value of aircraft includes GBP308 million (H1 2021:
GBP312 million) relating to advance and option payments for future
aircraft deliveries. This amount is not depreciated.
At 31 March 2022 easyJet was contractually committed to the
acquisition of 115 (H1 2021: 101) Airbus A320 family aircraft, with
a total list price of US$14.46 billion (H1 2021: US$12.31 billion)
before escalations and discounts for delivery. It is expected that
three aircraft will be delivered for the remainder of FY 2022 and
seven aircraft deliveries in FY 2023.
*GBP33m of cost and GBP33m of accumulated depreciation from
components disposed of in the year ended 30 September 2021 were
identified which were previously included as Disposals, which have
now been presented in Aircraft sold and leased back, reflecting the
aircraft with which they were associated.
8. Borrowings
Current Non-current Total
GBP
GBP million GBP million million
------------------------------------- ------------ ------------ ---------
At 31 March 2022
Eurobonds 423 1,838 2,261
Term Loan (UK Export Finance backed
facility) - 785 785
423 2,623 3,046
------------ ------------ ---------
At 30 September 2021
Eurobonds - 2,303 2,303
Term Loan (UK Export Finance backed
facility) - 764 764
Commercial Paper (Covid Corporate
Financing facility) 300 - 300
-------------------------------------- ------------ ------------ ---------
300 3,067 3,367
------------ ------------ ---------
Amounts above are shown net of issue costs or discounted amounts
which are amortised at the effective interest rate over the life of
the debt instruments.
The remaining Covid Corporate Financing Facility (CCFF) of
GBP300 million was repaid in November 2021.
See the note 10 for further information on borrowings.
9. Provisions for liabilities and charges
Provisions
Maintenance for customer Other Total
provisions claims Restructuring Provisions provisions
GBP
GBP million GBP million GBP million million GBP million
----------------------- ------------ -------------- -------------- ------------ ------------
At 1 October 2021 550 21 18 14 603
Exchange adjustments 10 - - - 10
Charged/(credited) to
income statement 44 13 (8) 1 50
Related to aircraft
sold and leased back 6 - - - 6
Unwinding of discount (19) - - - (19)
Utilised (51) (11) (4) - (66)
------------------------ ------------ -------------- -------------- ------------ ------------
At 31 March 2022 540 23 6 15 584
------------------------ ------------ -------------- -------------- ------------ ------------
Maintenance provisions comprise of maintenance costs arising
from legal and constructive obligations relating to the condition
of the aircraft when returned to the lessor. Restructuring and
other provisions include amounts in respect of potential
liabilities for employee-related matters and litigation which arose
in the normal course of business.
31 March 30 September
2022 2021
GBP million GBP million
------------- ------------ -------------
Current 177 183
Non-current 407 420
-------------- ------------ -------------
584 603
------------ -------------
Maintenance provisions are expected to be utilised within ten
years. Provisions for customer claims, restructuring, and other
provisions could be fully utilised within one year from 31 March
2022 and therefore are classified as current.
The split of the current / non-current maintenance provision is
based on the current expected maintenance event timings. If actual
aircraft usage varies from expectations, the timing of the
utilisation of the maintenance provision could result in a material
change in the classification between current and non-current.
10. Financial instruments
Carrying value and fair value of financial assets and
liabilities
The fair values of financial assets and liabilities, together
with the carrying value at each reporting date, are as follows:
Amortised
cost Held at fair value
------------------------ ---------------------------------
Fair Cash Other
Financial Financial value flow financial Other Carrying Fair
assets liabilities hedges hedges instruments (1) value value
------------ ---------- ------------ --------- -------- --------- --------
At 31 March GBP GBP GBP GBP GBP GBP GBP
2022 million million million million GBP million million million million
------------ --------- ---------
Other
non-current
assets 49 - - - - - 49 49
Trade and
other
receivables 141 - - - - 195 336 336
Trade and
other
payables - (1,125) - - - (237) (1,362) (1,362)
Derivative
financial
instruments - - 44 417 10 - 471 471
Restricted 5 - - - - - 5 5
cash
Money market
deposits 258 - - - - - 258 258
Cash and
cash
equivalents 1,909 - - - 1,338 - 3,247 3,247
Eurobonds
(3),(4),(5)
,(6) - (2,261) - - - - (2,261) (2,218)
Other
Borrowings
(7) - (785) - - - - (785) (785)
Lease
liabilities - (1,055) - - - - (1,055) N/A
Equity
Investments
(2) - - - - 30 - 30 30
Amortised cost Held at fair value
Fair Cash Other
Financial Financial value flow financial Other Carrying Fair
assets liabilities hedges hedges instruments (1) value value
At 30
September GBP GBP GBP GBP GBP GBP
2021 million GBP million million million GBP million million million million
Other
non-current
assets 135 - - - - - 135 135
Trade and
other
receivables 178 - - - - 113 291 291
Trade and
other
payables - (826) - - - (302) (1,128) (1,128)
Derivative
financial
instruments - - 53 153 (3) - 203 203
Restricted
cash 14 - - - - - 14 14
Cash and
cash
equivalents 1,932 - - - 1,604 - 3,536 3,536
Eurobonds
(3),(4),(5) - (2,303) - - - - (2,303) (2,380)
Other
Borrowings - (1,064) - - - - (1,064) (1,064)
Lease
liabilities - (1,079) - - - - (1,079) N/A
Equity
Investments
(2) - - - - 30 - 30 30
(1). Amounts disclosed in the 'Other' column are items that do
not meet the definition of a financial instrument. They are
disclosed to facilitate reconciliation of the carrying values of
financial instruments to line items presented in the statement of
financial position.
(2). The equity investment of GBP30 million represents a 13.2%
shareholding in a non--listed entity, The Airline Group Limited.
Valuation movements are designated as being fair valued through
other comprehensive income due to the nature of the investment
being held for strategic purposes.
(3). In February 2016, easyJet plc issued a EUR500 million bond
under the GBP3,000 million Euro Medium Term Note Programme
guaranteed by easyJet Airline Company Limited. The Eurobond is for
a seven year-term and pays an annual fixed coupon of 1.750%. At the
same time the Group entered into three cross-currency interest rate
swaps to convert the entire EUR500 million fixed rate Eurobond to a
Sterling floating rate exposure. All three swaps originally paid
floating interest (three-month LIBOR plus a margin) quarterly,
receive fixed interest annually, and have maturities matching the
Eurobond. Following the cessation of GBP LIBOR the floating
interest transitioned to the ISDA Fallback Rate for fixings from
January 2022. The Group designated all three cross-currency
interest rate swaps as a fair value hedge of the interest rate and
currency risks on the EUR500 million Eurobond. The swaps are
measured at fair value through profit or loss with any gains or
losses being taken immediately to the income statement (except
where related to timing differences related to-cross currency basis
amortisation). The carrying value of the Eurobond is adjusted for
changes in fair value attributable to the risks being hedged. This
net carrying value differs to the swap's fair value depending on
movements in the Group's credit risk and cross-currency basis. The
carrying value of the fixed rate Eurobond net of the cross-currency
interest rate swap at 31 March 2022 was GBP380 million. This value
does not include capitalised set-up costs incurred in the issuing
of the bond.
(4). In October 2016 easyJet plc issued a EUR500 million bond
under the GBP3,000 million Euro Medium Term Note Programme
guaranteed by easyJet Airline Company Limited. The Eurobond is for
a seven year term and pays an annual fixed coupon of 1.125%.
Shortly after the issuance of the EUR500 million bond the Group
entered into three cross-currency interest rate swaps to convert
the entire EUR500 million fixed rate Eurobond to a Sterling fixed
rate exposure. The cross-currency interest rate swaps were executed
on 8 November 2016 with settlement and notional exchange occurring
on 14 November 2016. All three swaps pay fixed interest
semi-annually, receive fixed interest annually, and have maturities
matching the Eurobond. The Group designated all three
cross-currency interest rate swaps as a cash flow hedge of the
currency risk on the EUR500 million Eurobond. The cross-currency
interest rate swaps are measured at fair value with the effective
portion taken through the statement of comprehensive income. The
element of the fair value generated by the change in the spot rate
is recycled to the income statement from the statement of
comprehensive income to offset the revaluation of the Eurobond. The
carrying value of the fixed rate Eurobond net of the cross-currency
interest rate swap at 31 March 2022 was GBP440 million. This value
does not include capitalised set-up costs incurred in the issuing
of the bond.
(5). In June 2019 easyJet plc issued a EUR500 million bond under
the GBP3,000 million Euro Medium Term Note Programme guaranteed by
easyJet Airline Company Limited. The Eurobond is for a six
year-term and pays an annual fixed coupon of 0.875%. At the same
time the Group entered into three cross-currency interest rate
swaps to convert the entire EUR500 million fixed rate Eurobond to a
Sterling fixed rate exposure. All three swaps pay fixed interest
semi-annually, receive fixed interest annually, and have maturities
matching the Eurobond. The Group designated all three
cross-currency interest rate swaps as a cash flow hedge of the
currency risk on the EUR500 million Eurobond. The cross-currency
interest rate swaps are measured at fair value with the effective
portion taken through the statement of comprehensive income. The
element of the fair value generated by the change in the spot rate
is recycled to the income statement from the statement of
comprehensive income to offset the revaluation of the Eurobond. The
carrying value of the fixed rate Eurobond net of the cross-currency
interest rate swap at 31 March 2022 was GBP440 million. This value
does not include capitalised set-up costs incurred in the issuing
of the bond.
(6) In March 2021 easyJet FinCo B.V. issued a EUR1,200 million
bond under the GBP3,000 million Euro Medium Term Note Programme
guaranteed by easyJet Airline Company Limited and easyJet PLC. The
Eurobond is for a seven-year term and pays an annual fixed coupon
of 1.875%. As at the period end this was not hedged.
(7) In January 2021 easyJet entered into a new five-year term
loan facility of $1.87 billion underwritten by a syndicate of banks
and supported by a partial guarantee from UK Export Finance under
their Export Development Guarantee scheme. easyJet drew down $1.05
billion from the UKEF backed facility in January 2021, utilising
these funds to repay and cancel the fully drawn $500 million
Revolving Credit Facility and repaying term loans of $245 million
and GBP200 million.
Fair value calculation methodology
Where available the fair values of financial instruments have
been determined by reference to observable market prices where the
instruments are traded. Where market prices are not available, the
fair value has been estimated by discounting expected future cash
flows at prevailing interest rates and by applying year end
exchange rates (excluding The Airline Group Limited equity
investment).
The fair values of the four Eurobonds are classified as level 1
of the IFRS 13 'Fair Value Measurement' fair value hierarchy
(valuations taken as the closing market trade price for each
respective Eurobond as on 31 March 2022). Apart from the equity
investment, the remaining financial instruments for which fair
value is disclosed in the table above, and derivative financial
instruments, are classified as level 2.
The fair values of derivatives are calculated using observable
market forward curves (e.g. forward foreign exchange rates, forward
interest rates or forward jet fuel prices) and discounted to
present value using risk free rates. The impacts of counterparty
credit, cross currency basis and market volatility are also
included where appropriate as part of the fair valuation.
The equity investment is classified as level 3 due to the use of
forecast cash flows not based on observable market data, which are
discounted to present value. The fair value is assessed at each
reporting date based on the discounted cash flows. If the level 3
forecast cash flows were 10% higher or lower the fair value would
not increase / decrease by a significant amount.
The fair value measurement hierarchy levels have been defined as
follows;
--Level 1, fair value of financial instruments based on quoted
prices (unadjusted) in active markets for identical assets or
liabilities.
--Level 2, fair value of financial instruments in an active
market (for example, over the counter derivatives) which are
determined using valuation techniques which maximise the use of
observable market data and rely as little as possible on entity
specific estimates.
--Level 3, fair value of financial instruments that are not
based on observable market data (i.e. unobservable inputs).
11. Reconciliation of operating loss to cash generated
from/(used in) operations
Six months Six months
ended ended
31 March 2022 31 March 2021
GBP million GBP million
Operating loss (499) (601)
Adjustments for non-cash items:
Depreciation 265 204
Amortisation of intangible assets 12 11
Loss on disposal of property, plant and
equipment and intangibles 4 3
Loss/(gain) on sale and leaseback 21 (60)
Share-based payments 10 8
Changes in working capital and other items
of an operating nature:
(Increase)/decrease in trade and other receivables (133) 31
Increase in current intangible assets (86) (88)
Decrease in trade and other payables (9) (448)
Increase in unearned revenue 934 48
Increase/(decrease) in post-employment benefit
contribution 5 (6)
Decrease in provisions (75) (71)
Decrease/(increase) in other non-current
assets 86 (4)
Decrease in derivative financial instruments 55 (144)
Decrease in non-current deferred income - (1)
Cash generated from/(used in) operations 590 (1,118)
12. Government Grants and assistance
In the period, the Group utilised schemes provided by
governments in Germany, France and Switzerland whereby employees
designated as being 'furloughed workers' are eligible to have a
portion of their wage costs recovered.
The total amount of such relief received by the Group in the
period amounted to GBP8 million (H1 2021: GBP73 million) and is
offset within employee costs in the Income statement. There are no
unfulfilled conditions or contingencies relating to these
schemes.
On 6 April 2020, easyJet issued a commercial paper through the
Covid Corporate Finance Facility (CCFF) implemented by the
government of the United Kingdom. Under the CCFF, easyJet received
GBP600 million, with interest incurred at the prevailing market
rate. In the previous financial year easyJet repaid GBP300 million
with the remaining GBP300 million repaid in November 2021.
13. Contingent liabilities and commitments
easyJet is involved in a number of disputes and litigation which
arose in the normal course of business. Where cases have proceeded
to a point that an estimation of a probable liability can be
reasonably estimated, a provision is recognised (note 9). However,
the likely outcome of many disputes and litigation cannot be
predicted, and in complex cases reliable estimates of any potential
obligation may not be possible.
On 19 May 2020, easyJet announced that it had been the target of
a cyber-attack from a highly sophisticated source. The email
addresses and travel details of approximately 9 million customers
were accessed and for a very small subset of customers (2,208),
credit card details were accessed.
The cyber-attack continues to be under investigation by the
Information Commissioner's Office (ICO). As the cyber-attack took
place before the United Kingdom left the European Union, the Group
expects the ICO to be investigating on behalf of all EU data
protection authorities as lead supervisory authority under the
GDPR. Any penalty or enforcement action will need to be reviewed
and approved by the other EU data protection authorities under the
GDPR's cooperation process. In addition, in May 2020, a class
action claim was filed in the UK High Court by a law firm
representing a class of affected customers and claims have also
been commenced or threatened in certain other courts and
jurisdictions.
The merit, likely outcome and potential impact on the Group of
the continued investigation by the ICO, group action and other
claims are still subject to a number of significant uncertainties
and therefore the Group is unable to assess the likely outcome or
quantum of the claims as at the date of these financial
statements.
At 31 March 2022 easyJet had outstanding letters of credit and
performance bonds totalling GBP72 million (H1 2021: GBP72 million),
of which GBP40 million (H1 2021: GBP43 million) expires within one
year. The fair value of these instruments at each period end was
negligible.
No amount is recognised in the statement of financial position
in respect of any of these financial instruments as it is not
probable that there will be an outflow of resources.
As part of the commitment to voluntary carbon offsetting,
easyJet currently has contractual commitments to purchase Verified
Emission Reductions worth GBP6 million (H1 2021: GBP22 million) in
total over the next year.
At 31 March 2022, easyJet has a capital commitment to purchase
two engines for GBP19 million by December 2022.
14. Related party transactions
The Company licenses the easyJet brand from easyGroup Ltd
('easyGroup'), a wholly owned subsidiary of easyGroup Holdings
Limited, an entity in which easyJet's founder, Sir Stelios
Haji-Ioannou, holds a beneficial controlling interest. The
Haji-Ioannou family concert party shareholding (being easyGroup
Holdings Limited and Polys Holding Limited) holds, in total,
approximately 15.27% of the issued share capital of easyJet plc as
at 31 March 2022.
Under the Amended Brand Licence signed in October 2010 and
approved by the shareholders of easyJet plc in December 2010, an
annual royalty of 0.25% of total revenue is payable by easyJet to
easyGroup. The full term of the agreement is 50 years.
easyJet and easyGroup have established a fund to meet the annual
costs of protecting the 'easy' (and related marks) and the
'easyJet' brands. easyJet contributes up to GBP1 million per annum
to this fund and easyGroup contributes GBP100,000 per annum. If
easyJet contributes more than GBP1 million per annum, easyGroup
will match its contribution in the ratio of 1:10 up to a limit of
GBP5 million contributed by easyJet and GBP500,000 contributed by
easyGroup.
Three side letters have been entered into: (i) a letter dated 29
September 2016 in which easyGroup consented to easyJet acquiring a
portion of the equity share capital in Founders Factory Limited;
(ii) a letter dated 26 June 2017 in which easyJet's permitted usage
of the brand was slightly extended; and (iii) a letter dated 02
February 2018 in which easyGroup agreed that certain affiliates of
easyJet have the right to use the brand.
The amounts included in the income statement, within other
costs, for these items were as follows:
Six months Six months
ended ended
31 March 31 March
2022 2021
GBP million GBP million
------------ ------------
Royalty 3.6 0.1
Brand protection (legal fees paid through easyGroup
to third parties) - 0.1
3.6 0.2
----------------------------------------------------
As at 31 March 2022, GBP1.9 million net payable (H1 2021: GBP4.6
million net receivable) of related party balances were held in
trade and other receivables and payables.
15. Events after the balance sheet date
On 7 April 2022, $100 million of the UK Export Finance backed
facility was repaid. This relates to the Commercial Paper (UK
Export Finance) disclosed in note 8.
Glossary: Alternative Performance Measures
Non-headline items
Non-headline items are those where, in management's opinion,
their separate reporting provides an additional understanding to
users of the financial statements of easyJet's underlying trading
performance, and which are significant by virtue of their size
and/or nature (see Note 3).
Headline loss before Tax
A measure of underlying performance which is not impacted by
non-headline items.
Six months Six months
ended ended
31 March 31 March 2021
2022
GBP million GBP million
Statutory loss before tax (557) (645)
Total non-headline charge/ (credit) (see
note 3) 12 (56)
Headline loss before tax (545) (701)
EBITDAR
Earnings before interest, taxes, depreciation, amortisation and
aircraft rental.
Headline EBITDAR
Earnings before non-headline items, interest, taxes,
depreciation, amortisation and aircraft rental.
Six months Six months
ended ended
31 March 31 March 2021
2022
GBP million GBP million
Statutory operating loss (499) (601)
Add back;
Aircraft dry leasing 1 2
Depreciation 265 204
Amortisation 12 11
EBITDAR (221) (384)
Non-headline charge/(credit) within operating
profit (see note 3) 13 (85)
Headline EBITDAR (208) (469)
Net debt
Total cash less borrowings and lease liabilities. (Cash includes
money market deposits but excludes restricted cash).
31 March 31 March
2022 2021
GBP million GBP million
Borrowings 3,046 3,323
Lease liabilities 1,055 1,027
Cash and money market deposits (excluding
restricted cash) (3,505) (2,335)
Net Debt 596 2,015
Return on Capital employed (ROCE )
Operating profit, less tax at the prevailing UK corporation tax
rate at the end of the financial year, divided by average capital
employed (shareholder equity less net cash/debt).
Headline return on capital employed (ROCE )
Operating profit less non-headline items, less tax at the
prevailing UK corporation tax rate at the end of the financial
year, divided by average capital employed (shareholder equity less
net cash/debt).
31 March 31 March
2022 2021
GBP million GBP million
Opening shareholder's equity 2,639 1,899
Closing shareholder equity 2,440 1,582
Average shareholder equity 2,540 1,741
Opening net Debt 910 1,125
Closing net det 596 2,015
Average net debt 753 1,570
Average capital employed 3,293 3,311
Reported operating loss (499) (601)
Tax rate 19% 19%
Normalised operating loss after tax (404) (487)
Return on capital employed (12.3%) (14.7%)
Reported operating loss (499) (601)
Non-headline charge/(credit) within operating
loss (see note 3) 13 (85)
Headline reported operating loss (486) (686)
Tax rate 19% 19%
Normalised headline operating loss after
tax (394) (556)
Headline return on capital employed (12.0%) (16.8%)
Basic headline loss per share - pence
Total headline loss for the year divided by the weighted average
number of shares in issue during the year after adjusting for
shares held in employee benefit trusts.
Diluted headline loss per share - pence
Diluted headline loss per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all
dilutive potential shares.
Six months Six months
ended ended
31 March 31 March 2021
2022
GBP million GBP million
Statutory loss after tax (431) (549)
Total non-headline charge/ (credit) (see
note 3) 12 (56)
Tax impact on non-headline items (3) 30
Headline loss (422) (575)
million million
restated
(see note
5)
Weighted average number of ordinary shares
used to calculate basic loss per share 754 538
Weighted average number of ordinary shares
used to calculate diluted loss per share 754 538
Headline loss per share pence pence
restated
Basic (56.0) (106.9)
Diluted (56.0) (106.9)
Constant currency measures
These performance measures are calculated by translating the H1
2022 financial period performance at the H1 2021 financial period
effective exchange rate, excluding foreign exchange gains and
losses in the statement of financial position. The purpose of this
APM to give insight on performance by comparing metrics on a
constant currency basis thereby excluding the impact of exchange
rate movements.
Statement of Directors' responsibilities
The Directors are responsible for preparing the interim report
in accordance with applicable law and regulations. The Directors
confirm that the condensed consolidated interim financial
information has been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim management report includes a fair review of the
information required by the Disclosure and Transparency Rules
paragraphs 4.2.7 R and 4.2.8 R, namely:
-- an indication of important events that have occurred during
the six months ended 31 March 2022 and their impact on the
condensed set of financial information, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
-- material related-party transactions during the six months
ended 31 March 2022 and any material changes in the related-party
transactions described in the Annual report and Accounts 2021.
The Directors of easyJet plc are listed in the Annual report and
Accounts 2021. A list of current Directors is maintained on the
easyJet plc website: http://corporate.easyJet.com and includes
Stephen Hester who became Chair on 1 December 2021.
The Directors are responsible for the maintenance and integrity
of, amongst other things, the financial and corporate governance
information as provided on the easyJet website
(http://corporate.easyJet.com). Legislation in the United Kingdom
governing the preparation and dissemination of financial
information may differ from legislation in other jurisdictions.
The interim report was approved by the Board of Directors and
authorised for issue on 18 May 2022 and signed on its behalf
by:
Johan Lundgren Alistair Kenton
Jarvis
Chief Executive Chief Financial
Officer
Independent review report to easyJet plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed easyJet plc's condensed consolidated interim
financial statements (the "interim financial statements") in the
interim report of easyJet plc for the 6 month period ended 31 March
2022 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
-- the condensed consolidated statement of financial position as at 31 March 2022;
-- the condensed consolidated income statement and condensed
consolidated statement of comprehensive income for the period then
ended;
-- the condensed consolidated statement of cash flows for the period then ended;
-- the condensed consolidated statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the interim report
of easyJet plc have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the interim
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The interim report, including the interim financial statements,
is the responsibility of, and has been approved by the directors.
The directors are responsible for preparing the interim report in
accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express a conclusion on the interim
financial statements in the interim report based on our review.
This report, including the conclusion, has been prepared for and
only for the company for the purpose of complying with the
Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We
do not, in giving this conclusion, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
Watford
19 May 2022
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR GZGMKZRRGZZZ
(END) Dow Jones Newswires
May 19, 2022 02:01 ET (06:01 GMT)
Grafico Azioni Easyjet (LSE:EZJ)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Easyjet (LSE:EZJ)
Storico
Da Apr 2023 a Apr 2024
